Whitehead v State Trustees Limited (No 2) - [2011] VSC 516

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

S CI 2009 8802

IN THE MATTER of Part IV of the Administration and Probate Act 1958

and

IN THE MATTER of the will and estate of BARRY ROBERT SAMSON (deceased)

KIM DIANE WHITEHEAD	First plaintiff
ALEX WILLIAM WHITEHEAD (by his litigation guardian LORRAINE WHITEHEAD)	Second plaintiff
v
STATE TRUSTEES LIMITED (ACN 064 593 148) (as the executor of the will of the deceased)	Defendant

JUDGE:	BELL J
WHERE HELD:	Melbourne
DATE OF HEARING:	On written submissions after judgment
DATE OF JUDGMENT:	19 October 2011
CASE MAY BE CITED AS:	Whitehead v State Trustees Limited (No 2)
MEDIUM NEUTRAL CITATION:	[2011] VSC 516

TESTATOR’S FAMILY MAINTENANCE – costs of successful plaintiffs – court orders for provision exceeded offer of compromise and Calderbank offer – whether plaintiffs entitled to standard order for solicitor-client costs out of the estate or indemnity costs – whether executor defendant had unreasonably rejected offers – whether had legitimate interest in defending will and full forensic examination at trial of unusual application – value of estate not known until after trial and exceeded expectations – costs of unsuccessful defendant – whether entitled to standard order for indemnity costs out of the estate or on some lesser basis – whether should be interest ordered on amounts ordered for provision – whether should start from or pre-date judgment - Supreme Court (General Civil Procedure) Rules2005, 26.08(2), Supreme Court Act 1986, s 24, Administration and Probate Act 1958, s 97(6).

APPEARANCES:	Counsel	Solicitors
For the first plaintiff	Mr R N J Young	Zeljko Stojakovic, Barristers & Solicitors
For the second plaintiff	Mr M McKenzie	Rosemarie Ryan Lawyers
For the defendant	Mr A G Southall QC with Mr A Bolkas	Legal Branch, State Trustees

HIS HONOUR:

By a judgment delivered on 2 September 2011, I granted the plaintiffs’ application for orders for provision out of the estate of the will of the deceased.[1] I ordered provision of a legacy in the lump sum of $450,000 for the first plaintiff (Kim) and an amount of $400,000 payable to the senior master for the benefit of the second plaintiff (Alex).
[1]Whitehead v State Trustees Limited [2011] VSC 424.

It is now necessary to consider costs and interest. These issues have been addressed in written submissions which were made by the parties after judgment was delivered.

Kim’s written submissions make no application in respect of interest on the $450,000 legacy. She submits the interest accrued by the estate should be taken into account in relation to the question of costs. She seeks the payment of her own costs out of the estate on a solicitor-client basis up to the date of an offer of compromise which she made, being 8 October 2010, and on an indemnity basis thereafter. She relies on r 26.08(2) of the Supreme Court (General Civil Procedure) Rules2005 and submits the court should not make an order displacing the operation…

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: [2011] VSC 516
Decision Date: 19 October 2011

CaseChat Overview and Summary

In the case of Whitehead v State Trustees Limited (No 2), the dispute arose between the plaintiffs, the children of the deceased, and the defendant, the executor of the estate. The plaintiffs sought maintenance from the estate of their deceased father, which the executor had disputed. The case was heard in the Supreme Court. The legal issues before the court were whether the plaintiffs were entitled to costs in the amount of the court orders for provision, whether the executor had unreasonably rejected offers, whether the executor had a legitimate interest in defending the will and conducting a full forensic examination at trial, and whether the executor should be required to pay interest on the amounts ordered for provision.

The court found that the plaintiffs were entitled to the costs of the successful plaintiffs as the court orders for provision exceeded the offer of compromise and the Calderbank offer. The court also found that the executor had not unreasonably rejected the offers and had a legitimate interest in defending the will and conducting a full forensic examination at trial. The court noted that the value of the estate was not known until after trial and exceeded expectations. As for the costs of the unsuccessful defendant, the court found that the executor was not entitled to a standard order for indemnity costs out of the estate or on some lesser basis. The court also found that interest should be ordered on the amounts ordered for provision, starting from the date of judgment.

The final orders of the court were that the plaintiffs were entitled to the costs of the successful plaintiffs as the court orders for provision exceeded the offer of compromise and the Calderbank offer. The executor was not entitled to a standard order for indemnity costs out of the estate or on some lesser basis. Interest was to be ordered on the amounts ordered for provision, starting from the date of judgment. The executor was also ordered to pay interest on the amounts ordered for provision, starting from the date of judgment.

Orders