Prichard v Prichard
[2015] WASC 170 (S)
•15 OCTOBER 2015
PRICHARD -v- PRICHARD [2015] WASC 170 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2015] WASC 170 (S) | |
| Case No: | CIV:2843/2012 | 15 MAY 2015 | |
| Coram: | JENKINS J | 15/10/15 | |
| 6 | Judgment Part: | 1 of 1 | |
| Result: | The costs of the first defendant are to be paid from the estate on an indemnity basis | ||
| B | |||
| PDF Version |
| Parties: | GABRIELLE MARY PRICHARD IAN SIMON PRICHARD as Executor of the Estate of KENNETH PRICHARD IAN SIMON PRICHARD PAUL JOHN PRICHARD MICHAEL KENNETH PRICHARD LOUISE ANNE PRICHARD |
Catchwords: | Costs Whether the executor's costs should be paid from the estate Turns on own facts |
Legislation: | Rules of the Supreme Court 1971 (WA), O 24A, O 66, O73 r 1 Supreme Court Act 1935 (WA), s 71 |
Case References: | Prichard v Prichard [2015] WASC 170 Re Green (decd); Lloyd v Green [1969] WAR 67 Re Herbert Brothers (Dec'd) (1990) 101 FLR 279 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
IAN SIMON PRICHARD as Executor of the Estate of KENNETH PRICHARD
First Defendant
IAN SIMON PRICHARD
Second Defendant
PAUL JOHN PRICHARD
Third Defendant
MICHAEL KENNETH PRICHARD
Fourth Defendant
LOUISE ANNE PRICHARD
Fifth Defendant
Catchwords:
Costs - Whether the executor's costs should be paid from the estate - Turns on own facts
Legislation:
Rules of the Supreme Court 1971 (WA), O 24A, O 66, O73 r 1
Supreme Court Act 1935 (WA), s 71
Result:
The costs of the first defendant are to be paid from the estate on an indemnity basis
Category: B
Representation:
Counsel:
Plaintiff : In person
First Defendant : Mr M W Fatharly
Second Defendant : In person
Third Defendant : In person
Fourth Defendant : No appearance
Fifth Defendant : No appearance
Solicitors:
Plaintiff : In person
First Defendant : Kott Gunning Lawyers
Second Defendant : In person
Third Defendant : In person
Fourth Defendant : No appearance
Fifth Defendant : No appearance
Case(s) referred to in judgment(s):
Prichard v Prichard [2015] WASC 170
Re Green (decd); Lloyd v Green [1969] WAR 67
Re Herbert Brothers (Dec'd) (1990) 101 FLR 279
1 JENKINS J: On 15 May 2015, I delivered my decision in this matter: Prichard v Prichard [2015] WASC 170. The executor, the first defendant, was the only party who sought costs. He sought an order that he be indemnified for his costs from the estate. Only Ian, the second defendant, opposed that order. He sought an order that the executor's costs be paid by Gabrielle, the plaintiff. After hearing oral submissions, I reserved the question of the costs of the executor into chambers and gave the executor time to provide evidence of an offer or offers made to the plaintiff to settle the matter.
Legal principles
2 The Rules of the Supreme Court 1971 (WA) (the Rules) O 66 r 1 applies to this matter. Order 66 r 1(1) provides that costs are in the discretion of the court but, without limiting that general discretion, and subject to O 66, the court will generally order that the successful party to any action or matter recover his costs. In civil matters, the usual exercise of that discretion results in an order that an unsuccessful party pay the other party's costs.
3 In probate matters, there are well-recognised exceptions to the general rule that costs follow the event. Strictly speaking, this was not a probate action as defined by the Rules O 73 r 1. However, it was an application brought pursuant to the Administration Act 1903 (WA) s 45 which asked the court to make orders with reference to questions arising in respect of the deceased's will. Given the similarities between this matter and a probate action, I am of the view that the question of costs should be determined by application of the principles which apply to a probate action.
4 There are two types of probate cases where the general rule may be departed from. They are:
(1) where the litigation has been brought about through the conduct of the testator; and
(2) where the parties have reasonably been led into litigation by a bona fide belief in their case and have, therefore, felt it desirable to enquire into the testamentary disposition of the testator: Re Green (decd); Lloyd v Green [1969] WAR 67 [83].
5 In Re Herbert Brothers (Dec'd) (1990) 101 FLR 279 Kearney J said:
See also the seminal discussion in principle by Sir James Wilde (as he then was) in Mitchell v Gard (1863) 3 Sw & Tr 275; 164 ER 1280. His Lordship there said (at 277; 1281) that: 'The basis of all rules on this subject should rest upon the degree of blame to be imputed to the respective parties'. However, he then explained that the function of the Probate Court was such that despite a lack of fault in the testator or beneficiaries, the Court may relieve 'the losing party from costs, if chargeable with no other blame than that of having failed in a suit which was justified by good and sufficient grounds of doubt'.
In Brown v McEncroe (1890) 11 LR (NSW) Eq 134, Owen J succinctly stated the principles applicable as follows (at 145):
The principles governing the adjudication as to costs in [probate] suits appear to be that, where the litigation is caused by the conduct of the testator, the estate must bear all the costs of both parties. Where neither the testator nor the persons interested in the residue are to blame, and the defendant has reasonable ground for impeaching the will, no order will be made as to costs, but where there is no reasonable ground for impeaching the will the defendant will be ordered to pay the costs.
See to similar effect Public Trustee v Hall [1937] SASR 252 at 253-5, per Angas Parsons J.
6 This is not a case where there was any question as to the validity of the will. The originating summons by which this matter was initiated raised legitimate questions concerning the construction of the will. Thus, the above principles have to be modified to take into account the different issues which arose in this case.
Application of the legal principles
7 The plaintiff was substantially unsuccessful in obtaining the answers she propounded for in two of the questions posed in the originating summons. However, I found that the meaning of cl 3 of the will was ambiguous and unclear. In this sense, the deceased, by instructing the drafting of the will in those terms, and by then creating the amended copy schedule, caused the litigation to occur. It was entirely reasonable for Gabrielle to seek to have the court's direction as to the issues arising in respect of cl 3 and the schedule to the will.
8 This was particularly so as the amended copy schedule was not identified as being of any significance until quite some time after the deceased's death and its status was unclear. Further, its construction was not clear either.
9 It is also correct that, through no fault of Gabrielle, Ian by his unsuccessful submissions and application to call evidence from an expert increased the executor's costs.
10 In all the facts of this case, Gabrielle ought not to be required to pay the executor's costs. Therefore, consistently with the Rules O 66 r 9(2), the executor is entitled to his costs of the proceedings out of the estate on an indemnity basis.
11 Ian says that there is a further matter which means that Gabrielle ought to be ordered to pay the first defendant's costs. He submits that Gabrielle was made an offer to settle this matter, which was in terms more favourable to her than the outcome of these proceedings. That offer was made during mediation.
12 The Supreme Court Act 1935 (WA) s 71 provides that evidence of anything said or done or any communication, whether oral or in writing, in the course of or for the purpose of an attempt to settle a proceeding by mediation under the direction of the court is to be taken in confidence and is not admissible in any proceeding before any court. There are exceptions to that general rule. The only exception which could possibly apply in this case is contained in s 71(3)(c) which provides that the general rule does not affect the admissibility of any evidence or document in proceedings if:
The proceedings relate to a costs application and, under the rules of court, the evidence or document is admissible for the purposes of determining any question of costs.
13 I gave the executor time to produce evidence relating to any offer which would be admissible because it was made under the Rules O 24A or made outside of mediation.
14 The executor forwarded documents to me which may include details of an offer made during mediation. I have not taken into account any offer made during the mediation because such an offer made during the mediation is confidential and inadmissible.
15 I was also provided with evidence that on 24 May 2013, after mediation, by letter which was said to be 'without prejudice save as to costs', Gabrielle offered to settle the application on the basis of an offer made to her during mediation on the following conditions:
(1) that her entitlement under the estate be paid to her on 4 June 2013; and
(2) the minute of consent orders for dismissal of the application and a related application be provided to the executor in exchange for a bank cheque in the sum of $350,000 made payable to her.
16 The sum of $350,000 was to be paid from the estate to settle Gabrielle's claims on it.
17 The defendants regarded the letter of 24 May 2013 to contain a counter offer and it was rejected.
18 After considering the admissible evidence regarding the offer, Ian's submissions do not persuade me that I ought to resile from the opinion expressed above, that the executor's costs ought to be paid out of the estate on an indemnity basis. This is because there is no admissible evidence that the defendants made an offer to settle which was unreasonably rejected by Gabrielle. Gabrielle's offer was rejected by the defendants.
19 Finally, Ian has asked me to defer making a decision about the costs of the originating summons until CIV 1218 of 2013, another action between the deceased's children, is resolved. He submits that it is difficult to judge how any offer made to the plaintiff during mediation compares with what the plaintiff will receive from the deceased's estate until that action is resolved.
20 In my view, the question of the executor's costs in this application should be resolved now. There is no admissible evidence before me of an offer made to the plaintiff to settle this application and that position will not change. Any offer made to the plaintiff during mediation was not repeated out of mediation or made as an O 24A offer. I have taken into account Gabrielle's offer of 24 May 2013, which was rejected by the defendants. I see no advantage in delaying further the finalisation of costs of the originating summons.
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