Perpetual Trustees WA Ltd v Rinshed

[2010] WASC 115

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

CITATION:   PERPETUAL TRUSTEES WA LTD -v- RINSHED [2010] WASC 115

CORAM:   McKECHNIE J

HEARD:   ON THE PAPERS

DELIVERED          :   28 MAY 2010

FILE NO/S:   CIV 1130 of 2009

MATTER                :Will of WILLEM DE GRUYTER late of 26 Learoyd Street, Mount Lawley, Western Australia, Retired Mechanical Engineer (Dec)

BETWEEN:   PERPETUAL TRUSTEES WA LTD

Plaintiff

AND

MARIE JOSE THERESIA RINSHED
First Defendant

MONIQUE VAN MAANENBERG
Second Defendant

ALBERTHA ANNA CHRISTINA VAN MAANENBERG
Third Defendant

Catchwords:

Costs - Unsuccessful defence of probate action - Rule in Twist v Tye - Whether defending action was reasonable

Legislation:

Nil

Result:

First defendant to pay plaintiff's costs on an indemnity basis and second and third defendants' costs on a party and party basis

Category:    B

Representation:

Counsel:

Plaintiff:     No appearance

First Defendant             :     No appearance

Second Defendant         :     No appearance

Third Defendant           :     No appearance

Solicitors:

Plaintiff:     Jackson McDonald

First Defendant             :     Hotchkin Hanly

Second Defendant         :     Elliott & Co

Third Defendant           :     Elliott & Co

Case(s) referred to in judgment(s):

Tarabini v Silvester (Unreported, WASCA, Library No 960684, 6 December 1996)

Twist v Tye [1902] P92

McKECHNIE J: 

A little issue, a lot of heat

1. This case has generated more heat and paper over the question of costs than the original dispute and all perspective seems to have been lost. 

2. The plaintiff, as executor had to commence action for a declaration as to the proper Will of William de Gruyter because the first defendant, Ms Rinshed had lodged a caveat.  She also counterclaimed seeking to have the Will set aside on the grounds of Mr de Gruyter's diminished mental capacity and the undue influence of the second and third defendants, the Mesdames Van Maanenbergs.  Much ink has been spilled as to Ms Rinshed's precise relationship to Mr de Gruyter, whether daughter or step‑daughter, a distinction that matters not at all to the issue of costs.  Within a short time the defence and counterclaim were abandoned and the matter proceeded to an undefended hearing.

3. All that remained for consideration was the question of costs because the Van Maanenbergs understandably did not want their inheritance diminished if possible.

4. This small area of dispute has generated three affidavits on behalf of Ms Rinshed and seven affidavits on behalf of the Van Maanenbergs.

5. The Van Maanenbergs' solicitor filed 23 pages of submissions.

6. Ms Rinshed's lawyer did not adhere to programming orders and only after judicial prompting were submissions filed on 21 May 2010, those running to 11 pages but with copies of other material as well.  He also forwarded, unfiled, his affidavit.  This is well out of time and irregular.  However, I have read and considered it.  The matters deposed to make no difference to the outcome. 

7. Despite the plethora of paper, the simple issue is whether Ms Rinshed had a reasonable basis to lodge the caveat and defend the action.  She did not and must pay the costs of the other parties.

Background to the Will

1. After making a number of Wills over his lifetime, Mr de Gruyter executed his last Will dated 25 September 2007 leaving all his property to the Van Maanenbergs. 

2. A solicitor, Mr Miller, prepared the Will and was one of its witnesses together with his son whom he took to visit Mr de Gruyter for this purpose.  Mr Miller's unchallenged affidavit evidence is that Mr de Gruyter was quite lucid and able to give instructions as to the content of his Will.  The Will was duly executed.  Mr de Gruyter appeared to understand the nature of the documents and in particular that he was giving instructions for the disposal of his property on his death, that he understood the extent and character of his property and appreciated the claims or potential claims of any persons for whom he felt he had a responsibility.

3. Mr de Gruyter specifically made no provision for his step‑daughter, Ms Rinshed, for reasons he outlined in the Will at cl 4.  She was wealthy in her own right, has lived in the USA since 1967.  When she came to Australia for her mother's funeral in 2006 Mr de Gruyter asked her if she was interested to take anything home from the house.  The answer was she does not need anything, neither wants anything.  She was only interested in her mother's jewellery to add to her extensive collection.  That would seem to be a clear enough expression of testamentary intention. 

4. Mr de Gruyter developed lung cancer which was the cause of his death at age 90 on 25 August 2008, nearly a year after executing his Will.

The course of the proceedings

1. Perpetual Trustees WA Ltd was appointed as the executor of the Will.  When it lodged the Will for probate, Ms Rinshed filed a caveat.  As a result the executor commenced an action seeking an order that the court pronounce for the force and validity of the 25 September 2007 Will.  Ms Rinshed was named as defendant but in due course the Van Maanenbergs were added as second and third defendants, they being the beneficiaries.  They supported the executor. 

2. The writ was filed on 20 January 2009 and Ms Rinshed's defence and counterclaim was filed on 17 March 2009 alleging in summary that the Will was executed at a time when the deceased lacked testamentary capacity and as a result of undue influence by the Van Maanenbergs.  Particulars were given.  Ms Rinshed also counterclaimed that the court pronounce the force and validity of a Will dated 10 December 1987.

3. There followed an interlocutory skirmish about medical records which, in due course, were made available to Ms Rinshed.  At a status conference on 4 August 2009 Ms Rinshed's defence and counterclaim was ordered to be struck out without prejudice to her right to seek an order for her costs of the action at the hearing.  This order was by consent, or at least without opposition.  The matter was entered for trial on an undefended basis.

4. On 9 December 2009 I made orders giving effect to the Will of 25 September 2007.  I also gave leave to all defendants to file affidavits of costs and submissions to be determined on the papers.  Subsequently the parties, by agreement, varied the timetable for filing affidavits. 

Affidavits filed on behalf of the first defendant

•William Donald Rinshed sworn 25 January 2010.

•Marie Jose Theresia Rinshed, sworn 11 February 2010.

•Thomas Mathew Reid (solicitor) sworn 20 May 2010.

Affidavits filed on behalf of the second and third defendants

•Albertha Anna Christina Van Maanenberg (third defendant) sworn 20 November 2009.

•Agnus Teresa Dybowski (neighbour) sworn 1 April 2010.

•Melodie Jane Alderson Tyrer (neighbour) sworn 1 April 2010.

•Monique Van Maanenberg (second defendant) sworn 7 April 2010.

•Albertha Anna Christina Van Maanenberg (supplementary affidavit) sworn 8 April 2010.

•Arnoldus Cornelis Giltay (deceased's gardener) sworn 8 April 2010.

•Toni De Roos (sister and daughter of second and third defendants) sworn 8 April 2010.

•Meredith Jeanne Elliott (solicitor) sworn 10 April 2010.

1. This extensive evidence on what is notionally an issue of costs gives a fair indication that things have gone seriously awry.

2. Ms Rinshed seems to want to fight the battle she conceded and the Van Maanenbergs, while submitting that most of Ms Rinshed's evidence is irrelevant, seem only too ready to join battle anyway.

3. Ms Rinshed's affidavit sets out in uncomfortable detail the dysfunctional relationship between she and her father and her active dislike of the Van Maanenbergs, including allegations about them.  The allegations are supported by her son William and are said to give reasonable grounds for her 'suspicions being aroused as to the circumstances in which my father's subsequent Wills were executed' (par 60). 

4. William Rinshed's affidavit goes further in allegations about the relationship between the Van Maanenbergs and Mr de Gruyter and conversations he is said to have had with Mr de Gruyter and with others.

5. The Rinsheds' assertions are flatly denied or contradicted by the Van Maanenbergs and other deponents, including some people who seem to be entirely independent.  If it was necessary to decide the issue, I would place weight on those people independent of any of the parties, particularly the deceased's next door neighbours and his gardener, together with the evidence of the solicitor who drew and then witnessed the Will.  However, the rights and wrongs, claims and counterclaims in the relationship between father and daughter are largely irrelevant to the question of costs.  To the extent that there is any relevance in the matters raised by Ms Rinshed or her son it is solely directed to the reasonableness of her actions in lodging a caveat and then defending the consequent action by the executor to the extent of having the Van Maanenbergs join the action and as a result incur costs.

There is no evidence that Ms Rinshed acted reasonably

1. The evidence does not enable a conclusion to be drawn that Ms Rinshed had reasonable grounds for challenging the Will.  What is clear from Ms Rinshed's affidavit is that she and her father had a hostile relationship at latest from the time she was 18.  She has explained why.  In 2006 there was a further expression of those hostile feelings.  Her father did not permit her to stay in the house because she had had an argument with him.  There was an unpleasant exchange of emails in May 2008.

   Father to daughter:

   Dear Jose

   When your Mother died on 4th December 2006 there was a Will of joint tenancy between Willem and Maria de Gruyter, whereby all of the Estate became property of Willem de Gruyter.  Your name was never mentioned.  Consequently IT IS ONLY UP TO ME how to run this place and to whom to bequeath it.  Therefore I request you kindly to refrain from ordering my Carer.  You only deal with me and after me it's my Will.

   King regards Wim

   Cc Wim's Carer Beppie

   Daughter to father:

   You must have an enormous guilty conscience.  I never once said or mentioned anything about your will, you aught to get the facts strait.  All I said was I considered australia still my home meaning perth as well.  You destroyd everyone in your life, because of controlling personality.  Mum drank a lot because to block out your mental abuse.  Beppie has already found out what you are, at least I have enough guts to stand up to you.  You are not god, I can talk to anyone I please.  You are the most despicable humanbeing.  Jose

   Father to daughter:

   Dear Jose

   Thank you very much for your interesting letter.  It will take an old man quite some time to understand this sort of language.

   But I will try, thanks again anyhow.

   Grandfather to grandson:

   Dear Billyboy

   Yesterday I received the most disturbing and offensive letter from your mother of which I enclose a copy for your information.

   The last line in her letter is of course completely intolerable and makes our relationship extremely difficult or rather impossible.

   From your Opa who wishes to live his last years in peace.

   You, the beautiful Grandson of my beloved Wife Mary, will always be welcome for a Westcoast Oyster.

   Love Opa

2. Although occurring after the Will had been executed these emails give a stark illustration of the fractured relationship between Ms Rinshed and her father.  She knew it was a fractured relationship and ought to have been well aware that he would be unlikely to leave her anything in the Will.

3. William Rinshed gives no relevant evidence about the deceased's capacity to make a Will in September 2007 or any evidence as to undue influence at that time.  His evidence as to interchanges between he and the Van Maanenbergs occurred in 2008.  He seems to have been the initiator of action to challenge the Will:

   70.On 10 November 2008, I provided a copy of that report to Mr Elliot Nielsen, and requested he undertook enquiries.  Discussing its contents in regards to my grandfathers estate I said words to the effect:

   Me:'Changed his will on two occasions just prior to his death'

   'Departed from the arrangement he had with my grandmother to give the estate to my mother';

   'Instead of referring to my mother as his daughter, and had referred to my mother as his step‑daughter, the first I had ever heard of such reference'

   71.The above circumstances were the grounds for questioning whether there was any undue influence in the execution of my grandfather's Wills.

   72.On advice from Mr Elliot Nielsen I instructed to place a caveat and raise the issue of undue influence in relation to the execution of my grandfather's Wills dated 5 April 2007 and 27 September 2007.

4. Mr Rinshed engaged private investigators to snoop into the antecedents of the Van Maanenbergs.  One of the persons interviewed by the investigator said:

   He did recall the Grandfather asking him about a solicitor for the purpose of changing his Will.  This occurred after the death of the Grandmother.

5. This would have put a reasonable person on notice that a solicitor may have been involved in drawing the Will.  Had proper enquiries been made, Mr Miller would no doubt have supplied the information to which I have referred and this would have allayed any reasonable person's concerns about either the deceased's mental capacity or undue influence.  A copy of the death certificate showing cause of death could have been obtained.

6. A costs application is not the place to bring out long term family grievances and yet the overall impression I am left with after reading Ms Rinshed's and her son's affidavits is that redress for those grievances, rather than a reasoned decision, was the real basis for the caveat and the subsequent defence and counterclaim.  When eventually she discovered what reasonable enquiry would have revealed beforehand, Ms Rinshed accepted the inevitable and allowed the hearing to be undefended.  By that time of course costs had been incurred.

The legal principles

1. The ordinary rule is that costs follow the event.  The plaintiff's actions are as executor and its costs are provided for.  It is entitled to its costs from the estate.  In practical terms the Van Maanenbergs have won the action and Ms Rinshed has lost.  She lost the action when she agreed to abandon her defence and counterclaim.

2. In Tarabini v Silvester (Unreported, WASCA, Library No 960684, 6 December 1996) 5 Malcolm CJ (Kennedy and Pidgeon JJ agreeing) set out the principles as to costs noting the starting point:

   It  is the general  rule in probate  actions, as in  other actions,  that costs follow the event:  Twist v Tye [1902] P92

3. He cited with approval from Twist v Tye [1902] P92 per Gorrell Barnes J at 94:

   Speaking generally, there are in this Division two classes of cases which there should be, and  generally is, a departure from  the ordinary rule: the first is where the litigation has been brought about by the conduct of the testator or testatrix; and the second is where the parties who have failed have reasonably been led into the litigation by a bona fide belief in their case, and have, therefore, felt it desirable to enquire into the testamentary dispositions of the testator or testatrix.

4. The litigation was not caused by the conduct of either the testator or principal beneficiaries.  The circumstances did not afford reasonable grounds for opposing the Will.

Conclusion

1. Ms Rinshed has significant health issues and possible medical costs she may have to incur.  She also details her modest financial position.  None of those matters can or should stand in the way of an order for costs.  Her medical condition and her financial circumstances were known to her before she embarked on a course that would lead to litigation where the risk of a costs order was real.  She chose to run that risk.

2. The estate has been diminished by the costs of the plaintiff solely because of the unreasonable actions of Ms Rinshed in lodging the caveat.  Those costs should be restored.  I order that she pay the plaintiff's costs on an indemnity basis.

3. The Van Maanenbergs, as beneficiaries, necessarily had an interest in the litigation that they were entitled to protect and should have their costs paid by Ms Rinshed on a party and party basis.