Thomas v Nash (No 2) - [2010] SASC 171

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
THOMAS & ANOR v NASH (No 2)
[2010] SASC 171
Reasons for Decision of The Honourable Chief Justice Doyle
11 June 2010
SUCCESSION - WILLS, PROBATE AND ADMINISTRATION - PROBATE AND LETTERS OF ADMINISTRATION - COSTS - GENERAL PRINCIPLES
SUCCESSION - WILLS, PROBATE AND ADMINISTRATION - PROBATE AND LETTERS OF ADMINISTRATION - COSTS - WHERE LITIGATION NOT CAUSED BY TESTATOR - REASONABLENESS
SUCCESSION - WILLS, PROBATE AND ADMINISTRATION - PROBATE AND LETTERS OF ADMINISTRATION - COSTS - WHERE LITIGATION NOT CAUSED BY TESTATOR - UNNECESSARY LITIGATION
Defendant unsuccessfully challenged validity of will – plaintiffs sought costs of proceeding from defendant on an indemnity basis – general principles regarding costs in probate suits – whether raising issue of testamentary capacity was reasonable – whether raising issue of undue influence was reasonable – what appropriate form of costs order is where reasonable to raise one issue but unreasonable to raise another issue – conduct of defendant in prolonging case – plaintiffs entitled to recover four-fifths of their costs of the action as between party and party from the defendant.
Middlebrook v Middlebrook & Anor (1962-1963) 36 ALJR 216; Spiers v English [1907] P 122; Public Trustee v Hall [1937] SASR 252; Re Hebert Brothers Deceased (1990) 101 FLR 279; Thomas & Anor v Nash [2010] SASC 153, considered.

THOMAS & ANOR v NASH (No 2)
[2010] SASC 171
Civil

DOYLE CJ: In these reasons I deal with the costs of the proceedings the subject of my decision in Thomas & Anor v Nash [2010] SASC 153.
After a lengthy hearing I pronounced for the force and validity of the last will and testament of Violet Frances Nash.
I found that Mrs Nash had testamentary capacity. Mr Nash had denied this. I accepted the case for the plaintiffs, Mr and Mrs Thomas, the executors named in the will.
I rejected a claim by Mr Nash that Mrs Nash executed the will as a result of undue influence exercised over her by Mr and Mrs Thomas.
On the question of Mrs Nash’s testamentary capacity, I accepted medical evidence as to Mrs Nash’s state of health and state of mind put forward by the plaintiffs, and the evidence of Mr Fisher, the solicitor who prepared the will. I accepted the substance of the evidence of Mr and Mrs Thomas. The case for the plaintiffs was a strong one. Mr Nash had little material by way of answer to that case. He called no medical evidence casting any doubt on Mrs Nash’s capacity. His own evidence was of limited assistance.
The issue raised by the plea of undue influence was not as clear cut. I summarised Mr Nash’s case on this aspect, as I understood it, at [175]. It is fair to say that there were some matters that warranted enquiry, and some matters that called for explanation. But those matters were satisfactorily explained at trial: at [178]‑[179]. To a considerable degree the case advanced by Mr Nash was based on overstating the decline in Mrs Nash’s health and mental state as she aged, on circumstances attributable to his own conduct towards Mrs Nash (in particular, her alienation from him), and on fixed suspicions held by Mr Nash about Mr and Mrs Thomas. Mr Nash was not willing to consider the evidence on its merits.
I accept that Mrs Nash has treated her two sons, Mr Nash and Mr John Nash, less favourably than Mr and Mrs Thomas. That, no doubt, has affected Mr Nash’s thinking. But his own behaviour towards Mrs Nash played a part in that. He is unwilling to acknowledge that.
The principles that I am to apply in deciding the application by the plaintiffs for costs are well established. In Middlebrook v Middlebrook & Anor (1962‑1963) 36 ALJR 216, Dixon CJ said at 217:
No doubt in probate suits the prima facie rule is that, as in other litigation, costs follow the event. But in probate suits there are considerations which more readily affect the application of this rule than in most other forms of litigation. See Re Keane, [1909] VLR 231, at p 239. An examination by Hood J of the more important English cases decided up to the date of his judgment will be found in Re Millar, [1908] VLR 682. There are in the present case circumstances which would naturally lead the caveator to think that an investigation of the validity of his father’s last will was justified. If this case were judged on its general circumstances only, I think that adequate reasons would be seen for entertaining some doubt as to the validity of the will. It is only as a result of investigation that the reasons for finding affirmatively in favour of the testator’s testamentary capacity distinctly appear. In these circumstances the proper course is to apply the principle enunciated by Sir Gorrell Barnes P. that “if the circumstances lead reasonably to an investigation of the matter then the costs may be left to be borne by those who have incurred them”.
The decision of Sir Gorrell Barnes in Spiers v English [1907] P 122 has often been referred to as providing sound guidance. He said at 123:
In deciding questions of costs one has to go back to the principles which govern cases of this kind. One of those principles is that if a person who makes a will or persons who are interested in the residue have been really the cause of the litigation a case is made out for costs to come out of the estate. Another principle is that, if the circumstances lead reasonably to an investigation of the matter, then the costs may be left to be borne by those who have incurred them. If it were not for the application of those principles, which, if not exhaustive, are the two great principles upon which the Court acts, costs would now, according to the rule, follow the event as a matter of course. Those principles allow good cause to be shewn why costs should not follow the event. Therefore, in each case where an application is made, the Court has to consider whether the facts warrant either of those principles being brought into operation.
The principles were conveniently summarised by Angas Parsons J in Public Trustee v Hall [1937] SASR 252 as follows at 253:
The rules relating to costs have been classified as follows: - 1. If the litigation results through the fault of the testator or those interested in the residue the costs may properly be paid out of the estate. 2. If there be sufficient and reasonable ground looking to the knowledge and means of knowledge of the opposing party to question either the execution of the will or the capacity of the testator, or to put forward a charge of undue influence or fraud, the losing party may properly be relieved from the costs of his successful opponent. 3. Unless the circumstances of the case bring it within one of the foregoing exceptions, the general rule that costs follow the event ought to prevail.
I refer also to the discussion of the relevant principles by Kearney J in Re Herbert Brothers Deceased (1990) 101 FLR 279 at 304-308.
In the present case there is no basis for saying that the conduct of Mrs Nash was the cause of the litigation. Granted, her treatment of Mr Nash and John Nash in her will might seem hard, but she had reasons that were explained in evidence for making the provisions that she made. As I have already commented, the case in support of the finding that Mrs Nash had testamentary capacity was a strong one. There was nothing that Mr Nash pointed to, apart from the manner in which he and his brother were treated, that called for any investigation.
There is no basis for criticising Mr and Mrs Thomas in relation to the issue of testamentary capacity, or in relation to their conduct of the case. An affidavit filed by their solicitor shows that they made appropriate disclosure of relevant material to Mr Nash at his request. They were willing to canvass settlement with him.
On that point, I have had no regard to settlement offers that were made by Mr and Mrs Thomas and by Mr Nash. The reason for this is that those settlement offers embraced a settlement of the issues raised in this action as well as a settlement of the claim by the executors that Mr Nash is liable to repay to his mother’s estate a substantial amount of money advanced by her to him. The issue of Mr Nash’s liability to the estate is not an issue that was before me, and it is not appropriate for me to make any assessment of the likelihood of a claim by the estate succeeding.
There is no reason to deny Mr and Mrs Thomas their ordinary entitlement to be paid their costs from the estate.
On the issue of testamentary capacity, there is no reason for me to order that Mr Nash should have his costs from the estate. I consider that his opposition to the will on this ground, and his persistence in that approach after the evidence from the doctors and from the solicitor, was unreasonable. It is appropriate to order that he pay the plaintiffs’ costs of this issue.
The only doubt, in my opinion, is whether the circumstances led reasonably to the raising of, and an investigation of, the question of undue influence. If the plea of undue influence was reasonably raised then, even though the plea ultimately failed, there is a basis for ordering that the costs of that issue should be left to lie where they fall, the Court making no order against Mr Nash for the costs incurred by the executors in dealing with that issue.
Having reflected on the matter, I am persuaded that this issue was reasonably raised by Mr Nash. He should not be ordered to pay the costs of this issue. But nor should he have his costs out of the estate.
But what form of order is appropriate? I do not wish to burden the estate with the cost of a further dispute on costs. I propose to avoid an argument over the allocation of costs to issues by determining what proportion of the overall costs should be recovered by the plaintiffs.
Most of the evidence before me was required to deal with the issue of testamentary capacity. This is so, even though some of it was relevant to the issue of undue influence. For instance, the medical evidence bearing on the issue of testamentary capacity, and the evidence from the solicitor, made it less likely that Mrs Nash was the subject of undue influence, because it suggested that she was alert and well able to look after her own interests.
As I observe in my reasons dealing with the validity of the will, Mr Nash has unnecessarily prolonged the case. My reasons outline how that came about.
I considered whether my order should reflect the manner in which Mr Nash has prolonged the case. It will often be the case that the presence of an unrepresented litigant will add to the length of a case. That of itself is not a basis for departing from what would otherwise be the ordinary order as to costs. But in this case I consider that Mr Nash prolonged the case unreasonably because of his lack of organisation, his unwillingness to accept rulings by me, the time spent on the issue of tape recordings, and delays in the questioning of witnesses.
By ordering that Mr Nash pay the plaintiffs their costs, other than that part of the costs determined by me to be attributable to a dispute on the issue of undue influence, I can deal with that.
I consider that it is appropriate to order that Mr Nash pay to the plaintiffs four fifths of their costs of the action. I consider that that apportionment reflects a fair assessment of the additional costs required to deal with the issue of undue influence.
Finally, Mr Coppola, counsel for the plaintiffs, argued that the order for costs should be on an indemnity basis. I disagree. I agree that Mr Nash’s opposition to the finding of testamentary capacity was unreasonable, or was persisted in to an unreasonable extent. However, he was entitled to put the plaintiffs to proof, and it might be said that until the evidence from the doctors and the solicitor was before the Court, he might have had a belief that his mother lacked testamentary capacity at the relevant time. For those reasons I decline to order that costs be on an indemnity basis, or as between solicitor and client.
Accordingly, I order that the plaintiffs recover from Mr Nash four-fifths of their costs of the action as between party and party. This order is not intended to disturb any orders for costs already made. Any costs reserved should be dealt with separately.