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[2001] WASC 141
Supreme Court of WA
2001-06-05
Windeyer J, Chesterman J, Santow J, Walsh J, Doyle J
Original judgment source is linked above.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION : CLAY -v- KARLSON & ANOR [2001] WASC 141
Costs - Probate action - Application for revocation of probate of codicil - Extensive interlocutory applications
The plaintiff to pay the second defendant's costs of the claim and counterclaim (including reserved costs) to be taxed as between party and party
For the purposes of the taxation the limits in the Fourth Schedule to the Rules of the Supreme Court be removed
Ajili v Dinica Popp, unreported; SCt of NSW (Windeyer J); 19 December 1995
Bailey v Bailey [1924] HCA 21; (1924) 34 CLR 558
Ball v Fulton [1942] HCA 13; (1942) 66 CLR 295
Banks v Goodfellow [1870] 5 QB 549
Barry v Butlin [1838] EngR 1056; (1838) 2 Moo PCC 480
Beim v Alldrift, unreported; SCt of Qld (Chesterman J); 19 June 1998
Boreham v Prince Henry Hospital (1955) 29 ALJR 179
Collins v May [2000] WASC 29
Dufaur v Croft [1840] EngR 423; (1840) 3 Moo PC 136
In the Will of Wilson (1897) 23 VLR 197
Lloyd v Green [1969] WAR 67
Oakes v Uzzell [1932] P 19
Pates v Craig, unreported; SCt of NSW (Santow J); 106306/94; 28 August 1995
R v Levy [1953] VicLawRp 87; [1953] VLR 652
Raven v Rodgers, unreported; SCt of WA (Walsh J); Library No 8674; 20 December 1990
Re Hodges; Shorter v Hodges (1988) 14 NSWLR 698
Re McCaffrey [1938] SASR 403
Re Simpson (1977) 121 Sol Jo 224
Re Stott (deceased) [1980] 1 All ER 259
Robins v National Trust Co Ltd [1927] AC 515
Roos v Karpenkow, unreported; SCt of SA (Doyle J); 21 July 1998
Shama Curn Kundu v Khettromoni Dasi (1899) LR 27 Ind A 10
Shaw & Anor v Crichton, unreported; SCt of NSW (CA); 113127/92; 23 August 1995
Sinnamon & Ors v Proe [1996] QSC 164
Timbury v Coffee [1941] HCA 22; (1941) 66 CLR 277
West Australian Trustee Executor and Agency Company Limited v Holmes [1961] WAR 144
Will of Ryan: Williams v Ryan [1998] VSC 60
Wintle v Nye [1959] 1 All ER 552
1 ROBERTS-SMITH J: This matter has had a long and tortuous history. It involves a deceased testator who in his elderly years of declining health, formed a relationship with a lady who had separated from her husband and who later moved in with the testator, a will executed by the testator on 25 July 1987 ("the 1987 will") in which he left legacies of $100,000 each to his two nephews and his elderly sister, a codicil executed on 30 November 1988 ("the codicil") in which he reduced the $100,000 legacies to his nephews to $50,000 and omitted his sister altogether (thereby increasing the residue left to the second defendant) and substantial gifts and transfers of property from the testator to the second defendant from about 1982 until he died on 24 January 1995.
2 The plaintiff is one of those two nephews of Alfred Clay the deceased testator. The deceased has been referred to by all parties throughout the proceedings as Alf and for consistency and without intending any disrespect I will so refer to him in these reasons.
3 The plaintiff is a solicitor and has been acting for himself throughout the proceedings.
4 The action began on 10 December 1996 when the plaintiff filed a writ of summons with an indorsement of claim seeking a decree pursuant to O 73 of the Rules of the Supreme Court pronouncing for or against the validity of what was described as the alleged will and the alleged codicil of Alf in respect of which probate had been granted under the Non-contentious Probate Rules. The first and second defendants are the executors of Alf's will. The second defendant is also the beneficiary of the residue of his estate. The first defendant did not file an appearance. The second defendant did file an appearance and the action has continued throughout as one between the plaintiff and the second defendant.
5 The case came on for hearing before me on 19 March 2001. It had been listed for hearing for five days, of which approximately four were occupied by cross-examination of the second defendant. Just before the hearing commenced on the morning of the fifth day, the plaintiff presented a document entitled "Amended Outline of Submissions for Trial" in which he effectively conceded the case and supported a grant of probate of the will and codicil in solemn form. He then made submissions that I exercise my discretion on costs only to the extent of ordering him to pay half the second defendant's costs to be taxed.
2. there be judgment for the second defendant on the counterclaim;
3. there be a pronouncement and grant of probate in solemn form of the will and codicil of the late Alfred Clay dated 25 July 1987 and 22 November 1988 respectively to the executors, the first and second defendants herein.
7 The question of costs was reserved for further argument that afternoon and following that I reserved my decision on that aspect.
8 This judgment is accordingly one as to costs only.
9 An amended writ was issued on 23 December 1996. The amendment was to the indorsement of claim to which were added paragraphs seeking an account of Alf's assets at the date of the alleged will, the date of the alleged codicil and at 24 January 1995 respectively.
10 By statement of claim filed the same date the plaintiff pleaded that the alleged codicil was prepared by Messrs Gibson & Gibson, solicitors acting for and on instructions from the second defendant and without contact with Alf prior to execution. It pleaded further that she was the residuary beneficiary and the person benefited by the amendments to the alleged will effected by the alleged codicil. The plaintiff pleaded that he required the defendants to prove that at the date of the alleged will and codicil respectively, Alf was of sound mind, memory and understanding, including that he knew and understood the nature and extent of the assets he owned and was disposing of and knew and approved of the contents of the alleged testamentary instrument.
11 There were further minor amendments to the statement of claim on 15 January 1997. On 16 January that year the second defendant filed a chamber summons to strike out the amended statement of claim.
12 On 10 February 1997 the plaintiff filed a further re-amended statement of claim, essentially adding paragraphs to the effect that the plaintiff did not admit that at the date the will or codicil were executed, Alf was of sound mind, memory and understanding and knew and approved of the contents of the will or codicil respectively.
13 Various case management directions were made at various times while these other interlocutory proceedings were going on.
14 On 27 March 1997 the plaintiff took out a chamber summons for injunctions against the solicitors for the second defendant (who were at that stage Messrs Gibson & Gibson) seeking a mandatory injunction that the firm cease to act for the second defendant and take steps to remove themselves from the record. That application came before Templeman J on 6 May 1997 when it was adjourned sine die with costs in the cause.
15 On 14 April 1997, Acting Master Chapman ordered that the amended statement of claim dated 15 January 1997 be struck out in its entirety on the ground it disclosed no reasonable cause of action. Leave was granted to the plaintiff to file and serve an application to further amend the statement of claim. There was no order as to costs.
16 Leave to amend was given by Master Ng on 7 July 1997. Costs were ordered to be in the cause. The statement of claim so amended was dated 14 May 1997 and was in the following terms:
"1 Alfred Clay ('Alf') died on 24 January 1995.
2 On 16 March 1995, Alf's alleged will dated 25 July 1987 and alleged codicil dated 30 November 1988 were proved under the provisions of the Non-Contentious Probate Rules.
3 Probate of the will and alleged codicil was awarded to the Defendants, the executors named in the will.
4 The alleged codicil was prepared by Messrs Gibson & Gibson, solicitors acting for and on instructions from the Second Defendant. Messrs Gibson & Gibson prepared the alleged codicil without contact with Alf prior to the execution of the alleged codicil.
5 The Second Defendant is the residuary beneficiary and the person benefited by the amendments to the alleged will effected by the alleged codicil.
6 The Plaintiff is a legatee of the alleged will and codicil and a nephew of Alf.
7 At the date of execution of the alleged codicil, Alf Clay was not of sound mind, memory and understanding.
Particulars
7.1 At the date the alleged codicil was executed Alf:
(a) was of or about 75 years of age and had suffered several strokes affecting his mind, memory and communication skills and his ability to care for himself and look after his own financial and personal affairs;
(b) was unable to care for himself or look after his own financial and personal affairs;
(c) relied on the Second Defendant to care for him and to manage all his financial and personal affairs;
(d) was reliant on the Second Defendant for knowledge of his financial position and interests.
7.2 The Second Defendant, by reason that she was the residuary beneficiary under the will, was the sole person benefited by reason of the execution of the alleged codicil.
7.3 The alleged codicil was prepared by Messrs Gibson & Gibson, solicitors acting on instructions from the Second Defendant.
7.4 Messrs Gibson & Gibson prepared the alleged codicil without contact with Alf prior to the execution of the alleged codicil.
7.5 Messrs Gibson & Gibson were not Alf's usual solicitors and had never acted for him previously.
7.6 No medical practitioner was present at the time of execution of the alleged codicil.
7.7 Alf received no independent legal advice as to the alleged codicil.
7.8 Alf received no independent financial advice as to the nature or extent of his estate or of the nature or extent of the benefits which the Second Defendant had obtained, was obtaining from his estate or would obtain from under the alleged codicil.
7.9 Further particulars may be provided after discovery and interrogatories.
7.10 The Plaintiff puts the Defendants to proof that Alf was of sound mind, memory and understanding - including proof that Alf knew and understood the nature and extent of the assets Alf owned and was disposing of - at the date of execution of the said codicil.
8 At the date of the execution of the alleged codicil, Alf Clay did not know and approve of the contents of the will and alleged codicil.
Particulars
8.1 The plaintiff repeats the particulars at paragraph 7.1 to 7.8.
8.2 The Plaintiff puts the Defendants to proof that Alf Clay knew and approved of the contents of the will and alleged codicil at the date the alleged codicil was executed.
9 In the premises the Plaintiff puts the Defendants to proof that, at the date the alleged codicil was executed, Alf:
(a) was of sound mind, memory and understanding - including proof that Alf knew and understood the nature and extent of the assets Alf owned and was disposing of - and
(b) knew and approved of the will and alleged codicil.
1 Revocation of the grant of probate in common form of law.
2 Decrees pursuant to O 73 of the Supreme Court Rules:
(a) pronouncing for the will of Alfred Clay (deceased) ('Alf") dated 25 July 1987 in solemn form of law, and
(b) pronouncing against the validity of the alleged codicil of Alf dated 30 November 1988.
3 An account of Alf's assets at the date of the alleged will.
4 An account of Alf's assets at the date of the alleged codicil.
5 An account of Alf's assets as at 24 January 1995."
17 The second defendant filed a defence to that statement of claim on 10 July 1997. Gibson & Gibson were still acting.
18 On 23 July 1997 the second defendant filed a request for discovery and a notice to produce, and on 31 July 1997 filed an affidavit by the second defendant verifying her list of documents. That disclosed only copies of the will, codicil, a grant of probate and court documentation common to the parties.
19 On 28 August 1997 Templeman J heard the plaintiff's application for an injunction to restrain Gibson & Gibson from acting. He delivered ex tempore reasons subsequently published Clay v Karlson & Anor, unreported; SCt of WA; Library No 970446; 28 August 1997. His Honour concluded that Gibson & Gibson should not act for the second defendant in the circumstances and that the court had power to order them to remove themselves from the record. The application was adjourned sine die on an undertaking by Gibson & Gibson to remove themselves from the record and have other solicitors appointed for the second defendant within seven days. The second defendant was ordered to pay the plaintiff's expenses of the application. In accordance with the undertaking, Gibson & Gibson were replaced on the record as the second defendant's solicitors by Lawton Gillon Tydde on 18 September 1997.
20 On 24 September 1997 the plaintiff filed a request for further and better particulars of the defence. Further case management directions were subsequently given. There were applications by the second defendant to amend and further amend her defence. These were dealt with and other consequential directions were given by Master Sanderson on 13 August 1998, the expenses (including reserved expenses) to be the plaintiff's in any event.
21 There were further appearances on 21 October and 10 November 1998. On the latter date, Master Bredmeyer ordered the plaintiff to answer the second defendant's request for further and better particulars of claim within 14-days and ordered the plaintiff to pay 3/4's of the second defendant's costs. This related in part to an affidavit of the second defendant filed on 28 November 1997 verifying a supplementary list of documents in which was set out a list of some 46 categories of documents relating to Alf's affairs, including cheque butts, deposit books, bank statements, personal correspondence, income tax returns and accounts.
22 On 10 February 1998, Master Bredmeyer gave the plaintiff leave to file an amended statement of claim and ordered the plaintiff to file and serve further and better particulars within 14 days.
23 By 10 March 1998 the plaintiff had made five separate requests that the second defendant provide further and better particulars of her defence. They eventually came before Master Sanderson by way of a chambers summons on that date. The Master handed down judgment on the plaintiff's application on 17 March 1998: Clay v Karlson, unreported; SCt of WA; Library No 980118; 17 March 1998. The issue concerned pleadings by the second defendant whereby she merely denied each and every allegation in specified paragraphs of the statement of claim as if they were set out in the defence and traversed seriatim. These were, in particular, the plaintiff's pleadings that Alf did not know and approve the contents of the will and codicil. The second defendant's pleading therefore involved a double negative, and the question was whether she was thereby setting up a positive case of which particulars should be ordered. The learned Master held that was so, and ordered the second defendant to give particulars. He further ordered that the second defendant have leave to amend certain paragraphs of her defence within seven days and if no amendment be made, then to provide further and better particulars. He ordered the expenses and disbursements of the plaintiff be paid by the second defendant in any event.
24 On 25 March 1998 a notice of change of solicitors was filed advising that Julian Tydde now acted for the second defendant in place of Lawton Gillon Tydde.
25 A minute of amended defence pursuant to the order of Master Sanderson was filed on 25 March 1998.
"4.1 denies that the 'alleged' Codicil was prepared by Messrs Gibson & Gibson, and says that the Codicil was prepared by Messrs Gibson & Gibson on instructions from ALF CLAY ('Alf') and after contact with Alf before execution.
Particulars
Prior to 30 November 1988, Alf expressed a wish to change his Will. He had the changes he wanted to his Will typed and gave a typed note of the changes to the second defendant and he instructed her to take it to a solicitor to have a new Will prepared.
On behalf of Alf and pursuant to his direction the second defendant contacted Messrs Gibson & Gibson and passed on Alf's instructions to that firm.
Messrs Gibson & Gibson wrote a letter to Alf on 30 November 1988 advising him that a Codicil had been prepared for his consideration. The letter stated that the effect of the Codicil was to modify clause 3 of Alf's present Will by removing MARY GLADYS WHITING as the beneficiary by reducing to $50,000 the sum to be paid to each of MARK GREGORY CLAY and PAUL JAMES CLAY, by removing ELAINE FRANCES OLDHAM and PAMELA CASTELLE ROELOFSEN as beneficiaries and by expressing Alf's wish that he be cremated at a private ceremony. The letter stated that if the terms of the draft Codicil were acceptable to Alf, Messrs Gibson & Gibson would arrange for a member of its staff to attend at his home at his convenience in order to act as one of the two independent witnesses required to the execution of the Codicil. Messrs Gibson & Gibson returned Alf's Will dated the 25th July 1987.
On the 30th November 1988, Mr Anthony Elliott, a lawyer, employed by Messrs Gibson & Gibson, attended Alf at his unit at Unit 2, 22 Avonmore Terrace, Cottesloe.
After speaking with Alf on his own on the above date at the above address, the Codicil was executed by Alf and witnessed by Mr Elliott and another adult person. There was no medical practitioner present nor necessary at the time of execution of the Codicil.
In speaking with Alf alone, Mr Elliott sought to ensure that the contents of the Codicil truly represented Alf's testamentary intention. Mr Elliott asked Alf whether he appreciated that whilst the three named beneficiaries in his former Will did stand to receive $100,000 each, the Codicil gave simply two beneficiaries $50,000 each and whether he appreciated that the Codicil also reduced the beneficiaries of $10,000 bequests to one only and that two other named beneficiaries would receive nothing. Again he responded 'yes'. Mr Elliott pressed him and asked did he comprehend that his residuary beneficiary would therefore receive an additional $220,000 and he once more replied 'yes'. Alf's answers were given promptly. His voice was not strong. His answers were clear. Although there was a tremor in his voice this was consistent throughout and his answers were given in his normal voice being a voice affected by age. Mr Elliott called the other witnesses into the room once more and asked Alf whether he had read the Codicil and whether it represented his testamentary intentions. In Mr Elliott's presence and in the presence of the other witness he replied 'yes'. Mr Elliott then asked Alf to sign and date the Codicil. He signed the Codicil in the presence of Mr Elliott and the other witness. Alf signed with his left hand. His signature was most shaky. Mr Elliott then asked Alf to date the operative part of the Codicil which he did. In the first space he wrote '30th'. Because of the nature of his writing he wrote 'NOV' in the second space.
Thereafter Dudley Morrison Mackey, Retired of 5/22 Avonmore Terrace, Cottesloe, 6011, WA subscribed his signature, name, occupation and address to the Codicil. Mr Elliott then subscribed his signature followed by his full name, address and occupation. Mr Elliott then endorsed the date on the front page of the Codicil namely 30th November 1988.
Mr Elliott returned the Codicil to Alf and suggested to him that he keep it with his original Will and other important papers. Once more he responded 'yes'. Mr Elliott then explained to him that if he wished to alter his Will again, he would be obliged to execute a new Will or a further Codicil. Mr Elliott also told him that if he wished to revoke the Will and Codicil he could do so by destroying and obliterating the writing completely. Mr Elliott told him that he could cut the instruments into small pieces and burn them and that would be sufficient. Alf then nodded to signify that he understood.
The second defendant does not know whether or not Alf took other legal or financial advice as to the Codicil but says such advice would not have been necessary as Alf was of sound mind, memory and understanding at the time of execution of the Codicil."
27 This was clearly not a proper pleading. It was dealt with by Master Sanderson on 13 August 1998 and other procedural orders were made as to requests for particulars and interrogatories. Again, the Master ordered that the expenses be those of the plaintiff in any event.
28 On 8 April 1998 the plaintiff filed a request for further and better particulars of the amended defence.
29 The feature of constant interlocutory proceedings continued. The amended defence was in due course further amended by deletion of par 4.1 (inter alia). There were applications for further and better particulars on both sides. Some were allowed and some were not. Master Bredmeyer delivered further written reasons on such an application on 10 November 1998: Clay v Karlson, unreported; SCt of WA; Library No 980661; 10 November 1998 in which he ordered the costs of the combined applications be awarded to the second defendant against the plaintiff on a 3/4 basis in any event, and again on 10 February 1999: Clay v Karlson, unreported; SCt of WA; Library No No 990046; 10 February 1999 in which he ordered the plaintiff to give the second defendant further and better particulars of his amended statement of claim (which by then had been amended to 16 December 1998).
30 By chamber summons dated 15 April 1999, the second defendant sought a number of orders, including that the plaintiff provide further and better particulars, that certain answers to requests for particulars be filed on 8 March 1999 (alleging in part forgery of Alf's signature on a property transfer, amongst other things) be struck out as inter alia an abuse of process, prejudicial and embarrassing, scandalous and irrelevant, and defective for want of particularising an issue of fraud or illegality. She also sought an order that an application for further discovery filed by the plaintiff on 29 April 1999 be dismissed. That last application contained a list of documents over some eight pages encompassing a multitude of transactions, including a payment of $300,000 to the second defendant on 28 December 1990, documents evidencing purchases of chattels paid for out of Alf's accounts between 1 July 1987 and the date of his death, and going to (or seeking) great detail (eg purchase of photos for $17.95 on a specific date), the second defendant's tax records, details of transfer of property and documents evidencing ownership, accounts for rates, taxes and improvements, and under a heading 'Misappropriation of Funds", another long list of wide categories of documents and accounts both generally and in relation to specific transactions, including both minor and major amounts. This was supported by a 78-page affidavit (including attachments) of the plaintiff dated 29 April 1999.
31 Annexure MGC.2 to that affidavit purported to be a balance sheet as at the date of Alf's death reflecting all transactions recorded between 30 June 1987 and the date of his death, as distilled from documents referred to in the second defendant's affidavit of discovery, together with ownership of four properties valued at cost. The contention thus being advanced by the plaintiff was that at the date of Alf's death his net assets, recorded at their historical cost, were shown to be worth $853,813. If certain other properties were included and other adjustments made, the plaintiff contended the total value would have exceeded $1.4M. He contrasted this with the statement of assets ("the r 9B statement") in the affidavit of executors sworn on 15 February 1995 which disclosed assets valued at less than $135,000. The allegation was made that the second defendant's affidavit swearing to the r 9B statement was false.
32 In a further affidavit filed on 30 April 1999 in opposition to the second defendant's chamber summons, the plaintiff described his very lengthy examination of the documents discovered by the second defendant and said that he subsequently completed the "arduous and time consuming task of setting up Alf's accounts into an accounting package from scratch, entered (sic) eight years of data and then cross checking and reconciling the data entered back to account statements and other records".
33 He deposed that as a result of that exercise he identified numerous documents that ought to have been discovered by the second defendant but had not been. Hence his application for further and better discovery. He foreshadowed that he would shortly be filing applications for discovery against various third parties and following that would seek to administer interrogatories and seek orders for the taking of accounts.
34 The plaintiff filed two further affidavits on 19 May 1999, one of which ran to 41 pages. That contained as annexures 34 pages of computer printouts of "reconstructed" accounts produced by a software accounting package "Quick Books Pro for Windows 95".
35 Master Sanderson made orders as sought by the second defendant on 10 and 26 June 1999, including that the plaintiff pay the second defendant's costs in any event.
36 The Master's reasons are set out in a published decision delivered 24 June 1999: Clay v Karlson & Anor [1999] WASC 71. It is worth quoting par [3] and par [4] of those reasons:
"3 In the original will the plaintiff was left a specific bequest which was subsequently reduced by the codicil. It is the plaintiff's claim that Alf was not of sound mind, memory and understanding when he signed the codicil. This is the issue between the parties. It is not alleged that the second defendant exerted undue influence on Alf when he signed the codicil, nor is there any allegation of fraud or the like. The issue is relatively straightforward and, one would have assumed, capable of resolution after hearing from a limited number of witnesses and by reference to a limited number of documents.
4 In fact this is the fourth reserved decision on an interlocutory matter. The action has become bogged down in interlocutory disputes of dubious significance. It is clearly in everyone's interests that this matter be resolved promptly. Apart from anything else, the relevant evidence relates to the circumstances in which Alf signed the codicil to his will on 30 November 1988. As matters stand at present, that will mean that it will be more than 11 years since the relevant events occurred by the time this action reaches trial. The delay must inevitably affect the memory of those involved in the events in question. In an action such as this it is of paramount importance to get the matter to trial as soon as possible, but in this case that has not occurred. That is unfortunate and it is a situation which ought not be allowed to continue."
37 The learned Master struck out the plaintiff's allegation that certain payments were authorised by the second defendant from Alf's bank accounts "without written authorisation" as having nothing to do with Alf's state of mind at the time he signed the codicil, as he did an allegation of improper conduct on the part of the second defendant with respect to certain of Alf's property, that also being completely irrelevant to Alf's state of mind. In striking out words in an answer referring to Alf's knowledge of benefits he had transferred to the second defendant, Master Sanderson said at [9]:
"The second defendant complains that the reference to the benefits transferred to the second defendant raise an irrelevant issue. That is clearly right. The conduct of the second defendant prior to the date of execution of the codicil is, if relevant at all, incidental to the central question at issue in the case. To allow the answer to stand in its present form would provide the plaintiff with the opportunity to raise irrelevant issues and delay the fair trial of the action. The second defendant could not be expected to allow an allegation such as is found in answer 4 to stand unanswered. She would be in a position where she was required to lead evidence on the issue simply to protect her position. That would unnecessarily lengthen the trial."
38 In respect of the plaintiff's application the learned Master held that the further discovery request was extensive and oppressive and that the documents sought were irrelevant. He referred to the plaintiff's attempt to justify the request at [16]:
"It was the plaintiff's submission that one important aspect of his case was the question of Alf's understanding of his financial position as at the date he signed the codicil. The plaintiff says that unless Alf had a clear understanding of his assets and liabilities and the way in which his financial affairs had been conducted for some time prior to his signing the codicil, he could not have a clear understanding of what he was doing when he actually signed the codicil. To the extent that this may be a relevant factor, it seems to me to be peripheral to the central question. It is apparent from the affidavit material filed that the plaintiff has been able to substantially recreate Alf's financial affairs from material which has been discovered. It may be that to obtain a complete and full picture he requires further discovery. But no purpose would be served by this discovery. What he has at present is clearly sufficient for the purposes of cross-examination of various witnesses. This is apart from the question of relevance of most of the post 1988 material. In the circumstances, there would be no purpose served at all in ordering the discovery as sought by the plaintiff."
39 The learned Master also ordered that the matter be entered for hearing.
40 On 8 July 1999 the plaintiff filed a chamber summons seeking leave to further re-amend the statement of claim and another seeking third party discovery from Dr James Robinson. There were appearances on 23 July, 13, 20 and 30 August, and 9 September 1999. Leave to further re-amend was refused and the plaintiff was ordered to pay the second defendant's costs. The minute of proposed amendments filed on 8 July 1999 had contained numerous new claims and assertions, including that Alf needed assistance and appropriate summary reports to comprehend his "substantial estate comprising of (sic) complex interests in substantial assets with a value of not less than $900,000 ..." and referred to the second defendant's conduct from mid-1987 to the date of Alf's death as "progressively converting substantially the whole or (sic: of) Alf's estate to her own use by whatever means available to her ..." and further referred to "her willingness to wilfully conceal information about Alf's estate and to take steps to avoid detection of her actions ...".
41 On 29 July 1999 Master Sanderson made an order for early return of subpoenas duces tecum to Dr James Robinson, Dr Charles Morgan and Sir Charles Gairdner Hospital. The subpoenas were made returnable on 13 August 1999. In an affidavit sworn that day, the plaintiff deposed that (inter alia) he had contacted Drs Robinson and Morgan earlier in the year and both had confirmed they attended Alf as medical practitioners at relevant times. In his affidavit the plaintiff stated that Dr Robinson had told him the doctor's recollection was that Dr Morgan's opinion was that Alf had "lost it" by the time he went to see Dr Morgan. The plaintiff deposed that there was relevant correspondence from Drs Robinson and Morgan to Messrs Gibson & Gibson which had not been disclosed nor produced on discovery by the second defendant.
42 On 19 August 1999 Mr Tydde filed an affidavit claiming legal professional privilege in respect of the documents sought by the plaintiff.
43 Also filed on 19 August 1999 was a minute of further re-amended statement of claim as amended on 7 July 1997 by order of Master Ng. This added a claim and particulars to shift the onus so that the second defendant would have to prove that Alf was of sound mind, memory and understanding as at the date of execution of the alleged codicil. Much of this was in the nature of evidence or argument.
44 The second defendant's claim of privilege was the subject of a hearing on 13 and 20 August 1999. The plaintiff did not dispute the fact that the documents were brought into existence for the sole purpose of the litigation but said that as he was a beneficiary under the will and codicil, it was not open to the second defendant as trustee to claim privilege as against him.
45 By judgment delivered 30 August 1999 (Clay v Karlson [1999] WASC 152) Master Sanderson upheld the claim of privilege against the plaintiff.
46 On 9 September 1999 Master Sanderson refused another application by the plaintiff and dated 19 August 1999 for leave to further re-amend the statement of claim and ordered him to pay the second defendant's costs, although leave was given to the plaintiff to bring in a further minute of proposed orders (Clay v Karlson [1999] WASC 205).
47 On 13 December 1999, Master Sanderson ordered the second defendant to file and serve a supplementary affidavit of discovery. That was filed on 21 December 1999.
48 On 9 February 2000 Master Sanderson ordered the parties have leave to adduce expert evidence at trial and for expert witness statements to be exchanged. The plaintiff's further re-amended statement of claim was filed on 22 March 2000 and yet another on 11 May 2000.
49 On 12 May 2000, Master Sanderson in chambers heard the plaintiff's further application for leave to re-amend and refused leave except to a limited extent. He published his reasons on 19 May 2000 (Clay v Karlson [2000] WASC 132). Having briefly outlined the history of the matter, the learned Master continued (ibid 3):
"Against that background, it might be expected that the statement of claim would be a simple straightforward affair. That has not proved to be the case. The writ of summons containing a general endorsement was issued on 10 December 1996. An amended writ of summons was issued on 23 December 1996. A statement of claim was filed on the same day. Since that date there have been a bewildering array of minutes filed seeking to amend the statement of claim. With great respect, very few of the proposed amendments add anything to the plaintiff's cause of action. Despite that fact having been pointed out to the plaintiff on numerous occasions, still applications are brought to amend the statement of claim. The present application for leave to further re-amend the statement of claim dates from July 1999. There have now been five appearances in relation to this application spread over almost 12 months. On 9 September 1999 I dealt with the application in relation to a minute dated 19 August 1999. I published reasons for refusing leave to amend in the form of that minute: see Clay v Karlson & Anor [1999] WASC 205. In publishing those reasons, I attempted to outline for the plaintiff the parameters within which the statement of claim could be amended. But this latest version goes well beyond the guidelines I provided. In large measure the amendments are unacceptable."
50 The learned Master then went on to deal with the particular amendments sought, and then concluded with the following exhortation (ibid 6):
"It would be in the best interests of all concerned if interlocutory proceedings in this matter were brought to a conclusion. Unfortunately, that is not likely to happen. The plaintiff foreshadowed during the course of his submissions on this application he intended to bring another application for further and better discovery and he intended to seek leave to issue interrogatories. He is entitled to take both steps. There is nothing I can do to stop him. The interlocutory process will drag on. After four years, no trial is in sight. The case brings to mind the comments of Lord Denning MR in Buttes Gas and Oil Co v Hammer (No 3) [1980] 3 All ER 475, where his Lordship said in exasperation (at 487):
'There is quite enough of it in all conscience. Take out a summons for directions. Either side can demand that it be tried by a jury. I pity the jury. Set the action down for trial at once. Let it hang about no longer. For goodness sake get rid of it one way or the other.'
For these reasons I gave limited leave to the plaintiff to further re-amend his amended statement of claim."
51 On 16 May 2000 the plaintiff filed a minute of further re-amended statement of claim pursuant to the order made by Master Sanderson on 12 May, although as was to be seen later, that too went well beyond what the Master had allowed. Also on 16 May the plaintiff filed a chamber summons for further and better discovery and for directions with respect to the representation of the second defendant. So far as the latter was concerned, he was seeking an injunction restraining Tydde & Associates from acting for or representing the defendants in their capacity as executors of the estate.
52 On 29 May 2000, the second defendant filed a re-amended defence and on 3 July 2000, a notice of entry for trial, a certificate of readiness and a book of papers for the Judge.
53 On 31 July 2000 the plaintiff filed a summons to countermand entry for trial and an affidavit in support. The principal point of objection raised by the plaintiff was that his chamber summons seeking specific discovery and an injunction against Tydde & Associates had been referred to a Judge in chambers but no hearing date had been set. Mr Tydde filed a lengthy affidavit in response on 14 August 2000.
54 The application to countermand entry was heard by Ipp J on 15 August 2000. He ordered the plaintiff's application with respect to documents be heard by a Master in chambers, his application for injunction be heard by a Judge in chambers and that both be expedited. The application to countermand entry for trial was dismissed. Costs were reserved.
55 On 7 November 2000, Miller J dismissed the plaintiff's application for an injunction against Tydde & Associates and ordered the plaintiff to pay the second defendant's costs of that application.
56 On 10 November 2000, Master Bredmeyer ordered the defendants to produce for inspection by the plaintiff, copies of the correspondence sought by the plaintiff and ordered the second defendant to pay the plaintiff's costs of the application limited to that order, in any event.
57 There were further affidavits filed on different aspects of the matter and on 23 February 2001 the solicitors for the second defendant filed a book of amended papers for the Judge.
58 The trial was listed before me for five days to commence on 19 March 2001. On 26 February it came before me in general chambers for procedural directions for trial on the plaintiff's application.
59 The first order sought by the plaintiff occasioned submissions for most of the morning, involving extensive argument and citation of, and reference to, authority. No outline of submissions nor lists of authorities had been filed. The point at issue was which party should open and lead evidence first at the trial. The plaintiff submitted the second defendant should do so; the second defendant submitted the plaintiff should. Following the extensive argument on 26 February I reserved my ruling until 28 February 2001. I ruled that the second defendant should open and lead evidence first (T 115-119).
60 Following delivery of my procedural ruling there were lengthy submissions in respect of other directions sought.
61 The second defendant had applied for a direction that the evidence of one of their witnesses, Mr A Elliott, a legal practitioner, be taken by video-link from Darwin. He was due to leave the jurisdiction so that he could commence employment in Darwin on Monday 19 March. Mr Elliott was the employee of Gibson & Gibson, who actually visited Alf and presented the codicil for him to sign. I declined to allow Mr Elliott to testify other than in person. Other formal directions were made as to the exchange of witness statements and other procedural matters.
62 So far as the exchange of witness statements was concerned, the plaintiff indicated that he had issued subpoenas to a number of witnesses whom he expected to call, but he was not in possession of witness statements from them and so could not provide them. He said that with some of them he had an idea of the evidence he would expect them to give, but could not say exactly what it would be. I then asked him (T 132):
"Does your position come down to this, and this is an option in this jurisdiction of course which sounds also in costs, which is perhaps something you might want to think about but you may well have already done so. Is your position essentially that you want to put the second defendant simply to proof in solemn form of the codicil and to test by cross-examination any of the witnesses who the second defendant may call to do that or alternatively do you in fact have witnesses who you can put forward as adding evidence which would not otherwise be before the court or who would say something different from the evidence led on behalf of the second defendant?"
to which the plaintiff replied that it actually fell a little bit between the two; he said the witnesses he sought to cross-examine as a whole would be witnesses he believed the second defendant, as executrix, ought to call, but he had no confidence she would. Asked then to explain the basis upon which he proposed to cross-examine such witnesses if they were in fact called by the second defendant, he said there were prior statements from most of them upon which he would rely; however if the second defendant did not call these witnesses, he would be left in the position where he would need to call them and eventually rely upon their prior statements for the purpose of impeaching them if they did not come up to those prior statements. There was then some further lengthy discussion about which witnesses would be called by the second defendant.
63 Asked whether he was challenging the original will, the plaintiff said he was neither for nor against it, but the second defendant had to prove it. There was more discussion and then I made further procedural orders as to witness statements and summaries of evidence of expert witnesses.
65 By memorandum dated 13 March 2001 the plaintiff had sought directions for further and better discovery of documents and in respect of a matter arising under the Spent Convictions Act 1988 (WA).
66 Further time was taken up dealing with these applications before the trial proper. In the event, I made an order under s 14(3) of the Spent Convictions Act 1988 and as to the documents it transpired that those sought by the plaintiff to be discovered had either already been provided to him or had been produced to the court on subpoena. I gave leave to the parties to examine them.
67 The plaintiff then sought directions as to the issues on which evidence could be led by the parties on the trial.
68 The plaintiff submitted that the three key issues in the action were:
2. the testamentary capacity of the deceased at the time of their execution, and
3. the knowledge and approval of the testator at that time.
He said that amongst the matters the second defendant would seek to raise included assertions that transfers of money and property were made to her following the date of the codicil and that as a result of those transactions the net value of the estate at the date of death was only around $130,000. He said it was his contention that a number of those transfers were not proper and in any event there would be a presumption of undue influence attaching to them. He suggested the value of the estate as at the date of death may have been in the order of $800,000. He said the point was that if the trial were to involve any determination of those issues and what the actual value of the estate was at the date of the testator's death, it would require a significant amount of evidence to be brought as to the transfers and their circumstances which would have nothing to do with determining whether or not Alf had testamentary capacity, whether he knew and approved of the contents of the will or whether there was due execution.
69 He submitted the other basis on which the second defendant would seek to rely on these transfers was as evidence that Alf wanted to provide for her and therefore the provisions under the codicil would be seen to be consistent with his desire to transfer his assets to her both before and after the execution of the codicil.
70 He submitted that the limited relevance of these matters would be substantially outweighed by the unrelated issues it would raise and which he would want to contest.
71 He referred to the history of the proceedings wherein he had earlier sought discovery from the second defendant of her records in relation to some of these matters, in relation to her bank accounts, land transfers and the like as well as Alf's records for the purposes of establishing that the r 9B statement declaring the value of the estate be approximately $130,000 was incorrect. He noted that Master Sanderson had rejected discovery on that basis because in his view it was unnecessary. He said the Full Court had confirmed that decision.
72 As the plaintiff developed his submissions, it became apparent that his real concern was that if such evidence were given and he did not take the opportunity to meet it, it would be open for the court to find that those transfers of land and property were valid, and if those findings were made, he would be precluded later from challenging them. He also foreshadowed that were the second defendant to be permitted to give evidence of the transfers of this property to her, he would want to cross-examine her about the purposes to which they were put.
73 Mr Davis, who appeared for the second defendant at trial, submitted that throughout the "interminable" interlocutory procedures, the plaintiff had made repeated attempts to introduce into the pleadings, and to obtain orders for discovery based on, a proposition that the second defendant was guilty of dishonesty and fraud. The point was repeatedly made to him that if he wished to raise those matters, they would have to be pleaded. That was not done, and as a consequence the plaintiff was totally precluded from raising such allegations.
74 He submitted that one issue raised by the plaintiff was that of his own relationship with Alf and that of the second defendant's relationship with Alf. So far as the latter was concerned, the evidence would be that she and Alf had an extremely close relationship as a result, and in the course of which over a number of years he transferred to her virtually all of his property and money. It would be suggested that from that evidence the court should infer that the content of Alf's codicil was entirely consistent with his conduct both before and after it. The leading of evidence about that would not give rise to any issue as to the propriety of the transfers, nor the source or destination of the property. The proposition which would eventually be sought to be advanced on behalf of the second defendant, would be that on the evidence, Alf had quite deliberately transferred to the second defendant property and assets to the extent that at the date of his death his assets were in the order of $130,000, which was just sufficient to pay out the legacies - the inference being that his course of action was to deliberately leave enough to cover the specific legacies and nothing more. He submitted that where the money given to the second defendant by Alf may have gone subsequently would be of no relevance to the trial whatsoever.
75 In my ruling given immediately, I refused to give the directions sought by the plaintiff. Pertinently for present purposes, I said:
"So far as the complaint is made by Mr Clay that leading evidence of that kind ought not to be permitted because it has not been pleaded, it seems to me that the pleadings clearly put very much in issue Alf's consciousness of what was in his estate and the various dispositions that he was making in the codicil in particular.
For example, the plaintiff's own statement of claim in paragraph 7 alleges that at the time of the execution of the codicil Alf was not of sound mind, memory and understanding. Paragraph 8 alleges that at the date of it he did not know and approve of the contents of the will and alleged codicil.
It seems to me that evidence of dispositions made by Alf consistently with the contents of the challenged codicil clearly have a potential bearing and hence relevance in this matter. I do not accept Mr Clay's submission that in the circumstances this is a matter of strict pleading. It seems to me that they are matters of evidence on the pleadings as they already are. They are matters of evidence which go to, in particular, Alf's knowledge and testamentary intention.
I do not propose to accede to Mr Clay's submission that I should give directions restricting the evidence to such an extent as to prohibit evidence of that kind. This is not to say that I am intimating these proceedings will in any way turn into a general inquisition into Alf's affairs or conduct particularly after the execution of the codicil, much less the affairs and conduct of the second defendant or anyone else.
Evidence led and questions asked will, as always, be constrained by the requirement of relevance to the issues. Consequently, if Mr Clay has relevant matters to put to witnesses in cross-examination which may go to their veracity, as he has put it, or to their credibility, then of course he will be entitled to do so, subject of course again always to the question of relevance.
In that situation, however, again the ordinary rules would apply so that if a witness is cross-examined on a relevant matter but one which is relevant only because it goes to credibility, then the cross-examiner will of course be constrained by the answers given by the witness in due course, but, as I say, that is the normal rule in any event.
I do not propose to give a direction limiting the evidence in the way sought. The application is refused."
76 There was then further dispute between the parties and submissions as to the supply of documents between them, there was a return of subpoena to the first defendant and finally, about an hour and a half after the hearing commenced, Mr Davis opened for the second defendant.
77 Briefly put, the case as opened for the second defendant was as follows. Alf was born in South Africa in 1914. In November 1988 he was 74 years of age. He died in January 1995, having just turned 81. He came to Australia as a young child and spent his working life in Perth in the motor trade. He never married and had no children. He was an astute businessman. He accumulated significant property and cash over his working life. He suffered his first heart attack in 1971 after which he was under treatment for the heart condition for the remainder of his life.
78 He met the second defendant, Marie Kurelic in about 1973 or 1974. They became friends and that friendship later developed into a very close, intimate and interdependent relationship.
79 Alf had a permanent epicardial pacemaker inserted in January 1979 and in that same year had his first stroke. A second stroke is documented in the medical records in 1983, but that apparently was not serious. From the early 1980s onwards, Alf was transferring money and property to the second defendant. Their relationship by that time was on a very firm footing. He executed the relevant will in 1987.
80 During the following year, Dr Robinson replaced Alf's pacemaker. There were various transfers of property and money from Alf to the second defendant. Alf visited Dr Robinson at his rooms on 22 November 1988 and the doctor would be called to give evidence of that.
81 On 29 November 1988 the second defendant was asked by Alf to collect his will from the accounting firm Ernst & Whinney (in which the first defendant was a senior partner) and she did so.
82 The next morning Alf produced a document containing instructions for what he described as a new will and asked her to take that and the 1987 will to a lawyer to have a new will drawn up. She took the documents to Mr Craig James at Gibson & Gibson, a firm whose name she got out of the Yellow Pages. Mr James took the view that a codicil would be a more prudent testamentary instrument than a complete new will and so he prepared one in accordance with the draft document given to him. He instructed an articled clerk with his firm, Mr Tony Elliott, to take the will and codicil to Alf, together with a letter from the firm and to ensure the proper execution of the codicil and that Alf had testamentary capacity. Mr Elliott that afternoon took the codicil to Alf's residence, discussed it with him, and witnessed Alf's signature to the document. The other witness was a Mr Mackie, who was a resident of the block of units.
83 Following the execution of the codicil, Alf had certain medical problems during 1989 and deteriorated physically to the extent that in February 1990 he was admitted to the Freeman Nursing Home. During the course of that year he was admitted to Sir Charles Gairdner Hospital on one occasion for respite care because the second defendant needed a break from caring for him.
84 In the course of 1990 and 1991 Alf transferred further money and property to the second defendant.
85 In March 1994 he was transferred from the nursing home to Hollywood Private Hospital where he later had his legs amputated because of circulatory problems and subsequently died on 24 January 1995.
86 Mr Davis foreshadowed that there would be 17 witnesses called for the second defendant.
87 In the will of July 1987, Alf appointed the first and second defendants executors of his estate. He left bequests of $100,000 each to Mark and Paul Clay and to a sister Mary Whiting. He also left $10,000 to each of three other people, one a nephew and two female friends. The second defendant was named as the residuary beneficiary.
88 In the codicil of November 1988 Alf deleted the legacies to his sister (who subsequently died) and to the two friends. He also reduced the amounts of the legacies to the plaintiff and his brother Paul to $50,000 each; the legacies therefore at that point were $50,000 each to the plaintiff and Paul Clay and $10,000 to Alf's other nephew Michael Whiting.
89 By the time Alf died in 1995 there was one property at Vincent Street in Nedlands left in his name and a small amount of cash. Almost everything else had been gifted to the second defendant either before or after the date of execution of the codicil. The Vincent Street property, together with a small amount of cash was just sufficient to pay out the legacies in the codicil.
90 The second defendant was called and swore to the truth of the contents of her witness statement. Mr Davis then put to her a long series of documents referred to by her in the statement. Those were tendered. After a number of documents had been tendered in this way, the plaintiff objected to the course which was being taken and to the giving of the evidence-in-chief of the witness by way of tender of her statement (it had not in fact been tendered at that point). Mr Davis then sought to tender the statement and the plaintiff objected to it on the ground that the second defendant was an important witness in the proceedings and her evidence should be given orally.
91 The plaintiff then outlined his objection to numerous paragraphs in the statement of the second defendant and submissions from both parties were heard in relation to them. This process continued into the afternoon, the witness having been stood down.
92 My ruling on those objections took from 2.33 pm to 2.51 pm. The plaintiff then raised further objection that the second defendant was seeking to raise issues in evidence in respect of which she had not given discovery and that either discovery should now be given or she should not be permitted to lead the evidence. Having heard further submissions from counsel, I ruled that I would not order any further discovery or inspection at that stage, nor would I limit the evidence which may be led by the second defendant in relation to those matters.
93 The plaintiff then made further objections to the content of the witness statement of the second defendant, arguing that the evidence sought to be led went beyond the pleadings. At 3.22 pm I ruled against that objection.
94 The plaintiff raised further objections to the tender of other documents referred to in the second defendant's statement and after those were dealt with the witness resumed her testimony at approximately 3.30 pm.
95 More documents were tendered. These included certificates of title and transfers of properties from Alf to Mrs Kurelic and a copy of a eulogy delivered by Mr Clay at Alf's funeral, together with a letter by him written to her subsequently. The relevance of these were that they were said to evidence Mr Clay's recognition of the closeness of the relationship between Alf and the second defendant and her devotion to him during the period of his declining health.
96 She then testified that the day before he signed the codicil, Alf asked her to go to the office of the first defendant and collect the 1987 will. He had been saying for a long time he wanted to do the right thing by her and make sure she was looked after when he was gone. She did as he asked and took the will to him at his unit. She returned the following day and he gave her a typed document ("the instruction document") and asked her to take it to a lawyer. She asked "which lawyer". He said he did not know, so she found the name of Gibson & Gibson in the telephone book.
97 The instruction document Alf gave her appears to have been typed on the same or a very similar typewriter or printer as the 1987 will, but (apart from the changes to cl 3, which was the operative clause) whereas the second defendant's name as typed in the 1987 will was "MARIE KURELIC", it was typed in the instruction document as "MARIA KURELIC".
"3. I GIVE to the following persons (each free of all Death Duties) the following pecuniary legacies, namely:-
(1) to each of my sister MARY GLADYS WHITING of 'Lionsbrae', Everade Street, Ringwood, Victoria and MARK GREGORY CLAY and PAUL JAMES CLAY the sum of ONE HUNDRED THOUSAND DOLLARS ($100,000.00);
(2) to each of MICHAEL ANTHONY WHITING of 332 Maroondah Highway, Ringwood, Victoria, ELAINE FRANCES OLDHAM of 471 Stirling Highway, Cottesloe, Western Australia and PAMELA CASTILE ROELOFSEN of 11 Castile Way, Wembley Downs Western Australia the sum of TEN THOUSAND DOLLARS ($10,000.00)."
99 The instruction document so closely resembles the first page of the 1987 will other than for cl 3, that at first glance it might be thought a photocopy - yet as I have observed, the second defendant's name was differently spelled in the two.
100 Clause 3 of the instruction document read (handwritten amendments are italicized):
"3. I GIVE to the following persons (each free of all Death Duties as defined in my said will) the following pecuniary legacies, namely:-
(1) to each of MARK GREGORY CLAY and PAUL JAMES CLAY, the sum of FIFTY THOUSAND DOLLARS ($50,000.00);
(2) to MICHAEL ANTHONY WHITING of 332 Maroondah Highway, Ringwood, Victoria, the sum of TEN THOUSAND DOLLARS ($10,000.00)"
101 The provenance of this document was never established in evidence.
102 The second defendant read through it with Alf and they discussed it. She corrected the spelling of her name to "MARIJA" and wrote "each of" in front of the names of Mark and Paul Clay in lieu of the words "the said" to make it clear that each was to receive $50,000.
103 The second defendant went to Gibson & Gibson and saw Mr James. She gave him the documents and told him Alf wanted a new will. He said he would look after it.
104 The next day Mr Elliott came to Alf's unit and said he would need another person as a witness, so the second defendant went upstairs and got Mr Mackie. Elliott then asked them to wait outside while he spoke to Alf. They did so. Then he asked them in and Elliott and Mackie witnessed the codicil. The second defendant did not know what happened to it thereafter.
105 The plaintiff's cross-examination of the second defendant commenced just after 4.00 pm on 19 March. The court adjourned just after 4.30 pm that day and the cross-examination continued on 20 March. In his cross-examination the plaintiff canvassed at some length the second defendant's knowledge of Alf's relationships with and feelings about the plaintiff and other members of the family, his reasons for wanting to change the provisions of his 1987 will, conversations Alf had with the second defendant about his property and why he wanted to make greater provision for her. She agreed that he spoke to her about this some three months before the codicil, and by that time she had already received from him gifts of property worth in excess of $500,000. In addition, he was paying her a salary of $25,000 per year and she was the residuary beneficiary under the 1987 will.
106 At that point (T 280) the plaintiff sought to refer the witness to a financial balance sheet prepared by him. Mr Davis objected, so the plaintiff indicated he would take the witness to the supporting documents. The second defendant accepted (T 283) that as at the date of the codicil Alf's estate was valued in excess of $700,000. The legacies then extant under the 1987 will totalled $330,000 leaving a total of some $400,000 to go to her as residue.
107 The cross-examination then turned to Alf's condition. The plaintiff tendered extensive medical records and cheque butts and deposit books relating to Alf's bank accounts. He then cross-examined the second defendant at length on individual payments and deposits recorded on the bank documents and Alf's signatures and writing thereon, and then turned to her earlier evidence that Alf remained mentally alert "pretty well to the time he died". On this last, he cross-examined her by reference to the medical records in evidence, in particular those suggesting Alf had impaired speech and comprehension. The second defendant adhered to her evidence about that. The plaintiff then briefly turned to the second defendant's evidence about the preparation of the codicil and then to Alf's income tax returns and her involvement in the conduct of his financial affairs. This continued to the luncheon adjournment.
108 On resumption, the second defendant was stood down while Mr Elliott was interposed by consent. His statement was tendered as his evidence-in-chief. Through him also were tendered a file note made by him on 30 November 1988 of his attendance on Alf that day, together with a letter from Gibson & Gibson to Alf which Elliott had taken with him. He was then cross-examined by the plaintiff. That was completed by 3.25 pm on 20 March and the cross-examination of the second defendant resumed.
109 The plaintiff's questions concerned payments made to the second defendant from Alf's accounts and payments by her into his accounts (which the plaintiff sought to characterise as "repayments of loans" - something which the second defendant denied).
110 At that point the plaintiff referred the witness to a document prepared by him (MFI.P220). Mr Davis objected. The plaintiff said his document should be admitted into evidence because it (and the underlying transactions on which it was based) related to what was in Alf's estate at the date of his death and hence his awareness and intention at the date of the codicil. He wished to contend the transactions were either not bona fide, or represented loans rather than gifts.
111 In response to Mr Davis' objection that it had already been made clear to the plaintiff on several occasions that by his pleadings he was precluded from alleging or seeking to establish fraud or dishonesty, the plaintiff asserted (T 366) that that restriction applied only to the execution of the codicil and he was not precluded from doing so in relation to transactions which occurred thereafter.
112 Having heard the parties' submission on this objection I gave a ruling just before 4 pm. In that ruling (T 369-370) I first observed that I was troubled by the application which, as I understood it, was intended to allow the plaintiff to attack transactions, transfers, gifts or other arrangements as between Alf and the second defendant at times post-dating the execution of the codicil. The concern was that were the case to proceed in that way, it had an obvious potential to blow out into some sort of inquiry into all sorts of possibly collateral issues and attacks on transactions which in the end it would not be for me to resolve or determine in the context of the case pleaded.
113 I reiterated that I was mindful that for the plaintiff to approach the matter in that way it could not be done as a cloak for allegations of fraud or dishonesty which had not been pleaded, nor should attacks on the evidence of witness going to collateral matters be permitted.
114 The particular difficulty with the application however, was that the second defendant had already succeeded in earlier obtaining a ruling in relation to the leading of evidence of these particular transactions, the justification being that they were said to be relevant to demonstrate a long-term and ongoing relationship between the testator and the second defendant and reflecting his testamentary intentions as at the date he executed the codicil. It seemed to me it would be quite unfair to allow the second defendant to lead evidence of those transactions to give rise on her case to that particular inference without allowing the plaintiff the opportunity to lead evidence to dispute those transactions or the nature of them and/or the inferences therefore to be drawn from them.
115 For that reason I ruled that I would allow the plaintiff to cross-examine and to lead contradictory evidence as to those particular transactions. The transactions there being referred to were a $300,000 cash gift and a transfer of property at Rosendo Street to the second defendant. The hearing was then adjourned to 10 am the following day.
116 On 21 March 2001, having further reflected on the matter overnight, I made some further remarks elaborating on that ruling (T 373-5). I referred to the plaintiff's earlier expressed concern about findings being made in this case that the particular transactions were valid, with the consequence that he would be precluded from challenging their validity later, presumably in other proceedings. I noted he had said then that he needed to cross-examine the second defendant about what happened to the property after she received it, for the purpose of testing her veracity about what she was given and about the transactions generally.
117 I went on to say that given the principle that on this hearing evidence should be led and decisions ultimately made only to the extent necessary to determine the issues properly raised on the pleadings, the first consideration referred to by the plaintiff was one which in my view had no bearing on how the trial was to be conducted before me; and the second seemed to me to be describing a cross-examination directed to the credibility of the witness. I said that for the reasons given briefly in my ruling on 19 March, allowing the second defendant to lead evidence of post-codicil transactions, I considered them relevant, to whether or insofar as the transactions did or did not occur, and what they were, namely whether they were gifts or loans. That was on the basis that when a person's state of mind in reference to a transaction is material, as it was here, all facts and declarations from which it may be inferred, whether previous or subsequent to the transaction, are in general, evidence as to that matter.
118 I said that for those reasons I was reiterating my earlier ruling that I would allow evidence to be given as to those matters, but matters beyond that would be collateral and in any event would be going directly to the credibility of the witness. Accordingly, challenges to such evidence would be matters on which a cross-examiner would be bound by the answers of the witness in the sense that the cross-examiner would be precluded from leading evidence to disprove the answers given. If the plaintiff wished to put questions in cross-examination to the witness which involved allegations of fraud or dishonesty in relation to those transactions, I said he may do so, but he would be bound by her answers and it would not be open to him either to give or seek to adduce evidence to contradict them. I also pointed out that as a solicitor and officer of the court, the plaintiff would no doubt be well aware that allegations of fraud or dishonesty ought not be made unless there was a proper basis for the making of them.
119 The plaintiff then suggested the ruling I had given that morning was inconsistent with that of the day before. He reiterated he was attempting to lead evidence that some of the transactions subsequent to the codicil were not done by Alf (ie were fraudulent) and he wished not only to cross-examine the second defendant to that effect but to lead evidence to contradict her should she deny it. I repeated that he would be permitted to cross-examine her about whether a transaction was a gift or a loan and if necessary in due course to lead evidence about that, but to the extent the cross-examination might go beyond that, it would go only to the credibility of the witness and would be only as to collateral issues. For both those reasons he would be bound by the answers of the witness and could not adduce evidence to contradict her. There was then a short adjournment. When the hearing resumed at 10.30 am the plaintiff referred to the transcript of the previous day's hearing and again began to canvass the ruling made, but was required to continue with his cross-examination of the second defendant. He requested me (T 382) to specify that no finding in these proceedings would raise an issue estoppel in relation to the transactions he wished to impugn. I told him I would not have thought so but that had nothing to do with the conduct of this case and was not for me to say.
120 The plaintiff then began a lengthy series of questions referring the second defendant to Alf's bank account and other financial records, and to specific deposits, withdrawals and transactions. What the plaintiff was attempting to do was to establish every transaction listed on the document MFI.P220 prepared by him and entitled "Transfers to and from M Kurelic - 1/1/87 to 24/1/95". That had a number of headings, some of which referred to "misappropriated" funds or "unauthorised" transactions. This was the document which had been objected to by Mr Davis and was not in evidence. This process continued until about 11.40 am when the plaintiff again sought to tender the document and Mr Davis again objected to it on grounds of relevance (T 406). There was further discussion about the document and in particular, whether it was necessary to put each transaction to the witness when it was the plaintiff's contention they were all recorded in the financial documents already in evidence. I refused the tender of his document at that stage.
121 The plaintiff then commenced another line of cross-examination, this time about Alf's signature and handwriting. He had the witness identify those on particular documents and then proceeded at considerable length to take the witness through a comparison of the identifiable features of the signature and variations from it on various documents. In response to a further objection by Mr Davis the plaintiff explained he wanted to cross-examine the second defendant about whether the signature on the transfer to her of Alf's property at Rosendo Street was Alf's signature, and his cross-examination about the characteristics of Alf's signature was leading up to that.
122 I allowed the plaintiff to cross-examine for the purpose of the witness making a comparison of disputed handwriting in accordance with s 31 of the Evidence Act 1906 (WA) - however, the cross-examination continued in the form of putting to the witness a detailed analysis of numerous individual signatures before culminating (about 2.50 pm that day) on the one with which the plaintiff was really concerned, namely the transfer of land dated 1 May 1991 relating to Rosendo Street (exhibit P506). As to that, the witness maintained that despite whatever apparent differences the plaintiff was pointing to between that and other signatures of Alf, she recognised the signature on the transfer as being his. This process had taken over 1-1/2 hours from about 11.50 am to 2.50 pm (excluding the luncheon adjournment).
123 The cross-examination continued, first about Alf's condition in the nursing home and later again the plaintiff tendered through this witness a large number of more financial records relating to Alf's bank accounts and other assets, Australian Taxation Office notices and other documents. This continued until about 4 pm on 21 March. At that time Mr Davis objected to the plaintiff's tender of notices of council rates and charges and a land tax assessment notice in respect of Alf's properties.
"DAVIS, MR: I object, your Honour. There has to be a stopping point somewhere here. I don't know what minute analysis Mr Clay proposes to make later on in submission but I do hope - if he proposes to descend to that level, perhaps we should know about it now.
CLAY, MR: Your Honour, I have prepared accounts for Alf Clay, as you're aware, and the second defendant is going to require that I prove those and the only way to prove them is by reference to the source documents. If the source documents aren't in evidence, I'm not going to be in a position to do that.
ROBERTS-SMITH J: So what are you proposing to do?
CLAY, MR: I will be in a position to rely on those source documents because they are then exhibits.
ROBERTS-SMITH J: To do what?
CLAY, MR: To prove the accounts that I have prepared.
ROBERTS-SMITH J: What accounts have you prepared?
CLAY MR: The accounts of all the transactions of Alf from around 1987 through to the date of his death.
ROBERTS-SMITH J: In what form?
CLAY, MR: In similar form to the manner that I have - - -
ROBERTS-SMITH J: MFI P220?
CLAY, MR: The schedules that have been there. There are balance sheets that I have prepared. Basically I have entered all of the transactions into an accounting system and produced accounts from there."
125 Further submissions were made by the plaintiff as to the admissibility of his schedules of accounts, in the course of which the witness was stood down. This continued until the hearing was adjourned at approximately 4.50 pm. After dealing with some preliminary matters concerning subpoenas, the attendance of witnesses and possible future trial dates raised by the plaintiff, I ruled (T 497-507) on the plaintiff's application to tender the documents and Mr Davis' objection to that. At the outset I marked some of the schedules ("the Clay Schedules") for identification, they being MFI.P209, P210, P211, P213, P214, P215, P218 and P227. These included detailed accounting analyses by the plaintiff of hundreds, if not thousands, of transactions between June 1987 and January 1995.
126 In my ruling I noted it was then the morning of the fourth day of the trial which had been listed for five days and in which the second defendant would be calling 17 witnesses. With the exception of one relatively brief witness (Mr Elliott) the first witness to be called (the second defendant herself) was still in the witness box under cross-examination by the plaintiff. I reiterated that the plaintiff had not pleaded fraud nor dishonesty in relation to the will or codicil nor any other transaction and that in previous rulings it had been made clear that in the absence of such a pleading he would not be permitted to seek to prove fraud or dishonesty. I referred to my rulings given on 19 and 21 March. I observed that the plaintiff had thus far justified his cross-examination of the second defendant about Alf's financial affairs generally on the basis it was necessary to establish the content of Alf's estate as at 30 November 1988, the date of the codicil, and to deal with evidence led by the second defendant for the purpose of showing consistency of conduct on Alf's part reflecting his generosity to the second defendant and an awareness of the content of his codicil and estate. I had been permitting the plaintiff's cross-examination on these matters for the limited purpose of determining whether or not Alf had a sufficient appreciation of his estate for testamentary purposes. In response to the most recent objection by Mr Davis, the plaintiff had submitted he needed to tender the notices of rates and taxes and many other documents to afford him an evidentiary basis for evidence he proposed to give himself later and for the tender of the Clay Schedules.
127 The plaintiff had said that he had commercial or business and accounting qualifications and experience and he had relied upon those in the preparation of the schedules. He had described the exercise as being an examination and analysis of a very large body of source documents comprising, inter alia, cheque butts, deposit books, bank statements and other records. He had used a computer package to prepare and present them in the various formulations in which they appear in the Clay Schedules.
128 I pointed out that even a cursory examination of the Clay Schedules revealed that they descended to minute particularisation of hundreds, if not thousands, of transactions over a period of at least 1987 to 1995. Their preparation involved the use of computer software which on the plaintiff's own submission was designed for the analysis of a trading business rather than the particular exercise to which he had applied it, and the making of many assumptions.
129 In my view the Clay Schedules were clearly in the nature of expert evidence and although it is obviously permissible for expert evidence to be given on the basis of identified assumptions, the assumptions so far identified by the plaintiff in this case were not, in my view, appropriate. In particular, it was clear that the schedules had been prepared so as to purport to reflect, as the plaintiff would see it, funds which had been misappropriated and transactions which had been unauthorised - which was contrary to the evidence to that point. The nature of the plaintiff's assumptions could be encapsulated sufficiently by his acknowledgment that he had made a global assumption that everything received by the second defendant identifiably from Alf, whether money or property, either remained Alf's property or constituted a debt repayable by her to him. It was in that way that the plaintiff arrived at his calculation of the value of Alf's estate as at the date of his death, as being something in the order of $800,000. In summary I concluded that (T 505-507):
"The Clay Schedules, in my view, are substantially speculative. They are argumentative and really amount to a written formulation of the case the plaintiff seeks to put, and indeed one which he is not permitted to put. The assumptions so far identified are mostly, if not all, completely contrary to the only evidence on the issues at the moment.
Given the constraints upon the plaintiff, that he cannot lead evidence seeking to prove fraud or illegality, or to lead evidence to disprove answers given in cross-examination as to credit, or which are otherwise collateral, it is difficult to see how there could be evidence which could possibly support them, but even if there were, the point is the assumptions are at best wholly argumentative. In my view, the schedules and the evidence to support them are inadmissible, both for those reasons, and because they are irrelevant to the issues in this trial.
There are other difficulties too with what the plaintiff is proposing. As I have said, there is no allegation of fraud. The evidence of the financial records, to give a general picture of what was in the estate for the purpose of ascertaining whether Alf had a reasonable understanding of that, is one thing, but this exercise has now gone way beyond that.
It is crystal clear now that despite the earlier rulings as to the pleadings and on the conduct of the case, and in the context that he has not pleaded fraud or illegality, and in the context that his application is for revocation of the codicil, on grounds essentially going to testamentary capacity and understanding, to put it in broad terms, the plaintiff now seeks to mount a full collateral attack on all transactions or transfers of money or property between Alf and the second defendant both pre-dating and post-dating the codicil. That is patently the purpose of the exercise he seeks to undertake by way of adducing evidence in the form of the Clay Schedules and otherwise about those transactions. It is quite outside the scope of this action and is impermissible.
Furthermore, to the extent Mr Clay seeks to rely upon expert evidence there must be compliance with the procedural rules regarding expert evidence and in particular order 36A of the Supreme Court Rules. Order 36A rule 3(2) provides:
'Except with the leave of the court or where all parties agree, no expert evidence may be adduced at the trial or hearing of a cause or matter unless the party seeking to adduce the evidence has applied to the court to determine whether a direction should be given under this rule and has complied with any direction given on the application.'
Then of course follow rules regarding the provision of copies or summaries of reports to other parties, amongst other things. Compliance with that rule is important. It gives the other parties an opportunity to consider and to test the material and, if necessary, to arrange their own expert either to provide information in relation to that material or to testify. That opportunity has been denied the second defendant here.
Even were the schedules based properly on materials already in evidence for relevant purposes and were not subject to the other difficulties to which I have already referred, I would not be prepared to grant the leave required by order 36A rule 3(2) for the plaintiff to lead this evidence at trial.
For all these reasons I rule that the Clay Schedules and evidence of or led solely to support them are inadmissible."
130 The plaintiff's cross-examination of the second defendant continued, first in relation to transfer documents signed by Alf at the nursing home and then the circumstances surrounding and following the execution of the codicil and discussions the second defendant had with Alf about his assets. The cross-examination of the second defendant concluded just before 11 am on 22 March and the re-examination concluded about 11.15 am.
131 Mr Davis then called Mr Craig James of Gibson & Gibson, who confirmed the instructions given to him by the second defendant, the decision he made to prepare a codicil instead of an entirely new will and the arrangements he made for Elliott to attend on Alf and see to the proper execution of the codicil. In cross-examination he said he was relying upon his file notes and had no independent recollection of those events. He agreed (T 533-4) that his instructions to Elliott were really directed to establishing Alf's knowledge and approval of the codicil rather than his testamentary capacity.
132 The next witness was Mr Mackie who essentially confirmed Elliott's evidence relating to the witnessing of the codicil. In cross-examination he agreed that at that time Alf had a problem with his speech (that is, he had difficulty speaking) but said there was no doubt he could make himself very clearly understood.
133 Mr Michael Clifford, a real estate agent, was called to give evidence of his dealings with Alf concerning property transactions and he was followed by Ms Lois Engel, a retired accountant, who had had professional dealings with Alf. In cross-examination she said her last contact with Alf was late 1987. She agreed that between 1983 and 1987 Alf had some difficulty with his speech and could not always express himself in full sentences, but despite that he could get his message across. She was never in any doubt he knew what was going on.
134 The first defendant was called about 12.41 pm on 22 March. His statement was tendered as his evidence-in-chief. The plaintiff did not cross-examine. The hearing was adjourned to 2 pm. On resumption, there was discussion about the attendance of further witnesses. The plaintiff wished to make arrangements for his expert witness, a Dr Loke. There was a brief adjournment to enable him to do that. When the hearing resumed the second defendant called two more witnesses simply to produce hospital documents on the return of subpoenas and then called a police officer, Senior Constable Ken McDonald.
135 There was objection by the plaintiff to the reception of the officer's evidence, but having heard submissions I ruled it admissible (T 576). The evidence was given and there was no cross-examination.
136 The next witness for the second defendant was Mr Hamish Brown, a registered nurse. His statement was tendered as his evidence-in-chief. He had nursed Alf in the nursing home and gave an account of his observations. He was cross-examined about Alf's visitors and Alf's condition. He confirmed Alf had been admitted to the nursing home in February 1990 and said there was no suggestion on their records, nor to his knowledge, that Alf had dementia. He acknowledged that the records of Sir Charles Gairdner Hospital, to which Alf had been admitted in September 1992, contained reference to Alf suffering that condition. He also agreed that records from Queen Elizabeth II Hospital of February 1990 from which hospital Alf was discharged to the nursing home, also mentioned dementia. He maintained his evidence that the nursing home considered Alf did not suffer from dementia.
137 Dr James Robinson was called just before 4 pm on 22 March. The plaintiff took objection to certain parts of his statement. In particular he objected to the doctor giving any evidence of his opinion of Alf's mental capacity. This appeared to be based on a proposition that such evidence could only properly be given by a psychiatrist or a psychologist. Submissions were made in respect of these matters. I over-ruled the plaintiff's objection (T 609-611).
138 Dr Robinson had been the treating doctor and a friend of Alf's for some 18 years. He had also seen him eight days before execution of the codicil. The doctor's testimony was in substance that if Alf had displayed any relevant incapacity he would have noticed it and noted it in his records and he had not done so. He had seen the codicil and will and was of the opinion that the transaction embodied in the codicil was something Alf would have had the capacity to understand in 1988. He said that based on his examination and observation of Alf eight days before execution of the codicil it was his opinion that the changes to the will as reflected in the codicil were changes Alf would have wanted to make - that is to say, changes he had the capacity to understand and to want. He saw Alf again on 22 November 1988 and although Alf had severe expressive dysphasia which he found frustrating, he was still of sound mind.
139 The doctor's evidence-in-chief concluded about 4.35 pm. His assessments of Alf's condition and capacity in November 1988 were not in any way eroded in cross-examination. Alf knew what was going on, was mentally alert and although he had difficulty speaking because of his dysphasia he could communicate effectively, especially to people who knew him. The plaintiff completed his cross-examination of this witness just after 5 pm and after a brief re-examination the trial was adjourned to the following morning, Friday 23 March.
140 A few minutes before the hearing was due to resume on 23 March, the plaintiff handed to my Associate and served on the second defendant's solicitors, a document headed "Amended Outline of Submissions for Trial" ("the Plaintiff's Concession Outline"). In that, he first referred to an outline of submissions filed by him on 20 March 2001 and withdrew the submissions made at par 4 and par 5 of that document. Those submissions were:
"4. It is not possible in an action for proof or revocation in solemn form to bring action by the estate or as a beneficiary to recover for the estate. An interest in the estate sufficient to give rise to a right to claim must first be established.
5. To the extent that the court treats the value of the estate at death as relevant to any issue in the proceedings, I contend that the evidence does not support the transactions asserted by the second defendant nor the value of the estate disclosed by her in the rule 9B statement. I contend that the evidence supports a value of the estate at death in excess of $600,000."
141 Paragraphs 2 to 5 inclusive of the Plaintiff's Concession Outline were as follows:
"2. On the basis of my personal knowledge of Alf Clay and the testimony of Mrs Kurelic, I now believe that Alf Clay, in respect of the preparation and execution of the codicil (and in all other transactions) was directing Mrs Kurelic. I conclude from that belief that Alf must have known and approved of what he was doing and that, in all probability, he had testamentary capacity.
3. My assessment of Mrs Kurelic is that in substance she was a witness of truth. In respect of the signing of the Rosendo Transfer, I accept that the signing and witnessing was done in the manner Alf directed and that there was no fraudulent intent or purpose.
4. Accordingly, I am satisfied that the Second Defendant has cleared away any suspicion arising from the circumstances of the preparation and execution of the codicil.
5. I therefore support a grant of probate on (sic) the Will and Codicil in solemn form of law if that is still sought by the Second Defendant."
142 The balance of the Plaintiff's Concession Outline set out the plaintiff's submissions on costs. These were directed to an argument that the court exercise its discretion only to the extent that he be ordered to pay half of the second defendant's costs to be taxed.
143 When the hearing did resume the plaintiff confirmed that following the hearing to that point, and having reviewed the evidence, he had formed the view that the second defendant had satisfactorily removed any suspicion that attached in his mind and he was personally satisfied that the document was Alf's codicil, that he intended it to be and that in all probability he had full testamentary capacity at the time of executing it. The plaintiff then went on to elaborate upon why he had concerns about Alf's condition and the validity of the codicil. In short these reasons included that he understood Alf had some trauma or deterioration in his condition in or around October 1988, there had been no assessment of his testamentary capacity at the time of the execution of the codicil which would in all probability have removed any doubts the plaintiff had, and there was evidence subsequently of dementia. His concern was that Alf had become the instrument and was under the control, of the second defendant. Having mentioned a number of factors the plaintiff then concluded (T 633):
"Those factors all gave rise in my mind to a concern about whether this will did represent Alf's wishes and whether he had testamentary capacity at that time. However, from the evidence of Mrs Kurelic - and I accept that my cross-examination of her was very thorough and quite strenuous, and in light of the view that I have come to I apologise for having to put her through that and through this whole trial - I came to the view not only from what she was saying but from my knowledge of Alf as a person over the years and how he would normally deal with circumstances, Mrs Kurelic was not in control of Alf, that Alf was directing Mrs Kurelic and it necessarily followed from that conclusion that she had removed any suspicion that was in my mind in relation to the circumstances.
Once I reached that conclusion, which was following my review of the evidence yesterday and Mrs Kurelic's evidence in cross-examination yesterday, and importantly also her evidence in re-examination yesterday, on reflection and in conjunction with the testimony she had given in the prior 2 days, I came to that conclusion and immediately that had become firm in my mind I communicated it to the solicitor for the second defendant. It was not communicated in any way as a settlement offer or as a proposal; it was a straightforward acknowledgment that I accepted that this was Alf's testamentary instrument and that I would not oppose grant of the will and codicil in solemn form."
144 Mr Davis opposed the plaintiff's application with respect to costs. He foreshadowed the second defendant would be seeking orders that the plaintiff pay the second defendant's costs of the action and counterclaim on an indemnity basis, that the limits set in the fourth schedule to the Supreme Court Rules be removed, and that there be a certificate for counsel. He sought an adjournment to that afternoon.
145 I then made orders as to the disposition of the claim and counterclaim. Having read the witness statements and the relevant documentation, and having had the opportunity of hearing the witnesses, particularly in cross-examination, I was positively satisfied of the due execution of the will and codicil and that at the relevant times Alf had testamentary capacity and the necessary appreciation of what he was doing. In those circumstances I pronounced in solemn form for the will and codicil dated 25 June 1987 and 22 November 1988 respectively and adjourned the question of costs for hearing that afternoon.
146 Against the foregoing rather lengthy but necessary background, I now turn to the authorities relating to costs in these circumstances.
147 The relevant provision is O 66 of the Rules of the Supreme Court 1971. It has been accepted that the law in this jurisdiction applicable to costs at a probate action follows the English authorities. In Re Green [1969] WAR 67, Wolff CJ pointed out (at 83) that the general rule in probate actions is that costs follow the event, citing Twist v Tye (1902) P 92 and Spiers v English (1907) P 122. He said there are two types of case where that general rule may be departed from, they being first where the litigation has been brought about through the conduct of the testator and second, where the parties who have failed have reasonably been led into the litigation by a bona fide belief in their case and have therefore felt it desirable to enquire into the testamentary dispositions of the testator.
148 Twist v Tye (supra) was a case in which the executors, who were also residuary legatees, propounded wills which in the result were pronounced against by a jury on the ground of testamentary incapacity and want of knowledge and approval of their contents. The testatrix was an old woman of about 90 or 91 years of age at the time of execution of the documents. The plaintiffs (the three executors) had acted for her for some time as solicitors or trustees. They were all fully aware of her circumstances and condition. About a month before the execution of the will the testatrix' daughter died and that event had a large effect on her mind. Thereafter the three plaintiffs looked after her affairs. They were aware she was in the habit of writing out various documents in the nature of wills, some of which were destroyed on the instructions of one of them. Sir Gorrell Barnes J held that the plaintiffs could not be said to have been honestly led into the litigation by the fact that the testatrix seemed to all outward appearance to be capable of managing her affairs - the facts being quite the contrary: she was a very old woman; she was not managing her own affairs; they were being managed for her, and being managed for her by them. He held that in those circumstances the costs ought not to be paid out of the estate. As to the costs of the defendants, his Honour said (ibid 97-98):
"The point which remains for consideration is whether the costs ought not to follow the event. When all the facts are considered and what was in the cognisance of the parties, it cannot be contended that they were led into the belief that this old lady was capable of managing her own affairs and of making these wills. The truth is, as I said before, they took a view and acted upon it; and when it came to a fight between themselves, on the one side, and the persons interested under an intestacy, on the other side, they stood to win one way and to lose the other. I see, therefore, nothing to warrant a departure from the ordinary rule. Costs must follow the event."
149 Spiers v English (supra) was a peculiar case. The testatrix was thought to be a pauper, but after her death was found to have had considerable funds in two banks. The defendant beneficiary came to be acquainted with her and made the will in question in circumstances which showed that he did not know she had anything substantial to dispose of. Her relatives, finding out after her death that she had a considerable sum of money, were naturally anxious to get rid of the will. The plaintiff alleged the will was not duly executed, the deceased did not know and approve of the contents of it and that its execution was obtained by undue influence of the defendant. A jury found for the defendant on all issues and the court pronounced for the will. On the question of costs, Sir Gorrell Barnes P said (ibid 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 shown 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."
150 In holding that the plaintiff had not shown any ground on which there should be an order that the plaintiff's costs should be paid out of the estate nor to interfere with the ordinary rule that costs follow the event, Sir Gorrell Barnes P observed (ibid at 124) that the whole case really turned upon the position of the defendant who had been cross-examined with a view to showing anything that would support the pleas of undue influence and want of knowledge and approval; and when that witness left the box without having been touched in cross-examination the case was, to the mind of the learned President, practically at an end.
151 There is a distinction between matters which are for a Taxing Master as going to the quantum of costs allowable and for the trial Judge in determining where the burden of costs should lie. A failure to appreciate that distinction resulted in the trial Judge's exercise of discretion with respect to costs miscarrying in Re Herbert [1990] NTSC 26; (1990) 101 FLR 279. In that case there were two appeals: two were in relation to the granting of probate of the wills of two elderly brothers, the third related to the dismissal of an action to set aside dispositions made by the brothers as to their lands. Probate had been granted to the sole beneficiary who received a huge bequest. He was the accountant and financial adviser to the brothers as well as their universal assistant and had been closely involved in urging the brothers to make the wills, in bringing the wills into existence and making the arrangements for their execution. At the trial, the two wills were contested on the grounds of lack of testamentary capacity, lack of knowledge and approval by the respective testators and undue influence and fraud on the part of the beneficiary.
152 The trial Judge entertained a strong suspicion throughout the hearing and for some time afterwards concerning lack of knowledge and approval by the testators. Nonetheless, having considered all of the evidence he was satisfied that suspicion had been allayed. The beneficiary was held (albeit innocently) responsible for the suspicion which had existed. The trial Judge considered that the beneficiary should have the costs of probate actions, but in order to reflect his opinion that there was good reason to bring a properly proportioned action against the wills, he discounted the costs by 20 per cent.
153 The Full Court of the Federal Court allowed the appeal in respect of the costs of the probate actions and ordered that the respondent (beneficiary) and the appellants be awarded their costs out of the estates, to be assessed on an indemnity basis.
154 There is in Re Herbert an exhaustive, and with respect, most helpful, analysis of the authorities relating to costs in probate actions (particular by Kearney J). At 290, Gallop J referred to Nock v Austin [1918] HCA 73; (1918) 25 CLR 519 in which the relevant law was summarised by Isaacs J. Nock v Austin was a case in which the two plaintiff executors, both of whom were solicitors, one having taken the testator's instructions and the other having drawn the will, were substantial beneficiaries. They were nonetheless successful in obtaining a grant of probate. The court held that as the circumstances led reasonably to an investigation and as the fact that those circumstances aroused suspicion was largely due to the conduct of the plaintiffs in not seeing that the testator had independent advice, the defendant should have the costs of her unsuccessful opposition out of the residue in which the plaintiffs alone were interested. At 528 (ibid) Isaacs J said:
"The relevant law is not doubtful. It may be thus stated:
(1) In general, where there appears no circumstance exciting suspicion that the provisions of the instrument may not have been fully known to and approved by the testator, the mere proof of his capacity and of the fact of due execution of the instrument creates an assumption that he knew of and assented to its contents (Barry v Butlin [1838] EngR 1056; (1838) 2 Moo PCC 480 at 484; [1838] EngR 1056; 12 ER 1089 at 1091; Fuller v Andrew (1875) LR 7 HL 488).
(2) Where any such suspicious circumstances exist, the assumption does not arise, and the proponents have the burden of removing the suspicion by proving affirmatively by clear and satisfactory proof that the testator knew and approved the contents of the document (Baker v Batt [1838] EngR 643; (1838) 2 Moo PCC 317 at 321; [1838] EngR 643; 12 ER 1026 at 1027; Tyrrell v Painton [1894] P 151; Shama Chum Kundu v Khettromoni Dasi LR 27 Ind App 10 at 16).
(3) If in such a case the conscience of the tribunal, whose function it is to determine the fact upon a careful and accurate consideration of all the evidence on both sides, is not judicially satisfied that the document does contain the real intention of the testator, the Court is bound to pronounce its opinion that the instrument is not entitled to probate (Baker v Batt at 320; 1027; Fulton v Andrew (supra)).
(4) The circumstance that a party who takes a benefit wrote or prepared the will is one that should generally arouse suspicion and call for the vigilant and anxious examination by the Court of the evidence as to the testator's appreciation and approval of the contents of the will (Barry v Butlin (supra), and Fulton v Andrew, per Lord Shaw in Low v Guthrie [1909] AC 278 at 284).
(5) But the rule does not go further than requiring vigilance in seeing that the case is fully proved. It does not introduce a disqualification (per Lord James in Low v Guthrie at 282-283).
(6) Nor does the rule require as a matter of law any particular species of proof to satisfy the onus (Barry v Butlin at 484; 1091).
(7) The doctrine that suspicion must be cleared away does not create 'a screen' behind which fraud or dishonesty may be relied on without distinctly charging it (Lord Loreburn LC in Low v Guthrie [1909] AC 278 at 281-282)."
155 In the course of his exhaustive consideration of the authorities, Kearney J in Herbert (supra at 306) referred to what he described as "the seminal discussion of principle" by Sir James Wilde (as he then was) in Mitchell v Gard (1863) 3 SW & TR 275; 164 ER 1280:
"His Lordship there said (at 277; 1281) that: 'The basis of all rules on this subject should rest upon the degree of blame to be imputed to the respective parties.' However, he then explained that the function of the Probate Court was such that despite a lack of fault in the testator or beneficiaries, the Court may relieve 'the losing party from costs, if chargeable with no other blame than that of having failed in a suit which was justified by good and sufficient grounds for doubt'.
In Brown v McEncroe (1890) 11 LR (NSW) Eq 134, Owen J succinctly stated the principles applicable as follows (at 145):
'The principles governing the adjudication as to costs in [probate] suits appear to be that, where the litigation is caused by the conduct of the testator, the estate must bear all the costs of both parties. Where neither the testator nor the persons interested in the residue are to blame, and the defendant has reasonable ground for impeaching the will, no order will be made as to costs, but where there is no reasonable ground for impeaching the will the defendant will be ordered to pay the costs.'"
156 His Honour went on to point out that in the discretionary award of costs in probate actions, the exceptions are as much a matter of settled practice as is the usual "event" approach, so that when considering the award of costs in a probate action the court must first decide which approach is indicated by the facts of the case: the "event" approach or one of the exceptions. That having been decided there is then a discretion as to the award of costs.
157 At p 311 Lord Kearney J again referred to the judgment of Sir James Wilde in Mitchell v Gard (which he described as "the seminal case in the modern approach to costs in the probate jurisdiction") and set out the following quotation from his Lordship (Mitchell v Gard, supra at 278; 1281):
"From these considerations, the Court deduces the two following rules for its future guidance: first, if the cause of litigation takes its origin in the fault of the testator or those interested in the residue, the costs may properly be paid out of the estate; secondly, 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."
158 In the present case the plaintiff acknowledges that the general rule in probate actions is that costs follow the event but contends that this falls within both the exceptions. I accept that it would be sufficient for him to show "adequate reason for an order of a different character" (see Kearney J in Re Herbert supra at 305) and that it is first necessary to decide which approach is indicated by the facts of the case.
159 The plaintiff lists the following factors as in his submission demonstrating that the litigation had been brought about by the conduct of the testator or the second defendant:
1. Alf gave instructions to the second defendant to have the will prepared rather than to, for example, the first defendant who was an independent executor;
(a) to confirm that they were being instructed by Alf rather than by the second defendant.
(b) to conduct an assessment of Alf to ascertain whether or not he had testamentary capacity, and in particular, failed to inquire into the nature and value of Alf's estate, the natural claims he might be expected to give effect to, the names of living relatives and the relationship Alf had to the persons named in the will and codicil and the reasons Alf was making the changes proposed;
(c) failed to adequately test Alf's knowledge and understanding of the testamentary instrument by for instance asking him to explain in his own words, or by such other means as were available to him what testamentary dispositions he wanted to make and asking open rather than exclusively closed questions;
(d) in his testimony the solicitor Mr James implicitly acknowledged that his firm ought to have tested Alf's testamentary capacity but admitted that the testing performed was not directed to that issue, and
(e) Alf's condition viewed objectively coupled with the second defendant's significant personal interest ought reasonably to have alerted the second defendant to the need for greater care in formalising Alf's testamentary wishes and to question, for example, his reason for excluding his sister who had been reliant on him for regular monthly support.
160 Mr Davis submits that for the purpose of deciding whether or not this case falls within the two exceptions to the normal rule, the relevant time to consider the plaintiff's position is the date of institution of the proceedings. I think that must be right, although it must also be relevant to have regard to any knowledge or reasonable belief gained subsequently.
161 Mr Davis submitted that it should be inferred that on his own observations, the plaintiff must have been able to observe that Alf was possessed of testamentary capacity. For this inference he relies on the fact that Alf signed a transfer of land form in favour of the plaintiff and his brother in 1992 in relation to which there was a document (exhibit D13) in the hand of the plaintiff and signed by Alf. I consider that to be a fair inference although of limited assistance for present purposes: testamentary capacity can vary from time to time and it is with events in November 1988 that we were here concerned. This submission by Mr Davis was directed to the first reason given by the plaintiff for conceding the action, namely his personal knowledge and observations of Alf.
162 The other main reason advanced by the plaintiff for his change of view was the evidence given by the second defendant at trial. In relation to that, Mr Davis submitted that the plaintiff had known all along the reality of the relationship between Alf and the second defendant. He referred to the eulogy (exhibit D11) delivered by the plaintiff at Alf's funeral and to a subsequent letter dated 9 February 1995 following the funeral (exhibit D12).
163 In his eulogy at Alf's funeral the plaintiff said:
"To Maria and all her family who adopted him as one of their own, I express his love and affection for you all.
To Maria in particular: you cared and provided for Alf's needs for love, care and companionship during the long period of his declining health with a love, devotion and selflessness that few men deserve. You were to him more than a daughter, more than a nurse and more than a friend. His love, affection and appreciation for you was without measure. Although I am sure you know this and that he expressed it to you in silent ways, I am equally sure he would wish it said."
164 In his letter dated 9 February 1995 the plaintiff wrote to the second defendant:
"Dear Maria,
Thank you kindly for the copy of Alf's will and codicil. I wish to assure you that Paul and I are very happy that Alf, as we expected, provided for you prominently by his will.
We are both flattered that he thought highly enough of us to single us out for provision. Alf did so much to protect us and our interests in the 1970's and without his efforts we would have received little if any of what our father left for us. As you know, we are now carrying on that fight. The legacies he gave to us will be of great assistance in our endeavour.
While Cathy never knew Alf in better times, she had a natural empathy for him and was better able to communicate with him than either Paul or I. All of us thank you for the quality you brought to Alf's life over the many years as his health deteriorated. He, like so many others, did not deserve any of the pain or suffering he had to endure. But few people in his position have someone willing to dedicate so much time, love, attention and companionship as you gave him, in addition to managing all his business and personal affairs. He was so very fortunate to have you and we know that his love and appreciation for you must be limitless.
We will always think of you as one of his family."
165 Mr Davis then referred to the original statement of claim and the prolific amendments made thereafter. He contended that all that was initially pleaded was that the plaintiff required the defendant to prove that at the date the will and codicil were executed, Alf was of sound mind, memory and understanding and knew and approved the contents of them. He said there were no facts asserted nor allegations of absence of testamentary capacity or lack of knowledge or approval of the contents of the will at that time. Allegations to that effect were made over the course of the years from December 1996 to May 2000. He submitted this indicates that the exercise has really been no more than a fishing expedition on the part of the plaintiff. He then turned to the particular matters relied upon by the plaintiff in support of the latter's contention that the litigation had been brought about by the conduct of Alf or the second defendant.
166 Without dealing with each factor separately, I think it fair to say that Mr Davis' submissions tended to go more to the ultimate determination of these matters following forensic examination at trial than to them as circumstances giving rise to a suspicion or apprehension of lack of testamentary capacity or awareness. For example, to mention only two of them, Elliott's file note and the evidence he gave in relation to his attendance upon Alf for the execution of the codicil initially left open concerns that Elliott's observations and questioning of Alf were not such as to confirm Alf's understanding of what was in the document nor that it reflected his cognisant intentions. This was so particularly in light of the evidence that Alf had great difficulty communicating verbally and that the only questions asked of him by Elliott called for the answer "yes". In any event, those matters concern what was done by Gibson & Gibson, not to any conduct by the testator or the second defendant.
167 I must ask myself first whether the ordinary rule that costs follow the event should apply, or whether the plaintiff has shown adequate reason for an order of a different character: and whether the first ground advanced for that, namely that the litigation was brought about by the conduct of the testator or the second defendant, has been made out.
168 I do not think it has. This was not a case where the beneficiary drafted the testamentary instrument and then caused it to be executed without the involvement of independent legal practitioners. True it was that the changes proposed to the 1987 will operated to the benefit of the second defendant; but she delivered the instruction document to the solicitors and left it to them to do whatever was required.
169 Nor do I accept Gibson & Gibson failed to confirm they were being instructed by Alf rather than by the second defendant. They were under no misapprehension about that. They recognised it was Alf who was the client and their dealings with him (albeit brief and confined only to the preparation and execution of the codicil) were conducted on that basis.
170 If prudence alone might suggest the factors identified by the plaintiff at items 2(b) to (e) inclusive have some merit, none of them go to any conduct by the testator or the second defendant. In short, I am not satisfied the plaintiff has demonstrated the litigation was brought about as a result of any relevant conduct on the part of Alf or the second defendant.
171 The factors listed by the plaintiff as supporting his submission that the case falls within the second exception to the "events" rule, namely that he had been led reasonably into the litigation by a bona fide belief in his case and had therefore felt it desirable to inquire into the codicil were:
1. the circumstance of the preparation of the codicil on the second defendant's instructions;
2. the contrast between (as the plaintiff put it) the careful and professional manner in which the 1987 will had been prepared utilising Alf's independent financial adviser and usual solicitor with no involvement by the second defendant as against the "casual, rushed" preparation and execution of the codicil 16 months later on the instructions of the residuary beneficiary of the second defendant without the involvement, assistance or intervention of Alf's usual advisers;
3. the communication from the solicitor Mr James and Mr Elliott confirming there had been no assessment of testamentary capacity at the date of the codicil;
4. the absence of any formal assessment of testamentary capacity proximate to the execution of the will (the word "will" appears in the Plaintiff's Concession Outline but I understand him to mean "codicil");
5. indications from cheque records, Alf's speech deterioration and medical reports of a possible trauma having been suffered by him shortly before the date of execution of the codicil;
6. evidence of statements by Alf contrary to observable facts;
7. the medical records of Sir Charles Gairdner Hospital and the assessment of Dr Morgan raising serious doubts as to the issue of his testamentary capacity in early 1989;
8. the defence pleaded that Alf had typed the instructions for the codicil - although at trial that allegation was not persisted with;
9. substantial transfers from Alf to the second defendant in December 1990 and May 1991 depleting the estate, Alf having previously been identified as suffering from dementia in February 1990.
172 Mr Davis pointed out that for the plaintiff to say he was led reasonably into litigation by a bona fide belief in his case is to mis-state the test which is that on an objective assessment it was reasonable for him to institute the proceedings. It may be that there is no real point of distinction here - both formulations are governed by the requirement of reasonableness. Be that as it may, the plaintiff's formulation is in accord with authority (see eg Twist v Tye (supra) at 93-94 and Re Herbert (supra) at 312).
173 Once again, as a general proposition, it seems to me that Mr Davis' submissions go more to the circumstances as ultimately proved rather than as matters negating a reasonable suspicion or apprehension that the codicil may not have been a valid testamentary instrument and which therefore ought to be properly proved.
174 I should say at once that the factors enumerated as 6 and 8 are quite unsustainable - the latter reflects the wording of the pleading it is true, but it had been made quite clear before Master Bredmeyer on 10 November 1998 that the second defendant was asserting only that Alf had handed typed instructions to her, not that he had typed them himself - and the point was never raised in evidence. As to 7, I do not consider Dr Morgan's report dated 11 December 1997 (exhibit C1) could on any reasonable view have given rise to a concern that Alf did not have, or may not have had, testamentary capacity in November 1988. Dr Morgan had reviewed Alf in April 1989 and came to the conclusion it was not possible to confirm nor refute Alf's likely testamentary capacity in November 1988; although he added that by April 1989 his mobility was very limited and he was quite dysphasic, the doctor felt his intellectual function was well preserved. However it seems the plaintiff had managed to obtain a draft of Dr Morgan's report in which the doctor had written:
"It seems unlikely that by April 1989 he would have been in a position to have testamentary capacity."
175 Dr Morgan was queried about that and changed it to read it was unlikely Alf:
"... would have been in a position to communicate his wishes."
176 The difference is obviously of critical relevance and in the absence of some satisfactory explanation (which apparently was not forthcoming to the plaintiff) would no doubt have greatly fuelled his concerns.
177 The plaintiff's factor no 3, whilst strictly accurate, is not an entirely fair and full statement of the position. The evidence demonstrates that James instructed Elliott to confirm Alf's understanding and approval of the codicil but did not specifically require him to make any determination of Alf's testamentary capacity; Elliott's file note, exhibit D5 (which I accept as an accurate contemporaneous record) shows an appreciation that the solicitors' instructions had been received from the principal beneficiary whose entitlement would be substantially increased by the codicil. It records that his specific instructions were to ensure the contents of the codicil truly represented the testator's testamentary intention, and that he satisfied himself that was so.
178 There was nothing in Elliott's dealing with Alf which suggested the latter did not have testamentary capacity.
179 Factors no 4 and no 5 and the Sir Charles Gairdner Hospital records referred to in no 7 all go to the issue of testamentary capacity but in my view lack any factual cogency. Against the background of the evidence and the course of the proceedings in particular it is clear factors no 1, no 2 and no 9 really go to issues of fraud and/or undue influence - which, as has already been observed, had not been pleaded. The very firm impression I am left with from these proceedings overall is that what the plaintiff was really seeking to establish was that the second defendant had taken advantage of her relationship with Alf to such an extent that the codicil was the product of undue influence and that most if not all the inter vivos transactions from Alf to the second defendant were either fraudulent or the result of undue influence by her. His factual basis for this was that she was the residuary beneficiary under the 1987 will, had also received very substantial gifts of property and money from Alf whilst he was alive and it was she who instructed new solicitors to prepare the codicil, reducing (inter alia) the plaintiff's legacy by $50,000 and increasing the benefit to her by $220,000. On the face of it, an apprehension that there may have been sufficient suspicion of undue influence or fraud could arguably have been maintained as justifying the action, but the plaintiff was never prepared to plead his case that way. Those matters therefore were, and remain, irrelevant - although in the end the evidence allayed any such suspicions.
180 I remind myself of what was said by Sir J P Wilde in Mitchell v Gard, supra, at 279; 1281-1282:
"It is of high public importance that doubtful wills should not pass easily into proof by reason of the cost of opposing them. It is of equal importance that parties should not be tempted into fruitless litigation by the knowledge that their costs will be defrayed by others. These opposite reasons appear to have alternatively swayed the decisions to be found in the books. It is the desire of the court to keep both in view, while yielding to neither, ..."
181 But the present case falls into a category of its own.
182 I am satisfied that although the fundamental objective circumstances recited above were such as to justify the plaintiff requiring the defendants to dispel any suspicion of undue influence, the plaintiff was not prepared to actually plead that. He maintained the action on the basis of putting the defendants to proof of Alf's testamentary capacity, knowledge of his estate and awareness of the effect of the codicil. Yet it is, I think, as I have said, clear that what the plaintiff was always seeking to do in fact was to mount a flanking attack to show the codicil was the product of undue influence on Alf by the second defendant and that virtually all of the inter vivos gifts from Alf to her, both before and after the date of execution of the codicil, were vitiated by fraud or undue influence. His capitulation on the morning of 23 March 2001 was due in my view not only to the cogency of the evidence of Alf's testamentary capacity, knowledge and awareness, but to the fact that because of the rulings made on 21 and 22 March regarding the Clay Schedules, the plaintiff was not going to be able to mount the flanking or collateral attack which I am satisfied was his main purpose.
183 In these circumstances the plaintiff has not in my view shown any adequate reason why either exception to the "event" rule should apply; indeed, I am satisfied the proper order is that costs should follow the event and that they should be the full costs.
184 The second defendant seeks costs on an indemnity basis. The difference was explained by Martin J (as he then was) in Re Herbert, supra at 319:
"Costs in a proceeding which are to be taxed shall be taxed either on (a) the standard basis or (b) the indemnity basis. On a taxation on the standard basis there is to be allowed a reasonable amount in respect of all the costs reasonably incurred, and any doubt which the taxing master has as to whether the costs were reasonably incurred or were reasonable in amount, shall be resolved in favour of the paying party. On a taxation of costs on the indemnity basis, all costs shall be allowed except to the extent they are of an unreasonable amount or have been unreasonably incurred, and any doubts which the taxing master has as to whether the costs were reasonably incurred or were reasonable in amount shall be resolved in favour of the receiving party."
185 (See also Sir Robert Megarry VC in EMI Records Ltd v Ian Cameron Wallace Ltd [1982] 2 All ER 980, especially at 899-990 and Re Bond Corp Holdings Ltd (1990) 1 WAR 465).
186 Martin J made the above remarks in the context of the Supreme Court Rules of the Northern Territory. In this State there is nothing in the Supreme Court Rules expressly providing for indemnity costs orders. The practice is that such orders may be made, however, as may inter partes costs orders on a solicitor/client basis (see generally Seaman "Civil Proceedings in Western Australia" [66.1.5] - [66.1.16D]). Because the Rules make no express provision for such orders it is necessary for the form of any order to specify clearly what is recoverable (Bond Corp Holdings Ltd, supra. A case must be unusual or "a very special case" before indemnity costs will be ordered: Bartlett v Barclays Bank Trust Co Ltd [1980] Ch 515, 547; Colgate-Palmolive Co v Cussons [1993] FCA 536; (1993) 46 FCR 225, 233, although costs on an indemnity basis are becoming more frequently available in some Australian States: Singleton v Macquarie Broadcasting Holdings Ltd (1991) 24 NSWLR 103. This seems to be so particularly in commercial litigation and due to the dislike of the courts for the practice of using the often substantial gap between party/party and solicitor/client costs in bargaining for commercial advantage (see the observations of Mahoney JA in Huntsman Chemical Company Australia Ltd v International Pools Australia Ltd (1995) 36 NSWLR 242 at 257). That of course is not a consideration here; and in any event because the costs regime in force in Western Australia is the same both as between solicitor/client and party/party, the same rationale does not apply because the difference between the two is much less significant than in those States where the gap is substantial (see Malcolm CJ in Anfranks Nominees Pty Ltd v Connell (1991) 6 WAR 271 at 284).
187 Indemnity costs may be ordered where litigation is fought unreasonably by the party against whom the order is contemplated, where the proceedings have been instituted unreasonably (cf Wheeler J in Co-operative Bulk Handling Ltd v Australian Manufacturing Workers' Union (WA Branch), unreported; SCt of WA; Library No 970190; 30 April 1997) or where the use of aggressive, discourteous and non-cooperative behaviour leads to the incurring of delay, inconvenience and needless costs.
(per Ipp J in Unoil International Pty Ltd v Deloitte Touche Tohmatsu [No 2] (1997) 18 WAR 190, 194).
188 In his submissions Mr Davis referred to the inordinate number of interlocutory applications by the plaintiff and to the fact that many of them were directed to obtaining documents he wanted for his preparation of the Clay Schedules. I note that in most instances costs orders were made on the interlocutory applications; it is not for me to revisit them now. Taking a broad view, I do not regard those instances in which costs orders were not made as militating in favour of a global order for indemnity costs.
189 The crux of Mr Davis' submissions seeking indemnity costs was the proposition that the proceedings were irresponsibly brought at no expense to the plaintiff other than disbursements and in the knowledge that there was no money left in the estate to defend them and that the cost of defending them would be very great. He submitted refusal to make an indemnity costs order in these circumstances would work a significant injustice.
190 I accept the plaintiff's submission that the fact that as a solicitor he represented himself and so (although there was an opportunity cost) he was not actually incurring professional expenses, is not a relevant consideration. I also accept that although the second defendant was entitled to withhold the report of Dr Morgan from the plaintiff when he first sought it (as Master Sanderson ruled), its production to the plaintiff could not conceivably have disadvantaged the second defendant and could well have gone some way to overcoming the plaintiff's concerns. Overall, I would make the observation that this case was hard fought in the adversarial sense by both sides from the outset and in my opinion unnecessarily so. There was some legitimate justification for the plaintiff seeking to have the second defendant allay any suspicion of undue influences, but that was not the way he approached it: and the way he did approach it was oblique and unjustifiable. Even so, the way in which the case was conducted by the second defendant and her lawyers was such as to create further suspicion in the mind of the plaintiff and heighten the suspicions he already had. In short, so far as the tortuous conduct of the proceedings is concerned, there is in my view fault on both sides. Under the circumstances I am not prepared to order that the costs payable by the plaintiff to the second defendant be paid on an indemnity nor on a solicitor/client basis.
191 One consequence of the nature of the case sought to be advanced by the plaintiff both through the interlocutory applications and on the trial proper was that the second defendant had to address aspects which ultimately were not pursued. Whether what was done in that regard by the second defendant's lawyers was reasonable or not, and whether costs charged for such work are reasonable, will fall to be determined on taxation. That will be so whether the Fourth Schedule limits apply or not. In the circumstances I consider it would be unjust to confine the second defendant's costs to those limits and I will order that they be removed. It is also appropriate that there be a certificate for counsel and I will make that order also.
1. The plaintiff pay the second defendant's costs of the claim and counterclaim (including reserved costs) to be taxed as between party and party.
2. For the purposes of taxation the limits in the Fourth Schedule to the Rules of the Supreme Court be removed.
Clay
Karlson & Anor [2001] WASC 141
(1924) 34 CLR 558
(1942) 66 CLR 295
(1955) 29 ALJR 179
(1988) 14 NSWLR 698
(1941) 66 CLR 277
(1990) 101 FLR 279
(1918) 25 CLR 519
(1990) 1 WAR 465
(1993) 46 FCR 225
(1991) 24 NSWLR 103
(1995) 36 NSWLR 242
(1991) 6 WAR 271
(1997) 18 WAR 190