Public Trustee of Queensland v. McKenzie

[2008] QSC 15

SUPREME COURT OF QUEENSLAND

CITATION:

Public Trustee of Queensland v McKenzie [2008] QSC 15

PARTIES:

PUBLIC TRUSTEE OF QUEENSLAND
(applicant)

v

JOYCE MCKENZIE
(respondent)

FILE NO/S:

BS 2675 of 2007

DIVISION:

Trial

PROCEEDING:

Application

DELIVERED EX TEMPORE ON:

25 January 2008

DELIVERED AT:

Supreme Court, Brisbane

HEARING DATE:

25 January 2008

JUDGE:

Wilson J

ORDER:

1. That the orders of Justice Douglas of 24 May 2007 be set aside.

2. That the originating application be dismissed.

3. That the respondent pay the applicant’s costs of and incidental to this proceeding commenced by originating application to be assessed on the standard basis up to 28 June 2007 and there be no order as to costs thereafter.

4. That the assessment of the costs of the proceeding be undertaken by Ryan Cost Consultant Pty Ltd of Level 17 241 Adelaide St Brisbane 4000.

CATCHWORDS:

PROCEDURE – COSTS – DEPARTING FROM THE GENERAL RULE – OTHER CASES – OTHER CASES – the applicant applied to administer the estate of the respondent’s deceased brother – the testator had an intellectual disability and had lived in isolated circumstances – the respondent lodged a caveat – the applicant contested the respondent’s standing to file a caveat – the respondent offered to withdraw the caveat, relinquish any claim on the estate and consent to the will being proved in solemn form, on the basis that both parties bear their own costs – the applicant did not respond to that offer – what costs orders are appropriate

COUNSEL:

A P Collins for the applicant
H W Patterson (sol) for the respondent

SOLICITORS:

The Official Solicitor to the Public Trustee for the applicant
Dean Kath Kohler, Solicitors for the respondent

1. :Wilson J  Page Vincent Edser died on 3 August 2005 aged 71.  He never married.  He was survived by his two sisters, the respondent and Mrs Betty Cox.  The deceased had an intellectual disability from about the age of 18 months.  He lived all his life on the family farm until 2002 when he was involved in a car accident and hospitalised.

1. This proceeding relates to a Will made by the deceased on 15 July 1992.  By that Will he appointed Perpetual Trustees as the executor and left his estate to the Assembly of God Church at Crows Nest.  Perpetual Trustees renounced the executorship.  The main asset of the estate is the farm valued in April 2007 at $300,000.00.

1. On 4 October 2005 the Public Trustee applied to administer the estate.  On 5 October the respondent filed a caveat.  On 11 October 2005 the respondent filed a notice in support of the caveat stating that her interest in the estate was as the deceased’s sister and the next of kin and that she claimed an interest because –

(a)the deceased lacked testamentary capacity on 15 July 1992;

(b)the last Will and Testament was, therefore, void; and

(c)there being no prior Will the deceased died intestate and she had an interest in the estate as next of kin.

1. In fact, there were earlier Wills, the most recent of which had been executed on 30 January 1981.  The respondent was not named as a beneficiary under that Will.

1. On 27 March 2007 the Public Trustee filed an originating application seeking an order that the caveat be set aside.  Justice Moynihan gave directions on 18 April 2007 and on 24 May 2007 Justice Douglas ordered that the Public Trustee prove the Will in solemn form.  The Public Trustee filed an application to set aside the orders of Justice Douglas on 18 December 2007.  That application has come before the Court today.  In the meantime, the caveat was withdrawn on 8 January 2008.

1. Today the respondent consented to an order setting aside the orders of Justice Douglas and dismissing the originating application.  The remaining contentious issue is that of the costs of and incidental to the proceeding which was commenced by originating application.  The applicant Public Trustee seeks its costs of that application on the indemnity basis.  The respondent’s contention is that there should be no order as to costs until 28 June 2007 and that thereafter there should be an order for costs in her favour.

1. In correspondence, as early as 5 June 2006, the Public Trustee identified the earlier Wills and took the point that the respondent had no standing to contest the Will of 15 July 1992 because she was not a beneficiary under the 1981 Will.  At the same time he provided a copy of a statement made by one of the attesting witnesses to the 15 July 1992 Will.

1. The respondent sought time to investigate the facts and there was considerable correspondence in which more time was sought until the originating application was filed, as I say, on 27 March 2007.  On 13 April 2007 the Public Trustee provided the respondent with an affidavit by the other attesting witness.

1. On 17 April 2007 the respondent amended her caveat to claim that all of the previous Wills were affected by the deceased's lack of testamentary capacity.  Some material was supplied by the Public Trustee on 3 May 2007.  The respondent contacted the beneficiary under the 1992 Will, the Assembly of God Church, trying to negotiate some settlement.  That did not come to anything and the next event of any significance was the consent order made by Justice Douglas on 24 May 2007.

1. On 28 June 2007 solicitors acting for the respondent offered to compromise the proceeding on the following grounds:

(1)the respondent would consent to the Will being proved in solemn form;

(2)the respondent would relinquish any claim she had or may have had on the estate;

(3)the respondent would withdraw her caveats;

(4)both parties should bear their own costs; and

(5)the estate should reimburse the respondent for rates and insurance paid by her on the property since the deceased’s death.

1. The Public Trustee did not respond in any meaningful way to that offer.  There was further correspondence from him wanting to know the attitude of Mrs Cox because she had previously filed an affidavit in support of the respondent and her attitude in relation to certain contested chattels.  In some of the earlier correspondence it seemed that the Public Trustee was making his own inquiries about Mrs Cox’s attitude but later he seemed to be expecting the respondent's solicitors to provide the necessary information.

1. The respondent’s solicitors wrote to the Public Trustee calling for a response to that offer on 20 July, 31 July, 4 September, 18 October and 30 October 2007.  Then the Public Trustee filed the application in December 2007 and on 8 January 2008 the respondent withdrew the caveat and made a further offer, namely, to consent to an order that the order of Justice Douglas be set aside; that the Public Trustee be appointed executor of the estate and administer the estate; that the application otherwise be dismissed; and that there be no order as to costs.

1. Costs normally follow the event of litigation and normally on the standard basis.  An order for costs on the indemnity basis is exceptional.  Counsel for the Public Trustee submitted that this was an exceptional case because there was never any basis for the caveat.  Further, the respondent persisted with the caveat despite being given every reasonable opportunity to withdraw it and she did so to the potential detriment of the estate and the rightful beneficiary of it.

1. I accept that she was given reasonable opportunities to withdraw the caveat but I think the picture is coloured by the intellectual disability of the deceased and the isolated lifestyle he engaged in.  Further, I think the Public Trustee has not adequately explained his non-response to the offer made in June 2007.  In all the circumstances, I have concluded that the respondent ought to pay the Public Trustee’s costs of and incidental to the proceeding to be assessed on the standard basis up to 28 June 2007 and that there should be no order as to costs thereafter.

1. In proceeding BS2675 of 2007 the orders will be that:

(1)the orders of Justice Douglas of 24 May 2007 be set aside;

(2)the originating application be dismissed;

(3)the respondent pay the applicant's costs of and incidental to this proceeding commenced by originating application to be assessed on the standard basis up to 28 June 2007 and there be no order as to costs thereafter;

(4)the assessment of the costs of the proceeding be undertaken by Ryan Cost Consultant, et cetera.