O'Donghue & Anor v Mussett & Anor

[2008] VSC 63

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 15 of 2006

ANNE O’DONOGHUE AND MICHAEL STEETH	Plaintiffs
v
NITA MUSSETT AND FRANCIS JOHN FIELD	Defendants

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JUDGE:	PAGONE J
WHERE HELD:	Melbourne
DATE OF RULING:	21 February 2008
CASE MAY BE CITED AS:	O’Donoghue and anor v Mussett and anor
MEDIUM NEUTRAL CITATION:	[2008] VSC 63

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PROBATE – Application for grant of probate abandoned on Day 3 of trial – Costs

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Dr I J Hardingham QC with Ms K R Rees	Gavan J Black
For the Defendant	Mr S Newton	Mahonys

HIS HONOUR:

1. I have considered the matters that have been put to me on the question of costs, and I will rule on that and dispose of the proceedings today.  Before doing so, may I begin by commending the plaintiffs for their decision to discontinue the proceeding.  Probate disputes are difficult and they can sometimes be wrenching.  This case is no exception to that.

1. The materials that I have before me do not permit me to conclude at this stage about any impropriety on the part of the plaintiffs, and I do not do so.  I am conscious of the reasons for the decision that has prompted them to withdraw, and those reasons are sound and sensible.

1. May I also, by way of second preliminary comment, commend counsel for their assistance, and for the way they have conducted the proceedings before me.  I should begin by thanking Dr Hardingham and his Junior for the way the case was commenced especially in the circumstances in which it came before me.  The opening greatly assisted in enabling me to get on top of the issues very quickly, in a very clear and helpful presentation of the materials, and I thank them for that.  

1. I wish also to thank Mr Newton's cross‑examination, which has been, if I may say so, a model that many others could follow.  It has been polite, clear and effective in exposing the issues in a very clear and helpful way.

1. So far as the proceeding is concerned, in view of the plaintiffs' indication that they wish to withdraw, I will make an order that the proceeding be dismissed.

1. So far as concerns the order for costs, I must say I find the question intrinsically difficult.   Ordinary rules are helpful, they provide us with a fallback position when things are difficult.  But this is not a case where the ordinary rule is an easy one to adopt.  

1. In the case of the ordinary rule, it enables one to say, well, if a party has taken risks, they should bear the burden of the risks if the risks turn out not to be well taken.  Probate cases, however, are often different.  Here I do not have the final evaluation of all of the evidence.  I have only heard a part of the case, I have only heard a part of the cross‑examination.  

1. The reasons for the plaintiffs wishing to withdraw in the context of the evidence as it has developed so far is, as I have said, sensible.  I do not think that I could conclude, as was urged on me by Mr Newton, that the plaintiffs have decided that they must lose.  I think it is proper for me to conclude that his cross‑examination made clear to them some risks that the plaintiffs were going to be exposed to and, if I may say so, properly exposed to.  It is sensible that they might take the view that in those circumstances the risks were too great for them, even if their position ultimately be that they were doing no more than propounding the will that they genuinely believed to be their aunt's final wishes.

1. Dr Hardingham referred me to paragraph 8 of an affidavit made by Mr Mayberry in which Mr Mayberry sets out his understanding of the case for the plaintiffs at 8 November 2006.  Dr Hardingham says that if I look at paragraph 8 I will see that the case is not articulated as precisely as it has since come out in these proceedings.  That in a sense is true.  Paragraph 8, however, does describe the defendants’ case against the plaintiffs as being in part that they had “procured” the execution of a will at a time when the aunt was suffering.  What has become clear in these proceedings is that the conduct and way in which they had procured the execution of the Will is of the essence of the proceeding, and I think that is a fair inference that could have been drawn much earlier than this morning.

1. It is hard to know what I might have decided if the case had gone to conclusion and, if, on the one hand, the plaintiffs had succeeded or, on the other hand, the plaintiffs had failed.  I do think, however, that the plaintiffs should have formed the view much earlier than today about the risks that they were facing in maintaining and propounding the will.  I am told that the costs of the plaintiffs’ to date are about $250,000, and I must say that I am not surprised to hear that.  

1. From where I sit today, I think all I can safely say is the following:  the plaintiffs have come here saying that they have a will, and they say that they are seeking to implement the wishes of their late aunt.  They have withdrawn for what strikes me as being sound reasons although, as I have said, I think these sound reasons should have been appreciated earlier.  The withdrawal now will doubtlessly save the defendants costs, even if they perhaps had been successful at the end of the day.  Party/party costs rarely compensate a party for all of the costs that they incur.

1. Mr Newton refers me to Daulizio's case[1], in which he points to a passage dating back quite some time, 90 years ago, where the High Court had indicated that where a party, having created a suspicion in relation to a will, even ultimately succeeding may have to bear the burden of paying costs because the suspicion is one that ought to have been investigated.  If the plaintiffs had ultimately succeeded upon all of the evidence at the end of the proceeding, it may be that they would have nonetheless have had costs awarded against them for the kinds of reasons that Mr Newton was urging upon me.  But that of course would have occurred upon the final hearing of all of the evidence.  Here the evidence has been stopped along the way, and the situation is more difficult.

   [1]Trust Company of Australia Ltd v Daulizio (No 2) [2003] VSC 381 (Unreported, Mandie J, 10 October 2003) [6].

1. There is a helpful passage in an unreported judgment of Smith J in Phillips v Dundas,[2] decided in 1994, in which his Honour had to consider a situation of a party who had abandoned an application.  There his Honour adopted a test consistent with the authorities of whether that party had acted reasonably in deciding whether the conduct was conduct that should or should not benefit or be burdened, as the case may be, by orders about costs. 

   [2]Phillips v Dundas SCVic 34/94 (Unreported, Smith J, 4 December 1995)

1. In my judgment, from where I stand at the moment, in the unsettled and uncertain state of all of the evidence, and the good sense of the decision of the plaintiffs to which I have already referred, I think the parties have acted reasonably in propounding the will, at least from what I can see, but I do not think that they can be said to have been acting reasonably in the sense of not having thought through the consequences of what was going to be put to them faced with the kinds of allegations that were always pregnant and articulated in the proceedings.  It may be true, as Dr Hardingham pointed out, that there are no allegations of fraud, but the allegations that have been made do not need to be allegations of fraud for a solicitor and, perhaps to a lesser extent, an accountant, to be faced with the stark choice of risk to their professional careers from litigation that may expose them to the kinds of risks that they have now appreciated they have assumed.

1. In those circumstances, what I am minded to do is to make an order that they be awarded a part of their costs, but to limit that part to $30,000.  

1. The orders I pronounce are –

(1)the proceeding is dismissed; and

(2)the plaintiffs be paid a sum of $30,000 out of the estate.

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