1 EM HEENAN J: In Hornsby v Hornsby [No 2]

Supreme Court of WA|2015-05-07|Before: Heenan J

1 EM HEENAN J: In Hornsby v Hornsby [No 2] [2014] WASC 434 I declared that the will of 1 December 2008 was the last will of the deceased, Colleen June Hornsby, and ordered that there be a grant of probate in solemn form of law in favour of the plaintiff, Sharon Judith Hornsby, the sole executrix named in that will. In doing so, I dismissed the counterclaim by the defendant, Craig Leonard Hornsby, the brother of the plaintiff, seeking to propound an earlier will of the deceased dated 28 July 1988.

2 When giving judgment in the action and on the counterclaim, I reserved the costs of the action and counterclaim. Later, lengthy written submissions were filed by the plaintiff and the defendant in relation to those costs and there was a further hearing of 12 February 2015 in which further oral submissions in relation to costs were advanced.

4 The consequence of the plaintiff recovering her costs of the action as part of the administration will, so I am assured by counsel on both sides, have the practical effect that there will be no funds left in the estate to pay the conditional legacy provided for in that will in favour of the defendant or to the other conditional legatees mentioned in cl 6 of the will nor will there be any residuary estate as a fund to meet claims by creditors, whether the defendant or otherwise. In short, the estate of the deceased remaining at her death and disposed of by will was too small to meet any award for costs which might be made in favour of the defendant. Not only this but the award of costs which it is anticipated will be made in favour of the plaintiff, let alone any order made in favour of the defendant, would produce insolvency for the estate so that even in the event of administration in insolvency with the plaintiff and the defendant ranking as creditors sharing rateably in the assets available for distribution, the amount available for distribution would be so small as to be of negligible significance. As a consequence of this situation, it was submitted that the contest over the claims for costs, in practical terms and impact, comes down to the question of whether the unsuccessful defendant should be ordered to pay any, and if so what, portion of the costs of the action and/or of his unsuccessful counterclaim.

5 These practical consequences come about because the judgment in the action suggests, but does not itself conclusively determine, that the inter vivos dispositions of land and other property by the deceased made by her in November and December 2008, at about the same time the last will was executed, were competent and effective dispositions of property. Their effectiveness and the competency of the deceased when entering into them was challenged in the related action CIV 1268 of 2011, which has not been heard or determined. However, the grounds upon which those inter vivos actions were challenged in that other litigation were, in many respects, similar, if not identical, to the challenges made to the competency and effectiveness of the deceased's will of 1 December 2008, which has been upheld and proved by this action. Those inter vivos dispositions had the effect of removing any significant assets of the estate so that even if her son, the defendant, did dispute the last will of 1 December 2008 or brought proceedings for greater provision for himself under the Family Provision Act 1972 (WA), those steps, even if successful, would be unavailing because all other significant assets had been disposed of before her death (see primary reasons). As I said in those reasons at [145]:

The effect of the inter vivos transactions was to dispose of, subject to one qualification, all her most valuable assets before death so that none would be a part of her estate. This would mean that any challenge to the efficacy or validity of her will of December 2008, even if successful, would be of little advantage to the challenger, clearly anticipated to be the defendant, because there would be little in the estate of major value by the time of her death. Similar observations apply in relation to any claim which might be made by her son under the provisions of the Family Provision Act 1972 (WA). The evidence discloses that the deceased clearly had in mind the possibility that her son might make a claim to her estate or against the validity of her will after her death and that these dispositions were measures which should result in any such claim, even if successful, being comparatively fruitless.

6 At the time of these applications for costs, action CIV 1268 of 2011 remained pending and with it the defendant's challenges to the validity and effectiveness of those inter vivos disposition of November and December 2008. The outcome of this present case implies that those challenges are unlikely to be successful but that is not a result which I consider I must or should assume. In the event, however unlikely, that that other action were to proceed and that the challenges to the inter vivos dispositions made by the deceased were to be successful, then the farm at Quinns and other assets held by Mrs Hornsby before November 2008 would remain part of her estate to be disposed of by the will that has now been proved. In that eventuality, there would be assets in the estate of significant value likely to be more than sufficient to meet the claims of creditors, including both the plaintiff and the defendant if orders for costs were to be made in this action in their favour for payment out of the estate. Accordingly, I consider that I should not simply proceed on the basis that there is no possibility that any order for costs made in favour of the defendant could ever be satisfied. That seems unlikely but, for the reasons given, I do not consider that it can or should be assumed.

7 Even if the inter vivos dispositions of property were entered into by the deceased, Colleen June Hornsby, at a time when she was of full mental capacity and without the transactions being susceptible to rescission or other orders to set them aside because of alleged undue influence, and unconscientious behaviour by others or any other vitiating factor, there remain two issues raised by the defendant which were not determined in these proceedings but which, if established, have the potential to affect the size of the estate. The first of these is the contention that the sale of the Wesfarmers shares by the deceased to the plaintiff was, at least nominally, for full consideration at the then market value of those shares resulting in a consequent liability by the plaintiff, as purchaser, to pay the sale price. The price for the sale of the 6,075 shares in Wesfarmers Ltd from the deceased to Sharon was set at $112,388 (exhibit 33 par [206] in the original reasons). According to the defendant, there was never any release or forgiveness of that debt by the deceased to her daughter, with the consequence that, if that be so, the plaintiff is indebted to the estate for the purchase price. If that were payable, there would then be a pool of some funds in the estate available to meet the claims of creditors, including any liability for costs.

8 Similarly, the defendant alleged in this action that the conditional sale of the farming property at Quinns to the plaintiff, Sharon Hornsby, and the associated gift of the proceeds of sale by the deed of release (the composite transaction referred to in par [231] of the original reasons) was not fully effected by the deceased during her lifetime because of the inability of the donor to deliver to the donee all the duplicate certificates of title necessary to effect the registration of that transfer. The defendant's submission was that the gift being left unperfected by the donor during her lifetime means that it fails because equity will not assist a volunteer. The consequence of all this, according to the defendant's submission, is that the Quinns farm remains the subject of a resulting trust for the benefit of the estate, notwithstanding that it is presently registered in the plaintiff's name. It was not necessary to determine that submission in this action. However, even if it were to be eventually established, it would mean that the disposition of the Quinns farm would, in that eventuality, pass to the Hornsby Farming Trust pursuant to cl 4 of the will of 1 December 2008 (the will proved) or, if for any reason that trust were not validly constituted so that that disposition failed, it would pass as part of the general residuary estate to the plaintiff under cl 8 of that will. In neither eventuality would the defendant be a beneficiary of his mother's estate, notwithstanding that he would be a potential discretionary beneficiary of the Hornsby Farming Trust settled on 26 November 2008: see reasons par [44]. Nevertheless, the possibility that the farm might be an asset of the estate, even if devised and bequeathed to others than the defendant, means that there is some potential for sufficient assets to exist in the estate to answer orders for costs which may be made against the estate.

9 These possibilities, however remote, are reasons for caution about accepting the apparent concessions by counsel that, after the plaintiff's costs as executor have been satisfied from the estate, there will be no assets available to meet any order for costs which might be made in favour of the defendant. While that appears to be the most likely consequence of the administration of this estate, I do not regard it as certain and I proceed on the basis that there remains a small possibility that there may be some assets in the estate available to meet any orders for costs which might be made as the defendant claims. In other words, I do not consider that I should proceed on any certain basis that there could never be assets in the estate available to meet the claims for costs presently being advanced by the defendant.

10 In the action I also concluded that both earlier wills of Mrs Hornsby, that is the will of 28 July 1988 and the will of 29 May 1996, were valid wills of the deceased when made but that the second revoked the first and the second was in turn revoked by the will of 1 December 2008, which was proved. The status of the will of 29 May 1996 was of importance because the defendant was contending, for reasons examined in the earlier judgment, that that will was invalid (along with the will of 1 December 2008) leaving the first will of 28 July 1988 appointing him as executor and principal beneficiary unrevoked. The plaintiff, on the other hand, was contending that the 1996 will was valid when made, so revoking the will of 1988 being propounded by the defendant in his counterclaim but itself had been revoked by the will of 1 December 2008. As an alternative, the plaintiff was propounding the will of 1996 for proof but only in the eventuality that it were found, for any reason, that the will of December 2008 was not valid. On those issues relating to the 1996 will, the plaintiff was substantially successful and the defendant unsuccessful.

General principles relating to any award of costs

11 As I observed in Daniels v Hall [No 2] at [10], the fundamental principle is that any award as to costs is in the discretion of the court. The general rule, subject to any express provisions of any statute or other rules of court, is prescribed, without limiting the general discretion conferred on the court by the Supreme Court Act 1935 (WA) s 37, by RSC O 66. It is that the court will generally order that the successful party to any action or matter should recover his costs. Order 66 r 9(2) provides that where a person has been a party to any proceedings in the capacity of trustee or personal representative he or she shall, unless the court otherwise orders, be entitled to the costs of those proceedings insofar as they are not recovered from or paid by any other person out of a fund held by the trustee or personal representative as the case may be, and that the court may otherwise order only on the ground that the trustee or personal representative has acted unreasonably or has in substance acted for his or her own benefit rather than for the benefit of the fund.

12 In Daniels v Hall, I also observed at [13] [24] that there were special features associated with litigation involving claims under the Family Provision Act which meant that inflexible application of the discretion to award costs in favour of the successful party or against an unsuccessful party should not be followed and that in such cases special considerations were important factors. There are, of course, differences between applications under the Family Provision Act and solemn form proceedings seeking the proof of a will of a deceased person or opposing the proof of some other will being propounded. Nevertheless, there are similarities including:

(a) A degree of restraint and tolerance is necessary in some cases if the court is asked to refuse or limit costs for an applicant, whether successful or unsuccessful, or to order that an applicant (including an unsuccessful counterclaiming applicant) to meet some or all of the costs of an unsuccessful application.

(b) If a party is successful in obtaining a grant of probate or letters of administration so as to become executor or administrator that party will, by that very process of litigation, have been engaged in performing part of the administration of the estate, and so usually will be entitled to his or her costs of the proceedings and on an indemnity basis - compare O 66 r 9(c).

(c) Other beneficiaries who appear in the proceedings (although not so represented in this case) particularly residuary beneficiaries have a potential interest under the will or wills propounded which they are entitled to seek to protect and, subject to reasonable conduct on their behalf and their avoidance of unnecessary duplication of representation and other expenses, should usually be entitled to their costs in the proceedings on a party/party basis, again regardless of the outcome.

13 Accordingly, the large variability and potential influence of these factors render it important that the court's general discretion over costs should be carefully determined and exercised rather than by adopting an approach merely following, without regard to the particular circumstances, general principles or practices.

14 These features have been recognised in many cases dealing with contested applications in the contentious probate jurisdiction. In Middlebrook v Middlebrook (1962) 36 ALJR 216 the High Court dismissed an appeal against a grant of probate by the court at first instance where there had been a challenge to that will by the deceased's son to the will of the deceased where the will had been made by the testator two days before his death in the late stages of an advanced illness. The judge at first instance had made an order for costs against the son essentially on the grounds that evidence led by the son at the trial from a nurse who had been attending the deceased on his deathbed to the effect that the testator lacked testamentary capacity had been rejected. The order of the High Court, while upholding the decision granting probate of that will, set aside the order for costs and in its place substituted an order that there should be no costs of the suit or of the appeal. The following passages demonstrate the approach taken by the Justices. Dixon CJ said (at 217):

I am not content, however, to uphold his Honour's order as to costs. His Honour ordered the caveator to pay the plaintiffs' costs of the suit. 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] VicLawRp 40; [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] VicLawRp 95; [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 President 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'. Spiers v English [1907] P 122, at p123. I think that the order appealed from should be varied accordingly.

15 McTiernan, Taylor, Menzies and Owen JJ also all agreed that the order for costs made by the trial judge should be varied and that there should be no costs of the suit although Menzies J alone took the view that the appellant should pay the cost of the appeal. In reaching the conclusions that the order of the trial judge as to the costs of the original suit should be set aside Menzies and Owen JJ added to the observations made by Dixon CJ. Each was of the view that the case then before the court was not one where there had been false or questionable evidence relied upon by the challenger in support of an allegation of undue influence. The situation was succinctly explained by Menzies J at 218 when his Honour said:

In ordering the defendant to pay the costs of the suit Myers J relied upon In Re Cutcliffe's Estate [1959] P 6, but that was a case where a plea of undue influence had been put forward supported by evidence of the defendants which had been rejected as an 'invention' and on this ground the defendants had been ordered to bear the costs. I think his Honour was wrong in thinking that his rejection of the evidence of Sister Mills brought this case within the scope of that authority...

16 In this present case there are both similarities and dissimilarities to the position examined by the court in Middlebrook v Middlebrook. The similarities are that the will which was eventually proved was made by Mrs Hornsby at a time when her fatal illness was well advanced, although she was not then hospitalised and survived for five months or so, was made without the benefit of direct legal advice and was in terms which overwhelmingly favoured the interests of her daughter largely to the exclusion of those of her son. The dissimilarities are that in opposing the application for probate of that will, and also of an earlier will made some 12 years before, the defendant advanced a case of lack of testamentary capacity without any evidence at all of mental incapacity or want of understanding by his mother when either will was made and, further, by alleging undue influence upon the deceased by both his sister and by his mother's accountant who took instructions for and arranged the preparation and execution of both wills. The defendant seeks to emphasise, however, that lack of testamentary capacity can be established independently of any mental illness or lack of understanding if, by reason of the circumstances, the testator was not aware of, or failed to give consideration to, the nature and extent of the estate which she was able to and did dispose of by will and/or to a recognition of those members of the family whom she could be expected to consider for benefit when making her will.

17 At the trial itself, as opposed to the case pleaded by the defendant in his defence and in support of his counterclaim, no attempt was made to support the claim for undue influence against his sister, the plaintiff. Apart from a very perfunctory attempt, based on nothing more than more substantial than a nurse's note in the hospital records, unsupported by any evidence from the nurse herself, no attack was made on the mental health or cognitive capacity of the deceased. The allegations of undue influence and unconscionable conduct were, however, strongly pursued against the accountant but only by the lengthy crossexamination of her at trial.

18 Some of these considerations were present in Re Green deceased; Lloyd v Green [1969] WAR 67 where the defendants unsuccessfully sought to propound an earlier will of the deceased opposing probate of a later will. They allege that the testator was not of sound disposing mind at the time the later will was made. The principal allegation of the defendants in their opposition was that the deceased had suffered a delusion that he had given away large sums of money to his children during his lifetime. It was held that there was never any reasonable foundation for that allegation. Wolff CJ concluded that he would not feel justified in ordering the defendant's costs to be paid out of the estate because they failed to sustain the issue which they had raised. The Chief Justice decided, in the exercise of his discretion, to make no order as to costs against the defendants. The learned Chief Justice said (at page 83):

The general rule in probate actions is that the costs follow the event: Twist v Tye [1902] P 92; Spiers v English [1907] P 122. There are two types of case where the general rule may be departed from: (1) Where the litigation has been brought about through the conduct of the testator; and (2) where the parties who have failed have reasonably been led into litigation by bona fide belief in their case and had, therefore, felt it desirable to inquire into the testamentary dispositions of the testator: Twist v Tye, supra, per Gorell Barnes J at page 94.

19 From the two categories of cases justifying departure from the general rule as to costs which had been identified by Wolff CJ in Re Green deceased the learned authors of Law of Succession (Lexus Nexus, Butterworths) (2013) Professors Dal Pont and Mackie at [23.5] deduce three general rules which they identify as being neither exhaustive nor rigidly prescriptive in these terms.

(i) Where the opposition to a will was made without proper inquiry into the facts, or without reasonable grounds so as to make it unjustifiable opposition, a costs order lies against the party opposing the will - Wilson v Jones [1911] HCA 11; (1911) 12 CLR 394, 397 - 398 (Griffiths CJ); Re Egel [1939] SAStRp 57; [1939] SASR 477, 481 and Middlebrook.

(ii) Where the testator has, by his or her own conduct, in effect caused the litigation, the costs of the unsuccessful party are to be paid out of the testator's estate Oreski v Ikac [2007] WASC 195 (S) affirmed [2008] WASCA 220.

(iii) If the facts reveal that neither the testator, the executor or persons interested in the residue have been to blame, but the opponents of the will have taken proper steps to acquaint themselves of the facts and have been led reasonably to the bona fide belief that good ground existed for impeaching the will, either no order as to costs would be made - Spiers v English [1907] P 122 or costs will be allowed, whether wholly or partly, out of the estate - Rowland v Portus [1906] NSWStRp 1; (1906) 6 SR (NSW) 74, 76 (Walker J).

20 The plaintiff seeks an order that the defendant pay her costs of the action, of his counterclaim and the costs of and incidental to the original noncontentious application of probate and that those costs be taxed on an indemnity basis. Alternatively, the plaintiff seeks a special order for her costs pursuant to s 280(1) of the Legal Profession Act 2008 (WA) and an order that the defendant bear his own costs of the action and of his counterclaim.

21 The principal ground for seeking these orders is the submission that the defendant unreasonably opposed proof of the last of his mother's wills and did so without proper inquiry into the facts and without reasonable grounds. This submission is supported by the further contention that, having unsuccessfully made an allegation for undue influence, the defendant should be ordered to pay the costs of the action even where there were circumstances warranting the investigation of execution, knowledge, approval and capacity Re Cuthbert's Estate; Becker v Public Trustee of NSW [2006] NSWSC 1146. Further, the plaintiff submits that an award of indemnity costs is open where litigation has been commenced or continued in circumstances where the party, properly advised, should have known that he had no chance of success: ColgatePalmolive Co v Cussons Pty Ltd [1993] FCA 536; (1993) 46 FCR 225, 233. As for the plaintiff's application for special costs order under s 280(1) of the Legal Profession Act the plaintiff relies on the principle summarised by Edelman J in Crawley Investments v Elman [2014] WASC 233 [5] and by Kenneth Martin J in Marsh v Baxter [2014] WASC 187 (S) [8] [12]. As to the latter case I simply note, without comment that the decision in Marsh v Baxter is currently under appeal and because of that and because of the unusual circumstances of that litigation, of a kind quite different to contested probate claims, I do not consider that I should rely upon it on this occasion.

22 The defendant refers to the exceptions to the event rule recognised in Middlebrook v Middlebrook, Re Green deceased, and also in Clay v Karlson [2001] WASC 141 [147] and submits that he had reasonably been led into this litigation by a bona fide belief in his case and has therefore felt that it was desirable to enquire into the testamentary dispositions of his mother and as a consequence should be relieved of his burden as to costs to the extent that there should be no order that pay the plaintiff's costs.

23 As to the plaintiff's submissions that the defendant, having an advanced an unsuccessful claim for undue influence, should be ordered to pay the costs associated with that claim, the defendant submits that an unsuccessful claim of undue influence is not of itself a basis for excluding the party making the allegation from the second exception Re Herbert (1990) 101 FLR 279, 303, 311 313 applying Mitchel v Gard (1863) 164 ER 1280, 1281.

24 I accept that there were circumstances in the present case which called for a vigilant examination of circumstances leading to Mrs Hornsby making and executing her wills of 29 May 1996 and of 1 December 2008 and that the validity of either will could not be presumed simply from evidence of due execution and of apparent capacity by the testatrix. The reasons for that conclusion have been set out extensively in the reasons for judgment in the case itself. Consequently, I consider that there were grounds which warranted the plaintiff being required to prove her mother's last will in solemn form and that the defendant was justified in requiring strict proof of his mother's testamentary capacity, due execution and to examine the circumstances which led to the execution of the wills of 1996 and 2008.

25 From the defendant's point of view, of course, it was not sufficient merely to challenge the will of December 2008 because he was seeking, by his counterclaim, to propound the will of 1988 which had the most favourable dispositions to him. Hence, he needed to prove that the 1996 will was invalid and therefore had not revoked the will which he was propounding.

26 Had the defendant simply required strict proof of the 2008 will and in doing so availed himself of the opportunity to raise issues of lack of testamentary capacity or even undue influence or unconscionability having regard to the circumstances under which that will was made and the contemporaneity of the inter vivos dispositions I would have had little hesitation in concluding that there were grounds for him to require that degree of scrutiny without being liable in costs should that last will be proved.

27 The real issue, so it seems, is whether the defendant's challenge to the 1996 will, on similar but not identical grounds and his counterclaim propounding the 1988 will made before the controversies between himself and his mother and the litigation in 1994 over the Lakeview farm constituted 'a bridge too far'.

28 Although the 1996 will was also made without Mrs Hornsby obtaining direct legal advice and when its effect was to diminish very greatly dispositions in favour of the defendant or his family, there were far fewer grounds for impeaching it. Mrs Hornsby had not then been diagnosed with her fatal illness and, to all appearances, was in good robust health in 1996. There were no contemporaneous inter vivos dispositions of property indicating any desire to put her assets beyond the reach of her son during her lifetime and there was no evidence at all of any involvement or knowledge by the plaintiff, Ms Sharon Hornsby, of the making of this will or even its existence. The case for undue influence or unconscionable conduct by the accountant was weak arising from little more than a perceived lack of sympathy entertained by the defendant against the role of the advising accountant, Ms Keilor, arising from protracted negotiations and disputes about the financial provisions made by Mrs Hornsby to her son in relation to his decision to acquire a farm at Denmark and to disengage from his involvement in Quinns Farm.

29 Comparatively little time and effort was taken in investigating and proving the circumstances of the execution of the 1988 will which was propounded by the defendant in his counterclaim notwithstanding that the original had been lost or destroyed. There is really no controversy about the due execution and validity of that will. Rather the only question whether it was revoked by either the 1996 or 2008 will. I do not consider that, in all the circumstances, that the discretionary decision about the award of costs should turn upon the efforts of the defendant to prove that will as distinct from his efforts to oppose proof of either of the later wills.

30 As for the plaintiff's submission that an order should be made in her favour for the costs of the noncontentious application to prove the 2008 will and that the defendant should be ordered to pay those costs either on an indemnity basis or as the subject of a special costs order pursuant to s 280(1) of the Legal Profession Act I can only say that the costs of that noncontentious application, which never proceeded, are not costs in the present proceedings. This is a separate action and associated counterclaim made necessary because the noncontentious proceedings revealed that proof in solemn form was required. The attempt to obtain a grant in the noncontentious proceedings was, I accept, a legitimate part of the plaintiff's role as an executor seeking a grant as part of her duty to pursue due administration of the estate. As such, those costs will be recoverable as part of the administration of the estate but they do not form any part of the costs of this present action or counterclaim.

31 I consider that, in some respects, the challenges by the defendant to his mother's wills of 1996 and 2008 were, so far as they alleged undue influence, unconscionable conduct and to the extent that they did, as I am satisfied they did despite the defendant's submissions, challenge the deceased's mental and cognitive capacities, went considerably beyond any evidence adduced, whether in chief or by cross-examination, to support them. Those challenges did expand and extend both the preparation for and the conduct of the trial.

32 However, it is difficult and somewhat artificial to attempt to dissect the preparation for and the conduct of this trial into separate issues each with their finite limits in order to attempt some apportionment of the costs or to identify some particular issue or issues upon which the defendant should be liable for costs. Difficult and artificial while it would be to attempt to categorise any such subdivisions, the complexity would inevitably become compounded if, by doing so, it became necessary to tax costs and apportion claims for costs as a result of some such categorisation. Rather, I consider that it is more realistic and a better recognition of the true contest between the parties to acknowledge that, for reasons which were given in the decision itself, this was a case where full scrutiny of the will or wills being propounded by the plaintiff for probate was not only justifiable but necessary.

33 That conclusion will not allow this case to be fitted neatly into any of the categories identified in Re Green as being the types of cases where the general rule that costs should follow the event may be departed from. Rather, it shows that those categories are indeed neither exhaustive nor rigidly prescriptive and that every case must be examined according to its own circumstances.

34 This is not a case where it can be said, with any real justification, that the litigation has been brought about by the conduct of the testator. Nor can it be said that, by careful examination of the facts available at the early stages of litigation, the defendant had been led to a reasonable and bona fide belief that he had reasonable grounds for his claims. Rather, and unfortunately, this appears to be a case where there was longstanding distrust and resentment by the defendant towards his mother, resulting in disapproval, reserve and anxiety about him by his mother, leading her to a reasonable belief that testamentary or other dispositions of her property which, if made, would be challenged after her death by her son. This led her to be somewhat secretive in her dealings and in her testamentary dispositions generally both in 1996 and, when she recognised in 2008 that her death was imminent, more selectively to the exclusion of her son. The steps which she then took, believing them to be necessary, were very specific and unusual notwithstanding that they were all decisions which she was legally entitled to make.

35 In that situation I consider that it is not at all unreasonable for the defendant to harbour suspicions about whether or not his mother voluntarily and independently determined upon the course of events which she undertook in November/December 2008 and to require proof of the 2008 will in the strictest form. Once that decision was taken, and there were plausible grounds for it to be taken, similar reasons, but with less force or reason, led to the challenge being made to the 1996 will because it was only if that testament could successfully be refuted that any significant benefit could be achieved by the defendant by proving the 1988 will.

36 I must confess to reservations as to whether or not the challenge to the 1996 will and the counterclaim propounding the 1988 will were justifiable on objective standards from the standpoint of a reasonably well informed and advised litigant in possession of the facts known at the date of the commencement of these proceedings. However, this appears to be a matter upon which there is scope for reasonable differences of opinion and I do not think that it would be proper, in the exercise of a discretion such as this, to reach a conclusion with substantially adverse consequences on an issue so finely balanced. It is better, I consider, to treat this as an occasion when a substantial challenge to the deceased's 2008 will was justifiable and, once that is acknowledged, to realise that the challenge would inevitably bring with it a scrutiny of earlier wills, going back to the time when the deceased and the defendant were unhappily joined together in litigation arising from a leasehold dispute over the Lakeview farm.

37 I do not consider that a trial limited to the validity of the 2008 will would have avoided scrutiny of that earlier family history, nor examinations of earlier wills made by the deceased. So a search for savings in time and effort if this trial had been confined to issues dealing with the 2008 will alone would be unlikely to return much in the way of economy.

38 In the circumstances, therefore, I consider that there should be no order against the defendant requiring him to pay costs of the proceedings, except for such interlocutory orders for costs which have already been made. Should any party wish to pursue the matter, where costs of interlocutory applications have been reserved, in the absence of agreement, there can be liberty to apply.

39 By reason of her success in the action and in the successful defence of the counterclaim, the plaintiff should have her costs of the action and the counterclaim. Her role as executor seeking to prove the 2008 will which she has successfully accomplished provides a further reason for that. This means that, in the absence of unreasonable conduct of the litigation on her behalf, the plaintiff should recover her costs of the litigation on an indemnity basis - RSC O 66 r 9(2). No such allegation has been made against the plaintiff in relation to this costs application and, accordingly, she should have her costs of the action and the counterclaim, including any costs already awarded in her favour on interlocutory applications on an indemnity basis.

40 Despite the complexity and length of this litigation, I do not consider that this is an occasion for a special order as to costs other than to provide that the taxing officer may, at his or her discretion, increase the limit on any individual item or allowance in any applicable scale of costs so as to allow reasonable costs for work properly done.

41 The various inter vivos dispositions of property by Mrs Hornsby in November and December of 2008 and the challenges to them were highlighted by the defendant in support of his case against the validity of his mother's 2008 will. They were extensively canvassed in evidence and were the subject of lengthy submissions at trial and in the earlier reasons for decision. Yet, for reasons there explained, no decision on their validity was possible or was sought in these proceedings. However, all those inter vivos transactions were separately challenged in the other action, CIV 1268 of 2011, which was separated from these present proceedings by my decision of 20 June 2014.

42 Since these present applications for costs were heard that other action has been discontinued by Mr Craig Hornsby and that has resulted in an order made that he should pay the costs of that action to be taxed. Those costs will, necessarily, include costs in relation to the pleadings and other applications relating to the inter vivos transactions in CIV 1268 of 2011. However, because the same or similar issues arose in the present action, there will obviously be scope for controversy as to whether or not, and if so the extent to which, Mr Craig Hornsby should be required to pay costs relating to the inter vivos transactions in connection with CIV 1268 of 2011 where there has been no order for costs against him is made in this action.

43 Again, taking a broad view, I consider that work relating to the investigation of each of the inter vivos transactions and preparing for a trial of those issues should be regarded as part of the costs in this present action as they were, to a material degree, relevant to issues associated with the validity of the 2008 will. However, if there was duplication of that work, for example, by pleadings or other process in CIV 1268 of 2011, then any such duplication or repetition should be part of the costs in that action payable by Mr Craig Hornsby. Liberty to apply in relation to such matters of costs in CIV 1268 of 2011 was granted in the order recording that that action had been discontinued and that the costs of it were payable by Mr Craig Hornsby. Subject to any submissions by the parties pursuant to that liberty to apply, I would, at least on a provisional basis, be inclined to direct that the costs of work associated with the inter vivos dispositions in that action should be dealt with in the manner I have just outlined.

Family Provision Act 1972(WA)

At a glance

Court

Decision date

Before

Source

Judgment (54 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (4)