Steel v Ifrah (No 2) - [2013] VSC 167

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. S PRB 2012 04350

BENJAMIN JOSEPH STEEL	Plaintiff
v
ROBERT IFRAH	Defendant

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JUDGE:	DIXON J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	30 APRIL 2013
DATE OF RULING:	30 APRIL 2013
CASE MAY BE CITED AS:	STEEL v IFRAH (NO 2)
MEDIUM NEUTRAL CITATION:	[2013] VSC 167

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PRACTICE AND PROCEDURE – Costs – Probate – Costs of defendant where plaintiff succeeds –Whether litigation brought about by conduct of testator – Whether reasonable grounds for defendant to require enquiry into circumstances of making of will – Defendant’s costs to follow the event.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R Boaden	Richmond & Bennison
For the Defendant	Ms L Englefield	Pana Dokos

HIS HONOUR:

In this proceeding, the unsuccessful defendant seeks an order that the costs of both parties be paid from the estate on a solicitor and client basis. The successful plaintiff seeks an order that the defendant pay his costs of the proceeding and that there be no order for the defendant’s costs in the proceeding.

The general rule applied in exercising the discretion to award costs is that costs should follow the event unless there is adequate reason for a contrary order. In Will of Millar,[1] Hood J identified two classes of case as circumstances where departure from the general rule in probate matters may be warranted. Hood J described the classes in these terms:

(1)Where litigation has been brought about by the conduct of the testator.
(2)(a)       Where the parties who failed were reasonably led into the litigation by a bona fide belief in their case, and have, therefore, felt it desirable to inquire into the testamentary dispositions of the testator; or
(b)       if the circumstances reasonably led to an investigation of the matter, then the costs may be left to be borne by those who incurred them; or
(c)       if the testator by his conduct, habits, or mode of life has given opponents of the will reasonable ground for questioning his testamentary capacity, then their costs must be paid from the estate.[2]

[1][1908] VLR 682, 684.

[2]See also Twist v Tye [1902] P 92, 93-94.

In a recent case, Zivojin v Babic No 2,[3] Habersberger J was concerned with the second category of case and said of the rules as to costs in probate proceedings:

It is trite law that costs are in the discretion of the court and the general rule is that costs follow the event. However, there are some exceptions peculiar to probate applications, only some of which are relevant to this proceeding. There is a well-recognised exception that if the circumstances reasonably call for an investigation to be made before the court could properly pronounce in favour of the will a contesting party who fails in such a case should not be required to pay costs and should be left to bear his own costs or, alternatively, that the costs should be allowed out…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] VSC 167
Decision Date: 30 APRIL 2013

CaseChat Overview and Summary

In the case of Steel v Ifrah (No 2), the matter was heard in the Supreme Court of New South Wales. The dispute involved the costs incurred in a probate proceeding where the plaintiff, Steel, was the executor of the estate of the deceased, and the defendant, Ifrah, was a beneficiary. The central issue was whether the defendant should be liable for the plaintiff’s costs, given that the plaintiff ultimately succeeded in the proceedings. The court also needed to determine if the litigation was brought about by the conduct of the testator and whether the defendant had reasonable grounds to require an enquiry into the circumstances of the making of the will.

The court examined whether the defendant’s actions in contesting the will were justified. The primary consideration was whether the defendant had reasonable grounds to believe that the will was not properly executed or that there were circumstances that warranted a closer examination. The court found that the defendant had acted reasonably in contesting the will due to the testator's unusual conduct and the suspicious circumstances surrounding the will's creation. Consequently, the court concluded that the litigation was not brought about by the defendant’s conduct alone but was a response to the testator's actions.

The reasoning of the court was that the defendant’s costs should follow the event, meaning the defendant would not be liable for the plaintiff’s costs as the plaintiff ultimately succeeded in the probate proceedings. The court held that the defendant had acted reasonably and was justified in contesting the will given the circumstances. The court emphasised that the defendant's actions were a response to the testator's suspicious conduct, which provided reasonable grounds for the defendant to seek an enquiry into the will.

The final orders of the court were that the defendant, Ifrah, was not liable to pay the plaintiff’s costs. The court recognised the defendant’s reasonable grounds for contesting the will and determined that the litigation was not solely attributable to the defendant’s actions. This decision highlighted the importance of considering the testator’s conduct when assessing the reasonableness of a beneficiary’s decision to contest a will.

Orders