Re Gyss
[2022] VSC 689
•10 November 2022
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST
S ECI 2022 01280
| IN THE MATTER of the estate of MARLENE HELEN GYSS, deceased | |
| BETWEEN: | |
| ALAN TREVOR GYSS | Plaintiff |
| and | |
| DARREN CHARLES GYSS | Defendant |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF JUDGMENT: | 10 November 2022 |
CASE MAY BE CITED AS: | Re Gyss |
MEDIUM NEUTRAL CITATION: | [2022] VSC 689 |
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COSTS – Passing over application – Application dismissed – Where plaintiff seeks costs of application out of estate of deceased – Where defendant seeks costs against plaintiff – Whether plaintiff should bear costs of unsuccessful application – No point of principle.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Rickards Legal | |
| For the Defendant | Maurice Blackburn Lawyers |
HER HONOUR:
Introduction
Marlene Helen Gyss (‘the deceased’) died on 14 February 2021, aged 82 years. The deceased was survived by her three children: Alan Trevor Gyss (‘the plaintiff’), Darren Charles Gyss (‘the defendant’) and Lynda Maree Laemmle (‘Lynda’).
The deceased’s estate is valued at approximately $1,350,000, comprising an unredeemed nursing home bond of approximately $600,000 and a term deposit of approximately $750,000.
The deceased executed two wills: her last will dated 12 November 2018 (‘the 2018 will’) and her penultimate will dated 9 October 2017 (‘the 2017 will’). By the 2018 will, the deceased appoints the plaintiff and the defendant as the executors and trustees of her estate, bequeaths $100,000 to each of the defendant and Lynda, and provides that the residue of the estate is to be divided equally between the plaintiff, the defendant and Lynda. Under the 2017 will, the defendant is appointed as sole executor and trustee and the deceased’s estate is to be divided equally between the plaintiff, the defendant and Lynda.
A grant of probate has not yet been obtained in respect of either the 2018 will or the 2017 will. Since the death of the deceased, there has been significant disagreement between the plaintiff, the defendant and Lynda as to the administration of the estate, culminating in the commencement of this proceeding.
Procedural history
Between December 2021 and March 2022, the parties exchanged preliminary correspondence relating to, inter alia, obtaining a grant of probate in the deceased’s estate and the validity of the 2018 will. In substance, the plaintiff contended the 2018 will was invalid on the grounds that the deceased lacked testamentary capacity or that the 2018 will was the product of undue influence or duress. He also foreshadowed a claim for further provision from the estate of the deceased under Part IV of the Administration and Probate Act 1958 (Vic) (‘the Administration and Probate Act’).
The plaintiff subsequently filed an originating motion dated 13 April 2022 by which he sought orders pursuant to s 15 of the Administration and Probate Act that the defendant show cause why he should not either prove the 2018 will or renounce probate thereof, alternatively, orders pursuant to the inherent jurisdiction of the Court that the defendant be passed over as executor of the 2018 will and the plaintiff or an independent person be entitled to prove the 2018 will. A summons for directions in relation to the relief claimed in the originating motion was filed by the plaintiff on 19 April 2022.
On 22 June 2022, the defendant’s solicitors advertised the defendant’s intention to apply for probate of the 2018 will on the Supreme Court of Victoria website. On 4 July 2022, the defendant’s solicitors wrote to the plaintiff’s solicitors, drawing their attention to the defendant’s advertisement. On 5 July 2022, the plaintiff filed a caveat with the Registrar of Probates against a grant of representation of the 2018 will or the 2017 will, pursuant to r 8.01 of the Supreme Court (Administration and Probate) Rules 2014 (Vic).
At the relevant time, the 2018 will was held by the deceased’s solicitors, pending the approval of both the plaintiff and the defendant as executors for the release of the will. On 9 August 2022, the Court made orders that the plaintiff and the defendant jointly authorise the deceased’s solicitors deliver the 2018 will to the Court.
At a hearing on 12 August 2022, the plaintiff informed the Court that he sought orders that the defendant be passed over and an independent administrator be appointed ‘to attempt to prove’ the 2018 will. The Court determined that, in the circumstances, the plaintiff ought to renounce his right to prove the 2018 will and the defendant ought be entitled to prove the 2018 will, subject to the plaintiff’s right to challenge its validity or make a family provision claim. Orders were made that the defendant be permitted to uplift the original copy of the 2018 will from the Registrar of Probates for the purpose of the defendant making an application for probate and that the proceeding otherwise be dismissed. The parties were directed to file written submissions as to costs by 22 September 2022, with the costs to be determined on the papers.
Costs orders sought by the parties
On 21 and 27 September 2022, the plaintiff and the defendant, respectively, filed their submissions as to costs.
Plaintiff’s submissions
Broadly, the plaintiff submitted that his application was driven by the failure of the defendant to respond to and engage with correspondence from the plaintiff’s solicitors between December 2021 and March 2022 in relation to obtaining probate of the 2018 will or the 2017 will. The plaintiff submitted that his application was therefore ‘necessary’ in order to provoke the defendant to seek to obtain probate of the 2018 will and that he ‘achieved the result’ of allowing a grant of representation to move forwards. Further, he submitted that an application for the appointment of an independent person to administer the estate was a proper issue to have raised, which he contended was shown by the informal indication given by the Court at the hearing on 12 August 2022 that such an appointment would be appropriate.
The plaintiff further submitted that there were genuine issues about the validity of the 2018 will and the appropriateness of the defendant acting as executor, and circumstances in the proceeding reasonably calling for an investigation, such that the plaintiff was justified in seeking indemnity for his costs from the estate. As such, he sought orders that he be indemnified for his costs of the application out of the estate of the deceased, and invited the Court to either award costs against the defendant or order that such costs be borne by the deceased’s estate.
Defendant’s submissions
The defendant submitted that the plaintiff’s application was misconceived, in that the plaintiff intended to dispute the validity of the 2018 will but adopted the incorrect procedural course to do so, thereby causing both the defendant and the plaintiff to incur unnecessary costs. The defendant submitted that although the thrust of the plaintiff’s application was for the passing over of the defendant and the appointment of an independent administrator to prove the 2018 will, the evidence showed that the plaintiff clearly intended to immediately contest any application for a grant of probate or administration in respect of the 2018 will on the basis that it was the product of a lack of testamentary capacity, undue influence or duress. In the defendant’s submission, the proper procedural course in such circumstances would have been for the plaintiff to allow the defendant to make an application for a grant of probate in respect of the 2018 will, and to then dispute the validity of the 2018 will ‘in the usual way’ — that is, by caveat or grounds of objection.
In addition to being misconceived, the defendant submitted that the plaintiff’s application was wholly unsuccessful, and that costs ought to follow the event in the usual course. Accordingly, the defendant sought orders that the plaintiff bear his own costs of the proceeding without indemnity from the estate of the deceased and that the defendant’s costs be paid on a standard basis from the plaintiff’s share of the estate of the deceased, to be taxed in default of agreement.
Applicable principles
Costs are in the discretion of the Court, unless otherwise provided for by an Act or the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘the Rules’).[1] The ‘usual order as to costs’ is that a successful party in litigation is entitled to an award of costs in its favour and the unsuccessful party bears the liability for the costs of the unsuccessful litigation.[2] Such an award is typically for costs of and incidental to the proceeding, which includes costs incurred as part of the preparation of the litigation. The Court’s discretion must also be exercised through the prism of modern civil procedure reforms, which stress the quick, cheap and efficient resolution of the real issues in dispute.[3]
[1]Supreme Court Act 1986 (Vic) s 24(1), exercised in accordance with Ord 63 of the Rules. See also Civil Procedure Act 2010 (Vic) s 65C(1).
[2] Oshlack v Richmond River Council (1998) 193 CLR 72, 97 [67] (McHugh J).
[3]GE Dal Pont, Law of Costs (LexisNexis Australia, 4th ed, 2018) 159 [6.15], and in Victoria see Civil Procedure Act2010 (Vic) s 7(1).
Although the prima facie rule is that costs follow the event, where the litigation concerns probate, costs are usually paid out of the estate if the litigation has been caused, or contributed to, by the way in which a testator made his or her testamentary intentions known. Where the testator is not the cause of the litigation, but circumstances exist that reasonably call for an investigation, there is either no order as to the unsuccessful party’s costs or costs are paid out of the estate. If there is no reasonable cause for investigation, that is, if the unsuccessful party has not acted reasonably, then the costs will usually follow the event.[4]
[4]See Re Tsaousis [2019] VSC 511, [32] (McMillan J) and the cases there cited.
The usual rules relating to probate litigation are founded on the public interest in ensuring, on the one hand, that doubtful wills are not lightly admitted to proof by reason of the cost of opposing them and, on the other, the importance of parties not entering into ‘fruitless litigation’ on the basis that their costs will be paid by others. If the litigation is adversarial, it is common for the Court to apply the usual rule as to costs and order that the unsuccessful party pay the other party’s costs. This approach reflects the need to ensure that litigation not be encouraged, particularly if it concerns disunited family members battling for their perceived true inheritance, as well as the need to ensure proportionality of costs in litigation.[5]
[5]Ibid [33] (McMillan J). See also, eg, De Bruyne v Welstead [2022] NSWSC 886, [171]–[172] (Hallen J).
Consideration
The plaintiff’s position at the hearing was directed to passing over the defendant and seeking the appointment of an independent administrator to prove the 2018 will, whereupon the plaintiff would then presumably proceed with his previously indicated intention to either challenge the validity of the 2018 will or submit a claim pursuant to Part IV of the Administration and Probate Act. The plaintiff’s application was dismissed pursuant to the orders made on 12 August 2022.
As was correctly submitted by the defendant, in circumstances where one of two executors dispute the validity of a will, the proper course is to allow one such executor to make an application to prove said will, whereupon the other executor may then dispute the validity of the will in the usual way. That state of affairs was imminent from at least 4 July 2022, when the solicitors for the defendant indicated their client would proceed to seek a grant of probate of the 2018 will, in line with the defendant’s previously advertised intention. As from that date, there was no proper reason for the plaintiff to pursue the proceeding and it should have been discontinued. In such circumstances, it should have been relatively simple for the parties to agree to that fact, without the litigation proceeding any further. Such a course would have been consistent with the overarching obligations of the plaintiff and his solicitors: that is, to use reasonable endeavours to resolve the dispute, narrow the issues, ensure that costs were reasonable and proportionate and minimise delay.[6] By pursuing the matter to a hearing, the plaintiff caused the defendant to incur unnecessary costs.
[6]Civil Procedure Act 2010 (Vic) ss 22–25.
There were no circumstances that reasonably called for an investigation. The plaintiff’s application is more appropriately characterised as personal litigation, as opposed to probate litigation. While the proceeding does concern a deceased estate, the plaintiff engaged in an adversarial process that was misconceived and ultimately unnecessary, thereby needlessly incurring costs in a dispute concerning a relatively modest estate.[7] In such circumstances, the costs of the proceeding should not be paid out of the estate of the deceased. Instead, the plaintiff should bear the defendant’s costs of the application, in addition to his own costs, without recourse to the estate.
[7]See, eg, Shaw v Blanchett [2006] VSC 295, [39] (Hansen J).
Conclusion
The proceeding does not fall within a class of case where costs should be paid out of the estate of the deceased. The plaintiff’s application was misconceived and has ultimately been unsuccessful, and the costs of the proceeding should follow the event.
Orders
The Court orders:
(a) The plaintiff pay the costs of the defendant of and incidental to the proceeding personally, without indemnity from the estate of the deceased, to be assessed on the standard basis in default of agreement; and
(b) The plaintiff bear his own costs of and incidental to the proceeding personally, without indemnity from the estate of the deceased.
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