Re Tsaousis
[2019] VSC 511
•31 July 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY & PROBATE LIST
S PRB 2018 04499
IN THE MATTER of the will of PATRA TSAOUSIS, deceased
BETWEEN:
| STANITSAS (STEVE) TSAOUSIS | Plaintiff |
| v | |
| CHRISTOPHER TSAOUSIS (a minor, by his litigation guardian VICKI TSAOUSIS) | Defendant |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 21 March 2019 |
DATE OF JUDGMENT: | 31 July 2019 |
CASE MAY BE CITED AS: | Re Tsaousis |
MEDIUM NEUTRAL CITATION: | [2019] VSC 511 |
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COSTS — Where plaintiff conceded at trial that there was insufficient evidence to prove testamentary capacity — Whether conduct of the plaintiff unreasonable — Where solicitor continued to act in position of conflict — Whether plaintiff should pay costs personally on an indemnity basis — Indemnity costs awarded against plaintiff without recourse from the estate.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R Wells | Dandanis & Associates until 5 February 2019 Zervos Lawyers from 6 February 2019 |
| For the Defendant | Mr S Pitt | Lawson Hughes Peter Walsh |
HER HONOUR:
Introduction
Patra Tsaousis died on 23 October 2017, aged 89 years. She was survived by her two adult children, Stanitsas Tsaousis (‘the plaintiff’) and Athina Georgitsarou, and her grandson (‘the defendant’). The defendant is the child of the deceased’s son, Arthur Tsaousis, and is represented by his litigation guardian.
The deceased’s estate was valued for probate at $911,501, comprising the deceased’s property in Clayton valued at $905,000 and a small amount of cash.
At the time of the deceased’s death, she was living in an aged care centre in Clayton. According to the deceased’s death certificate, as informed by the plaintiff, prior to her death the deceased suffered from vascular dementia for five years and Alzheimer’s dementia for four years.
In the last years of her life, the deceased made three wills; they are dated 18 February 2015, 13 December 2013 and 3 July 2009. Each will was drawn by Mr Con Fabiatos, solicitor, of Dandanis & Associates. The 2015 will benefits the plaintiff to a much greater extent than the 2013 will and the 2009 will, to the detriment of the defendant.
Under the 2013 will and the 2009 will, the plaintiff and the defendant receive the Clayton property in equal shares. Under the 2015 will, the plaintiff is devised a life interest in the Clayton property where he can live as long as he wishes before electing, at any time during his life and at his sole discretion, to purchase the Clayton property, which is to be valued by a registered valuer, and pay one half of the value of the property less $25,000 to the defendant. As well as significantly reducing the value of the defendant’s share of the estate, there is the possibility of delay to the defendant in receiving his share of the estate.
Plaintiff’s application
By originating motion filed 21 March 2018, the plaintiff sought a grant of probate of the 2015 will. The plaintiff’s solicitor at that time was Mr Fabiatos. The defendant objected to the grant on the grounds that the deceased lacked testamentary capacity during the period shortly before and at the time of execution of the 2015 will, did not know and approve the contents of the 2015 will and, in executing the 2015 will, acted under the undue influence of the plaintiff. Particulars of the grounds were subsequently filed by the defendant.
On 22 March 2018, the Assistant Registrar of Probates raised the following requisition:
Medical evidence by Affidavit from the deceased person's Medical Practitioner is to be filed to establish the testamentary capacity of the deceased at the time the Will was executed. The Death Certificate indicates that the deceased was diagnosed with Vascular dementia — 5 years and Alzheimer 's dementia — 4 years with the Will being executed in 2015.
In response to the requisition as to the deceased’s testamentary capacity, the plaintiff filed an affidavit by Dr Andrew Hadjitofi sworn 18 May 2018, in which he deposed:
(a) that he had been made aware of the four factors stated therein required to establish testamentary capacity (being the Banks v Goodfellow test);
(b) that, based on his observations of the deceased on 18 February 2015, he was of the opinion that ‘in a limited but significant capacity’ she satisfied each of those four factors;
(c) that he had provided with a letter to Dandanis & Associates on 18 February 2015 and exhibited a copy of the letter;
(d) that he had provided a further (more detailed) report dated 4 May 2018 in response to the requisition from the Registrar of Probates about the deceased's capacity and exhibited a copy of the report; and
(e) that he had been provided with an Expert Witness Code of Conduct and agreed to be bound by it.
Further interlocutory steps were completed in the proceeding, including discovery of the deceased’s medical records. On 7 December 2018, the proceeding was listed for trial on 21 March 2019 on an estimate of two days.
By letter dated 20 December 2018, the plaintiff made a ‘without prejudice save as to costs’ offer to the plaintiff (‘the offer’). The offer was for the parties to submit consent orders seeking that the proceeding be dismissed, the costs of the parties be met from the estate on a standard basis, and that the plaintiff would not proceed with seeking a grant of probate of the 2015 will. The letter also states that the plaintiff would then be ‘pleased to discuss with [the defendant] whether the 2013 or 2009 wills [sic] should be probated’. The offer was said to be made as the plaintiff was ‘conscious of the limited value of the estate and significant legal costs to be incurred in this proceeding’.
The solicitors for the defendant responded on 16 January 2019 and rejected the offer on the basis that: (i) the proceeding could not be dismissed without the intervention of the Court, as the defendant is a minor; and (ii) the medical material discovered and the file notes produced during the course of discovery demonstrate that, at that juncture, the matter needed to be determined by the Court. The solicitors for the defendant also referred to previous correspondence regarding the conflict of Dandanis & Co representing the plaintiff and asked who would be the legal representation for the plaintiff in the proceeding.
On 26 February 2019, the plaintiff filed a document headed ‘Outline of Opening and Evidence to be adduced’. In that document it was stated that ‘it was expected that it was assumed’ that Dr Hadjitofi would give evidence confirming the matters stated in his affidavit sworn 18 May 2018.
The trial
At the commencement of the trial on 21 March 2019, counsel for the plaintiff informed the Court and the defendant what was then known to be the precise evidence of Dr Hadjitofi as follows:
(a) other than that the deceased stated to him she wanted to make a will that would provide for the person who was looking after her the most, and that was the plaintiff, he did not ask her and she did not explain the extent of the benefits her will was going to provide to the plaintiff;
(b) that his consultation with the deceased on 18 February 2015 lasted around 10 minutes;
(c) as to how he was able to state that the deceased was aware of those who had a claim to her estate and the basis of such claims, that he did not discuss that directly with the deceased at all, and could not elaborate further on how he was able to say that the deceased was aware of those who had a claim upon her bounty; and
(d) his assertion that the deceased had the ability to evaluate and discriminate between the respective strengths of the claims of those who had a claim upon her bounty was based on the deceased having stated to him that she wanted to look after the plaintiff and that the plaintiff had looked after her the most.
Counsel then informed the Court that he had instructions to concede that there was insufficient evidence available to demonstrate that the deceased possessed testamentary capacity at the time of executing the 2015 will or the 2013 will and, in the circumstances, both the 2013 and the 2015 wills could not stand as valid wills. Counsel stated that the appropriate course was for the plaintiff, as the surviving named executor in the will of the deceased dated 3 July 2009, to make an application for probate of the 2009 will following dismissal of the proceeding.
Other than counsel stating to the Court that he had very recently conferred with Dr Hadjitofi by telephone, no other explanation was provided for the late communication of this evidence to the Court or to the defendant. This was notwithstanding that, by letter dated 16 January 2019 to the plaintiff’s then solicitors, the defendant’s solicitors confirmed that Dr Hadjitofi would be required for cross examination at the trial.
Orders were made that the proceeding be dismissed and for the filing of written submissions as to costs, to be decided on the papers.
Plaintiff’s submissions
The plaintiff does not oppose an order that the defendant’s costs, calculated on the standard costs basis, be paid out of the estate of the deceased. This is on the basis that he accepts it was proper for the defendant to pursue his challenge to the validity of the 2015 will.
The plaintiff rejects any suggestion that he acted unreasonably in pursuing the proceeding and seeks that his costs of the proceeding be paid out of the estate of the deceased or, alternatively, that each side bear their own costs and there be no orders as to the costs of the proceeding.
The effect of the plaintiff’s proposed orders is that the value of the estate would be diminished by the litigation to the extent of the costs of both the plaintiff and the defendant. The effect of the plaintiff’s alternative orders is that the personal assets of both the plaintiff and defendant would be diminished, but not those of the estate.
The quantum of the plaintiff’s costs of the proceeding up to and including the first day of trial totals $50,458. It is not known whether this quantum is assessed on scale or pursuant to a costs agreement. The plaintiff also seeks further costs of an unknown quantum for his reasonable and proper legal costs for all work performed from 22 March 2019 onwards, up to the completion of the work required as a result of the orders made on 21 March 2019, being provision of the costs information, perusal of the defendant's costs submissions and preparation of the plaintiff’s submissions as to costs.
The plaintiff submits that the Court should give ‘significant weight’ to the following factors:
(a) The plaintiff arranged for the same solicitor who was a familiar with the deceased (having made her previous two wills for her) to prepare the last will and (critically) for that solicitor to attend upon the deceased, and satisfy himself that the deceased had capacity to execute the last will;
(b) The solicitor, in turn, having been informed of the deceased’s age and her slight memory loss, indicated that he would need a medical certificate from the deceased’s treating medical practitioner, showing that she had capacity to execute the will;
(c) Dr Hadjitofi provided a medical certificate to the solicitor; and
(d) The solicitor and an experienced law clerk attended upon the deceased and independently satisfied themselves that the deceased appeared to have capacity to execute the will.
The plaintiff also submits that the proceeding was ‘in effect, inevitable’, specifically:
(a) that no application for any grant of probate of any will of the deceased could have proceeded by an ex parte, uncontentious probate application;
(b) that the Registrar of Probates would ‘almost certainly’ have referred any application for probate of any earlier will to the Court for determination; and
(c) that ‘judicial satisfaction’ of the testamentary capacity or otherwise of the deceased at the date of the last will ‘was always required’.
Finally, the plaintiff relies on the offer, stating that it was made after seeing all the medical material but before there had been the further information provided by Dr Hadjitofi, and submits that significant costs would have been saved had the defendant accepted the offer.
Defendant’s submissions
The defendant seeks orders that the plaintiff pay the defendant's costs of and incidental to this proceeding personally, on an indemnity basis, to be taxed in default of agreement, and that the plaintiff bear his own costs of and incidental to this proceeding personally, without being indemnified for those costs out of the estate of the deceased.
The effect of the defendant’s proposed orders is that the defendant’s share of the estate would not be diminished by the litigation and the plaintiff’s personal assets would be diminished to the extent of the quantum of his own costs and the defendant’s costs.
The defendant submits, inter alia, that:
(a) due to his intimate involvement in the deceased’s affairs and her care, at all material times the plaintiff knew, or should be taken to have known, about the facts that would render the will invalid;
(b) Dandanis & Associates was ‘hopelessly conflicted’ in respect of the caveat proceeding and the plaintiff should have sought independent advice following the correspondence between January and March 2018;
(c) considering the state of the evidence, the 2015 will should never have been prepared, signed or witnessed, much less made the subject of an application for probate;
(d) in light of the complete absence of any credible contemporaneous and countervailing documentary evidence speaking against the medical records of the deceased, the concessions made by the defendant should have been made well before the trial date, thus saving the defendant and the Court significant expense and inconvenience;
(e) the proceeding has been an unnecessary, expensive and time-consuming distraction from the proper administration of the deceased’s estate and has resulted in significant stress for the defendant and the litigation guardian;
(f) the proceeding assumed the character of adversarial litigation early on, largely because the plaintiff and his solicitor were heavily invested in having the 2015 will admitted to probate.
Applicable principles
The jurisdiction of the Court as to costs is conferred by s 24(1) of the Supreme Court Act 1986. This general discretion must be exercised in accordance with Order 63 of the Supreme Court (General Civil Procedure) Rules 2015.[1] A successful party is prima facie entitled to a costs order. The ‘usual order as to costs’ is that ‘costs follow the event’ and a successful party in litigation is entitled to an award of costs in its favour.[2] The unsuccessful party bears the liability for the costs of the unsuccessful litigation.[3]
Costs where no adjudication on the merits
[1]Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 3) [2012] VSC 399, [11] (Croft J), affd on the issue of special costs Sunland Waterfront (BVI) Ltd & Anor v Prudentia Investments Pty Ltd & Ors [2013] VSCA 237, [538]–[551] (Warren CJ, Osborn JA and Macaulay AJA). See also Coombes v Ward (No 2) [2002] VSC 84.
[2]Oshlack v Richmond River Council (1998) 193 CLR 72, 97 (McHugh J).
[3]Ibid.
The plaintiff relied on the costs principles for when a proceeding ends without a determination on the merits.[4] In such circumstances, the Court has discretion to make costs orders either where a defendant has consented to a grant of final relief or if there is consensus as to the outcome of the proceeding. In considering the costs of the proceeding where there is no determination on the merits, the Court may reach a conclusion that a costs order should be made. For example, in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin, McHugh J stated:
In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. [5]
[4]Citing the principles and authorities set out in Re Bovill; Bovill v Bovill [2017] VSC 697, [30]–[32] (McMillan J); Re Anthony; Rogan v Rogan [2017] VSC 668, [13] (McMillan J).
[5](1997) 186 CLR 622, 624. See also Seng Hpa v Walker [2017] VSC 320, [77]–[81] (McMillan J).
This proceeding was not determined on the merits. However, the plaintiff sought dismissal of the proceeding on the basis that there was insufficient evidence to demonstrate that the deceased possessed testamentary capacity at the time of execution of the 2015 will and the 2013 will. In this way, the plaintiff’s concession is tantamount to a discontinuance. In Ferny Sky Pty Ltd, Capital Finance Aust, Whelan J summarised the authorities regarding discontinuance of proceedings:
In the absence of a trial on the merits it will usually not be appropriate for a court considering the issue of costs to determine the merits or to attempt to assess the likely outcome of a hypothetical trial. But in some cases, a judge may feel confident that one party was almost certain to have succeeded if the matter had been fully tried and, in such circumstances, the judge is justified in determining costs on that basis. In some cases, the discontinuance itself can be seen as an acknowledgement of likely or even certain defeat or as what has been described as a step amounting to "effective surrender”.[6]
Standard costs and indemnity costs
[6][2006] VSC 366, [25].
Costs assessed on the standard basis are all costs reasonably incurred and of reasonable amount.[7] Costs assessed on an indemnity basis are all costs except insofar as they are of an unreasonable amount or have been unreasonably incurred.[8]
[7] Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.30.
[8] Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.30.1.
The prima facie position in respect of costs in litigation is for standard costs to be ordered by the Court. A special costs order will only be made where the proceeding exhibits a special or unusual feature or special circumstances.[9] Each proceeding must be considered on its own facts and, specifically, whether those facts support the making of a special order for costs. In Ugly Tribe Co Pty Ltd v Sikola, Harper J identified the types of circumstances that warranted a special costs order, noting that the categories of circumstances are not closed.[10]
Costs in probate litigation
[9]Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, 230 (Sheppard J), quoting Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397, 400–1 (Woodward J).
[10][2001] VSC 189, [7]–[8]. See also Colgate-Palmolive Co v Cussons Pty Ltd (n 9); Sunland Waterfront (BVI) Ltd v Prudentia Investments Pty Ltd (No 3) (n 1).
Although the prima facie rule is that costs follow the event,[11] where the litigation concerns probate, the 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 or alternatively by the conduct of the residuary beneficiaries.[12] 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.[13] For there to be reasonable grounds that call for an investigation, it must be established that, when proceedings were commenced, all proper steps were taken to inform the challenger as to the facts of the case and, having done so, the challenger has been led reasonably to the bona fide belief that there was good ground for impeaching a will.[14] 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.[15]
[11]See Twist v Tye [1902] P 92; Spiers v English [1907] P 122; Middlebrook v Middlebrook (1962) 36 ALJR 216, 217 (Dixon CJ); Re Green [1969] WAR 67, 83 (Wolff CJ).
[12]Hall v Carney(No 2) [2012] SASCFC 105, [8]–[12] (Gray J). See also Reginald Alfred Becker v Public Trustee of New South Wales [2006] NSWSC 1146, [12]–[15] (Nicholas J); Murdocca v Murdocca (No 2) [2002] NSWSC 505.
[13]Ibid.
[14] Davies v Gregory (1873) LR 3 PD 28.
[15]Gray v Hart [No 2] [2012] NSWSC 1562, [19] (White J); Spiers v English [1907] P 122; Re Cutliffe's Estate [1959] P 6; In the Will of Millar [1908] VLR 682.
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.[16] If the litigation is adversarial litigation, 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.[17] This means that in respect of costs in probate litigation, it can no longer be assumed that the costs will be allowed either wholly or partly out of the estate. This approach reflects the need to ensure that litigation not be encouraged, particularly if it is adversarial litigation between disunited families battling for their perceived true inheritance, together with the concerns frequently expressed on the proportionality of costs in litigation.[18]
[16]Mitchell v Gard (1863) 3 Sw & Tr 275, 279 (Sir JP Wilde); Re Hodges; Shorter v Hodges (1988) 14 NSWLR 698, 709 (Powell J); Shorten v Shorten[No 2] [2003] NSWCA 60, [15] (Mason P).
[17]Re Buckton; Buckton v Buckton [1907] 2 Ch 406, 414 (Kekewich J); Murdocca v Murdocca (No 2) [2002] NSWSC 505; Steel v Ifrah (No 2) [2013] VSC 167; Warton v Yeo [2015] NSWCA 115.
[18]Fielder v Burgess [2014] SASC 98, [58], [65] (Kourakis CJ); Shovelar v Lane [2011] EWCA Civ 802, [44] (Ward LJ, Arden and Moore-Bick LJJ agreeing).
Consideration
It is common ground that the plaintiff sought dismissal of the proceeding as there was insufficient evidence to demonstrate that the deceased possessed testamentary capacity at the time of execution of the 2015 will and the 2013 will. On that basis, the Court can be satisfied that, if the proceeding had been fully tried, the defendant would almost certainly have succeeded. The dismissal of the proceeding was an acceptance of defeat and an effective surrender on the part of the plaintiff.[19]
[19]See Ferny Sky Pty Ltd, Capital Finance Aust (n 6).
The Court accepts that the question of whether or not the 2015 will should have been prepared or executed in the first place is not ‘the fault of the plaintiff’. As the issue now concerns the costs of the parties in the probate proceeding, the reasonableness or propriety, or otherwise, of any involvement that the plaintiff may have had in the preparation and execution of the deceased’s will should not be taken into account. However, it is relevant to consider whether the plaintiff, knowing what he did about the circumstances in which the 2015 will was prepared and executed, should have proceeded to propound the will and continue the litigation. The plaintiff’s assumed knowledge in this regard is limited to the affidavit evidence of Mr Fabiatos and the facts contained in the plaintiff’s written submissions. As the proceeding did not proceed to trial, the Court has had no regard to any untested facts, including the defendant’s assertion that the plaintiff was intimately involved in the deceased’s affairs and care.
From as early as 13 February 2018, the plaintiff was on notice of the defendant’s concerns as to the deceased’s testamentary capacity. At that time, the defendant’s solicitors raised a number of issues surrounding the 2015 will with the plaintiff’s solicitor, Mr Fabiotos, in light of the 2015 will having been executed when the deceased had been diagnosed with dementia and was taking medication for that condition. At that time, the defendant’s solicitors sought copies of the deceased’s previous wills and her death certificate. They also noted that while the defendant did not wish to involve the estate in costly litigation, they foreshadowed lodging a caveat in the event that the plaintiff sought to propound the 2015 will. Mr Fabiatos responded to the letter two days after filing the plaintiff’s application for a grant of probate of the 2015 will.
Mr Fabiatos drew the 2015 will and was also a witness to the deceased’s signature. In his ‘affidavit of due execution – translator’ sworn 20 March 2018, Mr Fabiatos deposes that he is a solicitor and witness to the deceased’s will. He deposes that, prior to the execution of the 2015 will by the deceased, the will was read over by him to her in Greek and she indicated to him that she knew and approved the contents of the will and understood the nature and effect of the will. Mr Fabiatos did not state any basis for his conclusions as to the deceased’s knowledge and approval and understanding of the 2015 will. He did not refer to any file notes for taking instructions for the 2015 will and did not depose to the reasons for handwritten alterations made to clause 4 of the 2015 will.
In his affidavit, Mr Fabiatos did not refer to the deceased’s testamentary capacity, nor did he refer to Dr Hadjitofi’s letter dated 18 February 2015. He forwarded a copy of this letter to the defendant’s solicitors on 23 March 2018, which was two days after filing the plaintiff’s application for a grant. Mr Fabiatos stated that the doctor’s letter confirmed ‘the capacity of the deceased at the time of execution of the will’ and had been provided to him when he attended on the deceased for her to execute the 2015 will. Mr Fabiatos did not set out any basis for concluding that the letter confirmed the testamentary capacity of the deceased, and the letter does not justify such a conclusion. The letter, as written, states:
Thankyou for seeing Patra aged 87 yrs who presents with request for her amendment to her existing will and dispersement [sic] of estate.
This letter is to confirm that at this point in time [the deceased] is of reasonable sound mind and judgment to give a direction as to her wishes on the above involving only to the parties of her Son Steven Tsaouisis; Chris Tsaousis of Melbourne and Athina Georgitsarou who now reside Gorgopi in Greece.
The plaintiff submits that the Court should attach ‘significant weight’ to the fact that Mr Fabiatos requested and obtained the letter from Dr Hadjitofi on the same day that the deceased executed the 2015 will. In fact, it does little to aid the plaintiff’s case as to costs. That fact may speak to the reasonableness of the Mr Fabiatos’ actions in proceeding to execute the will of the deceased, but the plaintiff in these circumstances was required to make further and better inquiries as to testamentary capacity before propounding the will.
Mr Fabiatos prepared the deceased’s last three wills. If he was unaware of the deceased’s dementia prior to the 2015 will, he should have been aware of it when he made his affidavit, as he had exhibited the deceased’s death certificate to the plaintiff’s affidavit in support of the grant of the 2015 will. The plaintiff should also have been aware of the deceased’s dementia as he was the informant named on the death certificate.
After the requisitions from the Assistant Registrar of Probates on 22 March 2018, the affidavit of Dr Hadjitofi sworn 18 May 2018 was filed in the proceeding. Dr Hadjitofi deposed to the testamentary capacity of the deceased, swearing that the deceased passed the Banks v Goodfellow test in a ‘limited but significant capacity’. The contents of the affidavit did not state his precise evidence that was described by counsel at the commencement of the trial and no explanation was given for the precise evidence of Dr Hadjitofi being obtained at such a late stage of the proceeding.
The plaintiff and Mr Fabiatos were both aware, or should have been aware, that Dr Hadjitofi would be a critical witness. Both had knowledge of the circumstances in which the 2015 will was executed and the dementia of the deceased at that time. They were also aware, or should have been aware, that the 2015 will substantially diminished and delayed the defendant’s share in the estate to the advantage of the plaintiff. In these circumstances, the plaintiff had a direct personal interest in opposing the defendant’s challenge to the 2015 will.
The plaintiff and Mr Fabiatos should also have been aware that Mr Fabiatos would be a key witness in any caveat proceeding from at least as early as 20 March 2018, when Mr Fabiatos swore an affidavit of due execution. The plaintiff and Mr Fabiatos were on notice that the testamentary capacity of the deceased was an issue at least more than a month before the proceeding was issued. It is clear that the plaintiff should have sought independent advice. Despite this, Mr Fabiatos continued to act in a position of conflict for almost another year, that is, until 6 February 2019. Properly advised, the plaintiff should never have applied for probate of the 2015 will and, even having done so, should not have contested the defendant’s grounds of objection to the grant.
The plaintiff’s submission that the proceeding was ‘inevitable’ and that the matter was always going to require judicial determination is erroneous. Had the plaintiff conducted proper inquiries before issuing the proceeding, he would have acknowledged that the deceased lacked testamentary capacity at the time she executed the 2015 will. In those circumstances, an application for a grant of probate of one of the previous wills, together with appropriate affidavits of support, should have been filed with the Registrar of Probates, who routinely deals with applications of this type. It is entirely due to the misconceived nature of the initial application, and the subsequent conduct of the plaintiff and his solicitors, that this proceeding required judicial attention.
The offer made by the plaintiff does not assist his position in regard to the costs of the proceeding. At any stage during the proceeding, the plaintiff could have sought discontinuance of the proceeding pursuant to r 6.10 of the Supreme Court (Administration and Probate) Rules 2014. Rather, the plaintiff allowed costs to continue accruing up to the first day of trial.
The plaintiff and Mr Fabiatos have acted unreasonably in their conduct of the proceeding, both before and after its commencement. It is also clear that the plaintiff was either not advised to discontinue the proceeding, or failed to accept that advice, after he had instructed his current solicitors. Both the plaintiff and his solicitors have wasted the defendant’s time and the Court’s time and incurred unnecessary costs. Such conduct falls within the special circumstances that warrant a special costs order.
In the circumstances, the defendant was successful in the proceeding and is entitled to a costs order in his favour on an indemnity basis. It would not be appropriate that any of the costs be paid out of the estate of the deceased as that result would fail to reflect the defendant’s position. Those costs at the first instance should be paid by the plaintiff. Any contribution towards these costs by the plaintiff’s solicitors is an issue between the plaintiff and them.
The Court orders as follows:
(a) the plaintiff pay the defendant's costs of and incidental to this proceeding personally, on an indemnity basis, to be taxed in default of agreement;
(b) the plaintiff bear his own costs of and incidental to this proceeding personally, without being indemnified for those costs out of the estate of the deceased.
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