de Angelis v Laundy

The Hearing 16The matter commenced on 31 March 2014 with the Plaintiff's senior counsel opening the case. Following the opening, rather than immediately dealing with the pleadings and affidavits, one of the witnesses, Mr Michael Kennedy, a solicitor, to whom I shall refer, who was from Wagga Wagga, was called to give evidence. Following the completion of his cross-examination, other witnesses, for the Defendant, were called and were cross-examined. The evidence of those witnesses, including cross-examination, was completed at about 3:35 p.m. on 1 April 2014. Rather than commencing the cross-examination of the Defendant, which could not have been completed within the day, the remaining pleadings and affidavits were read and the objections were dealt with. 17On the morning of the third day of the hearing, before any cross-examination commenced, senior Counsel for the Defendant informed the Court and, shortly before doing so, the Plaintiff's legal representatives, that the Defendant no longer sought to propound the 2012 Codicil. 18Even though the Plaintiff, in the alternative, had sought Probate of the 1995 Will and the 2012 Codicil to her, both parties accepted, in the circumstances, that she did not wish to proceed with the alternative claim for relief. 19Then, the sole question that the Plaintiff wished to agitate related to the costs of the proceedings. Initially, she sought an order that the Defendant, personally, should pay her costs, calculated on the indemnity basis, but, after a short adjournment, I was informed that she sought an order that he should pay her costs of the proceedings, calculated on the ordinary basis. 20The Defendant submitted that each party's costs, calculated on the indemnity basis, should be paid out of the deceased's estate. Since, broadly speaking, each of the parties is to share the residuary estate, I enquired whether, in those circumstances, it would be less cumbersome for there to be no order as to costs, to the intent that each party would bear her, or his own costs, respectively, of the proceedings. The Defendant accepted this as a rational alternative but the Plaintiff did not. 21Because counsel for the Plaintiff required further instructions upon the identity of the person to whom the grant of administration was to be made, and as each party wished to consider the submissions to be made on costs, I adjourned the matter until today.

The Background Facts 22Even though the matter is not proceeding, it is necessary to set out some background facts. The following facts (except where stated) are uncontroversial. It is necessary to state these facts in light of the orders that are to be made. 23The deceased died on 2 May 2012. She was then aged 97 years, having been born in April 1915. 24The deceased left property in New South Wales. 25The deceased married Arthur Samuel Laundy in about 1937. There were only two children of their marriage, being the Plaintiff and the Defendant. 26The deceased's husband died in an aircraft accident in 1969. By his Will, the shares held by him in LEPT and in LTPT were devised to the deceased. 27On 8 January 1974, the deceased made a Will ("the 1974 Will") in which she appointed the Plaintiff and the Defendant as executors and trustees, and then gave her entire estate to her trustees, upon trust, to divide it into two equal shares, one for the Plaintiff and such of her children and her grandchildren as survived the deceased and who were living on the first vesting day (as defined) and one for the Defendant and such of his children and his grandchildren as survived the deceased and who were living on the first vesting day. There was discretion given to the trustees to distribute income and capital in such shares as the trustees, in his, her or their discretion, determined at any time prior to the first vesting day. 28The deceased executed what she described as "the First Codicil" on 26 June 1992 ("the 1992 Codicil"). By the 1992 Codicil, the deceased directed and declared that, if the Defendant exercised the option dated 26 June 1992 to purchase her shares in LEPT and LTPT (which were identified in the 1992 Codicil), then and in that event, the money paid to her estate by the Defendant, as the purchase price for those shares, was given and bequeathed to the Plaintiff. 29The Option, which was also dated 26 June 1992, relevantly provided that, in consideration of the sum of $1.00, the deceased granted to the Defendant (or in the event of his death, his personal representative), an option to purchase all her shares in LEPL (identified as comprising her 1 "E" share, 1 "F" share, 1 "A" and 1 "B" share) and all her shares in LTPL (identified as comprising her 1 "A" share, 1 "B" share, 50 "E" shares and 50 "F" shares), for the price specified and upon the following terms: "(a) The option may be exercised only within the period of three (3) months commencing the day after the date of death of [the deceased]. (b) To exercise the option [the Defendant] (or his personal representative), must give written notice to the executors of the will/estate of [the deceased], not later than three (3) months after the date of her death. (c) If the option be exercised, the price to be paid by [the Defendant] shall be the sum equal to one quarter of the value of the combined net assets of [LEPL] and [LTPL], as at the date of death of [the deceased] and which, in the event of dispute, shall be determined by an accountant appointed by the President for the time being of the New South Wales Division of the Chartered Accountants Institute of Australia, and who must in making his determination, value [the Hotel] ... including the improvements and all plant and furniture and land owned by either company, at the value (as at the date of [the deceased's] death) as determined by Mr R E Roberts, Licensed Valuer of Newcastle, or if he should be unavailable, as determined by a valuer of comparable experience appointed (if the parties cannot agree) by the President for the time being of the New South Wales Division of the Australian Institute of Valuers and Land Economists. (d) The price of the said shares, determined as aforesaid, shall be paid by [the Defendant] on completion of the purchase, which shall take place not later than six (6) months after the date of exercise of option." 30The attesting witness to the deceased's signature on the Option appears to have been Thomas Owen Jones, then of Messrs Freehill Hollingdale & Page (now known as Herbert Smith Freehills). (For reasons to which I shall come, I am satisfied that he is the attesting witness to the deceased's signature on the Option. In any event, there was no suggestion to the contrary.) 31By the 1995 Will, comprising five pages, the deceased revoked any prior wills and testamentary dispositions she had made. As stated, she appointed each of the Plaintiff and the Defendant to be the executors of her Will and the trustees of her estate. She bequeathed her jewellery to the Plaintiff absolutely. 32Clause 4 of the 1995 Will, relevantly, provided: "I GIVE DEVISE AND BEQUEATH all my shares in Laundy Enterprises Pty Limited and in Laundy (Trading) Pty Limited ('the said shares') unto my trustees UPON TRUST to hold the said shares on and subject to the following trusts: (a) If my said son ARTHUR HAROLD LAUNDY (or in the event of his death his personal representative exercises his option to purchase the said shares pursuant to the agreement made 26 June 1992 (a copy of which is now signed by me and the witnesses to this will for identification and which I hereby declare binds my trustees) my trustees shall hold all money received by them consequent upon the sale of the said shares to the said ARTHUR HAROLD LAUNDY or his personal representative) UPON TRUST for my said daughter ROBYN LESLEY DE ANGELIS if she survives me for her own sole use and benefit absolutely... (b) If neither the said ARTHUR HAROLD LAUNDY nor his personal representative purchases the said shares pursuant to the said option, then and in such event I DIRECT AND DECLARE my trustees shall hold the said shares UPON TRUST for such of them my children the said ARTHUR HAROLD LAUNDY and the said ROBYN LESLEY DE ANGELIS as shall survive me and if more than one in equal shares as tenants in common..." 33In Clause 5 of the 1995 Will, the deceased settled her real estate and the residue of her estate upon her trustees, and directed that, after payment of her debts, funeral and testamentary expenses, that estate should be held for the Plaintiff and the Defendant as tenants in common in equal shares. 34Clauses 6 and 7 of the 1995 Will provided: "6. I HEREBY CONFIRM AND DECLARE the option to purchase the said shares which I granted to the said ARTHUR HAROLD LAUNDY by agreement made 26 June 1992 continues in full force and effect and my trustees hold the said shares subject to the rights thereby conferred on the said ARTHUR HAROLD LAUNDY. 7. I EMPOWER my trustees at their absolute discretion to sell call in and convert into money the whole of my real estate and all my personal estate (other then my jewellery and the said shares) or any part thereof at such time and in such manner as my trustees may think fit AND I DECLARE that my trustees may postpone such sale calling in and conversion for such period as they may deem fit notwithstanding that until such sale calling in and conversion it may be of a wasting speculative or reversionary nature AND I DIRECT that my trustees shall not be held liable for any loss that may arise through the postponement of such sale calling in and conversion." 35The Plaintiff gave evidence that she recognised the signature, "V J Laundy", on the 1995 Will to be that of the deceased. She did not recognise the other signatures. The Defendant did not dispute that it was the deceased's signature. 36One attesting witness to the deceased's signature on the 1995 Will was identified on the 1995 Will as "S Edwards, Secretary, MLC Centre, Sydney". The signature of the other attesting witness is indecipherable. However, the parties agreed that word "solicitor" appears after the signature. 37Having recently been informed that the successor to the firm Freehill Hollingdale & Page no longer held contact details for Ms Edwards, the Plaintiff's solicitors made valiant efforts, the nature of which it is not necessary to repeat in these reasons, to locate Ms Edwards. Unfortunately, these efforts were unsuccessful. 38The Plaintiff also gave evidence that the deceased's solicitor at, or about, the time the 1995 Will was executed by the deceased, was Mr Jones. 39Other evidence that I have read reveals that Mr Jones was a partner at Messrs Freehill Hollingdale & Page from 1 July 1966 until 30 June 1993, following which he became a consultant from 1 July 1993 until 30 June 2002. Records of the firm (not produced but referred to in correspondence) reveal that Mr Jones did act in relation to the 1995 Will. However, there is no file note that shows that he and Ms Edwards did witness the 1995 Will. 40The evidence also revealed that Mr Jones died on 15 August 2002. 41A copy of a document bearing the name of Mr Jones and his signature, dated 26 March 1993, when compared to the signature on the 1995 Will, satisfies me, with the other evidence, that the signature of the second attesting witness on the 1995 Will is that of Mr Jones. 42This conclusion is strengthened when I compare the signature on the copy of the 1992 Codicil, which also appears to be the same. In relation to the signatures on the 1992 Codicil, I note that the copy of the safe custody card, in the name of the deceased, that was produced, and which bears the letters and numbers "TOJ: 35H 17/9/1992", contains the following note: "This Codicil was prepared by me from instructions by Mrs Laundy and was executed in the presence of Miss O'Rourke and myself. It was executed concurrently with the re-structuring of various family companies and as part of the transfer of the shares by her daughter Mrs de Angelis to her son Mr Arthur Laundy. We do not hold the will to which this document is a Codicil." 43The deceased did not marry after the 1995 Will was made. 44I am satisfied that the 1995 Will the will constitutes a valid testamentary instrument. I am also satisfied that it was duly executed by the deceased. 45The 2012 Codicil was in the following terms: "This is the SECOND CODICIL to the Last Will and Testament made on and dated 5 December 1995 ('my Will') of me VERONICA JULIA LAUNDY of Unit 9/45 Wolseley Road, Point Piper in the State of New South Wales, Widow, and with respect to which I made a FIRST CODICIL on 26 June 1992. 1.(a) I GIVE AND BEQUEATH all my shares in LAUNDY ENTERPRISES PTY LTD (ACN 000 212 617) and also in LAUNDY (TRADING) PTY LTD (ACN 000 497 254) of any nature or class to my son ARTHUR HAROLD LAUNDY together with all entitlements attaching thereto. MY son ARTHUR HAROLD LAUNDY has looked after my financial interests in the TWIN WILLOWS HOTEL, BASS HILL, NEW SOUTH WALES and my financial needs since the death of my late husband in 1992. Without him so acting I could not have continued to retain my interest in the hotel. His willingness and interest at all times in my wellbeing has been a matter of great consolation to me. Having regard to these matters I have made this decision. (b) THE preceding gifts and bequests referred to in this clause are contingent and conditional upon my son paying to my daughter ROBYN LESLEY DE ANGELIS an amount equal to a quarter (1/4) of the value, as at the date of my death, of the TWIN WILLOWS HOTEL, BASS HILL, NEW SOUTH WALES including the improvements, all plant and furniture and land relating thereto owned by either LAUNDY ENTERPRISES PTY LIMITED and/or LAUNDY (TRADING) PTY LIMITED. (c) SUCH amount must be paid to my daughter either three (3) weeks after the determination of that amount (as hereafter provided) or at the expiration of the period of nine (9) months calculated from the date of my death, whichever is the later (or such later time as my Executors may allow). (d) THE amount to be paid to my daughter shall be determined by MR. R E ROBERTS, Licenced Valuer of Newcastle, or if he should be unable for any reason to make that determination then as determined by a valuer of comparable experience appointed (if my son and daughter cannot agree on another valuer) by the President for the time being of the New South Wales Division of the Australian Institute of Valuers and Land Economists. 2. IN THE EVENT that payment is made to my daughter ROBYN LESLEY DE ANGELIS in accordance with the provisions of clause 1 of this Codicil then clauses 4 and 6 of my Will and clause 1 of the First Codicil dated 26 June 1992 shall be deemed to be and always to have been ineffective. ALSO upon such payment being made, I DIRECT my executors to rescind the option agreement referred to in clause 6 of my Will. 3. In all other respects I CONFIRM my Will. In witness whereof I have set my hand to this Second codicil to my Last Will and Testament dated 5 December 1995 on this 6th day of MARCH 2012." 46The attesting witnesses to the deceased's signature on the 2012 Codicil were James Douglas Thomas, Chartered Accountant, and Michael John Kennedy, solicitor. Each swore at least one affidavit read in the proceedings, but only Mr Kennedy was cross-examined by senior Counsel for the Plaintiff prior to the events of the third day. 47In these circumstances, determining where the costs of the proceedings should fall is not without difficulty. As in Nicholson v Knaggs [No 3 - Severance And Costs] [2009] VSC 328, at [31]: "Navigating a just path through the cross currents of competing claims, interests and principles is not a straightforward exercise."

The Legal Principles - Probate Proceedings 48The Civil Procedure Act 2005 (NSW), s 98(1), provides that, subject to the rules of court, and that, or any other, Act, costs are in the discretion of the court. The discretion is broad but not unconfined. It is a judicial discretion to be exercised on a principled basis. 49The Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"), r 42.1, provides that costs should follow the event, unless it appears to the court that some other order should be made as to the whole, or any part, of the costs. 50UCPR r 42.20(1) provides that, if the court makes an order for the dismissal of proceedings, then, unless the court orders otherwise, the Plaintiff (which includes the Cross-Claimant) must pay the Defendant's (which includes the Cross-Defendant) costs of the proceedings to the extent to which they have been dismissed. 51The court can only order otherwise if it makes a discretionary decision to depart from the default costs order provided for in r 42.20. This means that there is an onus on the party whose proceedings have been dismissed to make an application in respect of costs if it does not propose to pay the costs of the other party. It also means that there must be some positive ground or good reason for departing from the ordinary course. 52In McNamara v Bao San [2010] NSWSC 809, I wrote: "The following principles may be regarded as relevant in determining who is to bear the burden of costs in a case where the proceedings are dismissed before a final hearing ... (f) Where the proceedings are dismissed prior to any hearing on the merits, 'the Court cannot try a hypothetical action between the parties' to determine the question of costs: Australian Securities Commission v Aust-Home Investments Ltd [1993] FCA 585; (1993) 44 FCR 194 at 201; Minister for Immigration and Ethnic Affairs; ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 at 624; Metro Chatswood Pty Ltd v CRI Chatswood Pty Ltd [2007] NSWSC 1120 at [35]; (g) It may be necessary to analyse the whole of the proceedings to determine the appropriate costs order: Fordyce at [67] per McColl JA. A relevant consideration is whether the Plaintiff acted reasonably in commencing the proceedings and whether the defendant acted reasonably in defending them: Australian Securities Commission v Aust-Home Investments Ltd at 201 (cited with approval in Foukkare); all the relevant circumstances, and not just the fact of dismissal, should be considered; (h) It is also important to draw a distinction between cases in which one party, after litigating for some time, effectively surrenders to the other, and cases where some supervening event, or settlement, so removes, or modifies, the subject of the dispute that, although it could not be said that one side has simply won, no issue remains between the parties except that of costs. In the former type of case, there will commonly be lacking any basis for an exercise of the court's discretion otherwise than by an award of costs by the successful party. It is the latter type of case that usually creates problems, since there may be difficulty in discerning a clear reason why one party, rather than the other, should bear the costs: One.Tel Ltd v Deputy Commissioner of Taxation [2000] FCA 270; (2000) 101 FCR 548 at 553; cited with approval in Edwards Madigan Torzillo Briggs Pty Ltd v Stack [2003] NSWCA 302 per Davies AJA (with whom Mason P and Meagher JA agreed) at [5]; (i) The distinction between the two categories referred to above is often helpful in exercising the costs discretion, notwithstanding that neither category can be precisely defined, the boundary between them is unclear and other factors may be relevant: Bitanniaper Basten JA at [79]-[81]; Perre v State of New South Wales [2009] NSWLEC 51 at [49]; (j) The rule requires the court to make such order as it thinks just in the particular circumstances of the case." 53In probate suits, there are considerations that more readily affect the application of the Civil Procedure Act and the UCPR than in most other forms of litigation. These considerations act as guides to the exercise of discretion, but they are not inflexible. 54Before turning to the considerations, two principles that are of importance in litigation of this type should also be referred to. The first is that "parties should not be tempted into a fruitless litigation by the knowledge that their costs will be defrayed by others", and the other is that "doubtful wills should not pass easily into proof by reason of the cost of opposing them": Mitchell v Gard (1863) 3 Sw & Tr 275, at 279; 164 ER 1280, at 1281-1282. 55Any suggestion that there is a general rule that costs in Probate proceedings are borne out of the estate should be immediately rejected. As long ago as 1926, it was said, in Re Plant [1926] P 139, at 152: "I should be reluctant to do anything to create the idea that unsuccessful litigants might get their costs out of the estate, without making a very strong case on facts. The lure of 'costs out of the estate' is responsible for much unnecessary litigation." 56In Middlebrook v Middlebrook (1962-1963) 36 ALJR 216, Dixon CJ said, at 217: "No doubt in probate suits the prima facie rule is that, as in other litigation, costs follow the event. But in probate suits there are considerations which more readily affect the application of this rule than in most other forms of litigation. See Re Keane [1909] VLR 231, at p 239. An examination by Hood J of the more important English cases decided up to the date of his judgment will be found in Re Millar [1908] VLR 682. There are in the present case circumstances which would naturally lead the caveator to think that an investigation of the validity of his father's last will was justified. If this case were judged on its general circumstances only, I think that adequate reasons would be seen for entertaining some doubt as to the validity of the will. It is only as a result of investigation that the reasons for finding affirmatively in favour of the testator's testamentary capacity distinctly appear. In these circumstances the proper course is to apply the principle enunciated by Sir Gorrell Barnes P. that 'if the circumstances lead reasonably to an investigation of the matter then the costs may be left to be borne by those who have incurred them.'" 57In relation to the question of costs, Powell J (as his Honour then was), in Re Hodges; Shorter v Hodges (1988) 14 NSWLR 698, recorded the principles generally to be applied when determining how, in Probate proceedings, the court's discretion as to costs may be exercised. At pp 709-710, he wrote: "... over the years, a number of exceptions to this general rule have come to be recognised. In the field of probate litigation, two such exceptions have come to be recognised, they being: 1. Where the testator has, or those interested in residue have, been the cause of the litigation, the costs of unsuccessfully opposing probate may be ordered to be paid out of the estate; 2. If the circumstances led reasonably to an investigation in regard to the document propounded, the costs may be left to be borne by those who respectively incurred them ... To these exceptions to the general principle should, perhaps, be added the principle that, although a legal personal representative may be entitled to recover from a party to litigation costs only on a party/party basis, he, as a fiduciary, retains the right to an indemnity from the estate, and, thus, may have recourse to the estate for any difference between his costs on a trustee basis and the costs recovered from a party." 58This passage was approved by the Court of Appeal in Shorten v Shorten (No 2) [2003] NSWCA 60 at [15]. However, it is clear that neither of the guidelines set out in the passage is exhaustive or prescriptive. The two categories of exception tend to overlap, but they are not coterminous. See also, in that respect, Perpetual Trustee Co Ltd v Baker [1999] NSWCA 244, [13] - [15]. 59In the first of the exceptions referred to, although the word "fault" is sometimes used, it does not necessarily mean moral fault or culpability. Rather, the touchstone is whether it was the deceased's conduct which had led to his, or her, will "being surrounded with confusion or uncertainty in law or fact": Kostic v Chaplin [2007] EWHC 2909; [2007] All ER (D) 119. 60In respect of the second exception, Dixon J, in Middlebrook v Middlebrook, in the course of determining a challenge to a will founded upon lack of testamentary capacity, observed: "It is only as a result of investigation that the reasons for finding affirmatively in favour of the testator's testamentary capacity distinctly appear. In these circumstances the proper course is to apply the principle enunciated by Sir Gorrell Barnes P that 'if the circumstances lead reasonably to an investigation of the matter then the costs may be left to be borne by those who have incurred them.' Spiers v English [1907] P 122 at 123." 61Campbell J (as his Honour then was) in Re Estate of the late Hazel Ruby Grounds; Page v Sedawie [2005] NSWSC 1311, at [32], wrote: "... in the caselaw concerning probate litigation, it can safely be said that a consistent theme in the cases is that the principles concerning costs which are applied to a person who seeks probate (whether successfully or not) are not the same as the principles which apply to the costs of a person who opposes probate (whether successfully or not). In probate litigation, it is not only who succeeds in the litigation which matters - which is the only factor operating in the 'costs follow the event' rule. As well, the role which a particular party has played in litigation, whether as plaintiff or defendant, is relevant. Further, facts about the knowledge available to parties, and the reasonableness of their conduct in conducting the litigation, can be taken into account." 62However, I note, in that case, the parties agreed upon all the orders to be made, other than costs. 63I have not forgotten what was said by White J in Gray v Hart; Estate of Harris (No 2) [2012] NSWSC 1562, at [5] - [8], even though this was a case in which the costs question was decided after a full hearing: "The reason for the difference is that in a probate suit the court is concerned to give effect to the last will of a free and capable testator or testatrix. There is a public interest in keeping faith with the wishes of a capable will-maker that requires an investigation into the validity of the propounded wills. A grant of probate in solemn form operates in rem, that is, it binds the world, or at least those affected persons who have notice of the proceedings. Irrespective of what the parties might want, the court will not pronounce against a will unless there is material to satisfy it that the deceased did not have capacity, or that there is some other reason why the will is invalid. A grant is not made or withheld solely by the consent of the parties. There is, therefore, a public interest in the incurring of some level of costs in cases where there is genuine doubt about the validity of a will. In 1863, Sir J P Wilde established the principles that have been generally followed ever since and did so for the avowed purpose of assisting a suitor to foresee the penalties under which he or she launched litigation (Mitchell v Gard (1863) 3 Sw & Tr 275 at 277; 164 ER 1280 at 1281). His Lordship said that the basis of the principles: '... should rest upon the degree of blame to be imputed to the respective parties; and the question, who shall bear the costs? will be answered with this other question, whose fault was it that they were incurred? If the fault lies at the door of the testator, his testamentary papers being surrounded with confusion or uncertainty in law or fact, it is just that the costs of ascertaining his will should be defrayed by his estate.' His Lordship then referred to its being: '... the function of this Court to investigate the execution of a will and the capacity of the maker, and having done so, to ascertain and declare what is the will of the testator', and that: 'If fair circumstances of doubt or suspicion arise to obscure this question, a judicial inquiry is in a manner forced upon it.' It was for this reason that it had become common to relieve the losing party from costs, if the losing party was chargeable with no other blame than that of having failed in a suit which there was reasonable grounds to bring." 64However, his Honour added at [15]: "Again, with the greatest respect, the proposition that a party who reasonably but unsuccessfully propounds or challenges the will and so brings about the necessary investigation should no more have to bear his own costs than pay the costs of the other party focuses on only one of the reasons for policy described in Mitchell v Gard rather than giving weight to the other important policy consideration that parties not be tempted into fruitless litigation by the knowledge that their costs will be defrayed out of the estate." 65And then at [19]: "It is where the testator is not the cause of the litigation, but an investigation is reasonably called for, that there is usually no order as to the unsuccessful party's costs. Of course if there is no reasonable cause for investigation, that is, if the unsuccessful party has not acted reasonably, then he or she will pay the costs."

Submissions 66The principal submission on costs, by the Plaintiff, was "that a costs order should be made in favour of the Plaintiff as follows: 'the Defendant pay the Plaintiff's costs on [the ordinary] basis and any shortfall in the Plaintiff's costs [that is, any 'difference between the costs calculated on the ordinary basis and the costs calculated on the indemnity basis'] be paid out of the estate'". 67In the alternative, the Plaintiff submitted that her costs, calculated on the indemnity basis, should be paid out of the estate. 68There was really no dispute that the Plaintiff should receive her costs of the proceedings, such costs to be calculated on the ordinary basis. In relation to those costs, the real question was whether the Defendant, personally, should bear those costs (out of his share of the estate or otherwise) or whether the costs should be paid out of the residue of the estate (which would mean that the parties would bear those costs equally). 69The Plaintiff also submitted that the Defendant should bear his own costs of the proceedings. By contrast, the Defendant submitted that he should have his costs of the proceedings out of the residue of the estate because, in his submission, "the cause of [the] litigation must be laid at the door of the Testator". 70If such an order were made, it was submitted by the Defendant that it might be practical to simply make no order as to costs, since each party was entitled to one half of the residuary estate. 71Although I do not repeat them, I have carefully considered the written and other submissions made on behalf of each of the parties on the issue of costs.

Determination 72The following facts appear to me to be particularly relevant on the question of how the burden of costs of the parties should be borne. I base these facts on the undisputed evidence, or upon the evidence that I had read and heard after the cross-examination: (a) The deceased executed the 2012 Codicil in front of a solicitor and an accountant. (b) The deceased had testamentary capacity at the time she executed the 2012 Codicil. (c) There was no allegation by the Plaintiff of undue influence or of any circumstances suggesting that the deceased did not wish to sign the 2012 Codicil. In fact, at, or about, the time of executing the 2012 Codicil, the deceased said to Ms Lindy Adams, her carer between January 2012 and May 2012, that: "I am worried for Arthur, there's going to be problems when I'm gone, poor Arthur... I have done the right thing, I have done what I feel is fair. Arthur has run the business since his father died and does not deserve any conflict, but Robyn will not be happy and Arthur will have problems with her." On 28 February 2012, Ms Fleming, a close friend of the deceased, had a telephone conversation (of 33 minutes duration) with the deceased (Ex. D4) in which the deceased asked how Ms Fleming's estate litigation was progressing. After hearing Ms Fleming's response, the deceased said: "I know that if anything happens to me there will be trouble. I have seen a lawyer. I have had to make sure that Arthur is protected." (d) However, the deceased, despite being described as being "very open" by a number of witnesses who gave evidence, was not open with the Plaintiff about her testamentary intentions. This is further highlighted by her conversations with others to which I have referred above. (In other words, by keeping the change to her Will silent, there was a greater probability that the Plaintiff would be upset and that there would be a challenge to the validity of the Codicil.) (e) The Plaintiff did not positively assert that the 2012 Codicil was not a valid testamentary document. As stated previously, she sought, in the alternative, probate in solemn form of the 1995 Will and the 2012 Codicil. (f) In paragraph 18 of the Amended Statement of Claim filed on 6 February 2014, the Plaintiff did not assert a want of knowledge and approval. She stated that she did "not know whether the deceased knew and approved of the contents of the alleged codicil and accordingly does not know whether there is a proper basis for propounding the alleged codicil". (g) The Plaintiff's amended Statement of Claim raised an issue of construction of the 2012 Codicil. This demonstrates that the Plaintiff considered that, after an investigation, the 2012 Codicil might be found to be a valid testamentary document. (h) The affidavit of Mr Kennedy, on its own, was not one which, when read, would lead to the conclusion that the Defendant would not succeed. In this regard, by way of example, I refer to paragraphs 35 and 36 thereof. (i) Despite the form of the Plaintiff's pleading, the Defendant did not assert that the Court's consideration of the 2012 Codicil was unnecessary. It seemed to be accepted by him that there were circumstances which could lead to the conclusion that the provisions of the 2012 Codicil may not have been fully known to, and approved by, the deceased, and that, if the conscience of the court, upon a careful and accurate consideration of all the evidence of both sides, was not judicially satisfied that the 2012 Codicil did not contain the real intention of the deceased, it was bound to pronounce its opinion that the document was not entitled to probate. (j) The Defendant, before the case was concluded, chose not to proceed to determination. Following the evidence of Mr Kennedy and others, all of whom were witnesses called in the Defendant's case, he stated that he did not wish to further propound the 2012 Codicil. This election will prompt the dismissal of the first Cross-Claim. (k) The Defendant was in a position to assess the extent to which Mr Kennedy, as the author of the 2012 Codicil, as one of the persons who discussed it with the deceased, and as one of the attesting witnesses, would assist in satisfying the Court of the real intention of the deceased. Even though a number of deficiencies in seeking to rely upon him were stated to the Defendant's prior legal representatives, it was not until Mr Kennedy had been cross-examined, that an assessment could fully, and properly, be made. Almost immediately thereafter, the Defendant did not take any more time in seeking to propound the first Cross-Claim. In this regard, he accepted that he no longer had a duty to propound the 2012 Codicil. (l) The principal person to benefit, if the 2012 Codicil was established as a valid testamentary instrument, was the Defendant. Under the 1995 Will, the Plaintiff was entitled to receive, directly or indirectly, the benefit of a quarter share in the retained earnings of LEPT or LTPT. Under the 2012 Codicil, the deceased gifted her shares in each of the companies "together with all entitlements attaching thereto" to the Defendant. (There was no dispute that this gift would result in the Plaintiff not receiving, directly or indirectly, any share of those retained earnings.) In other words, the Defendant brought the proceedings in furtherance of a personal interest. (I accept that he may have had other motives, including to carry out what he believed to be the deceased's wishes.) 73After careful consideration, having read and heard the submissions of counsel, and considering the overall justice of the case as far as it went, I am of the view that the Plaintiff's costs, calculated on the indemnity basis, should be paid out of the deceased's estate. The Defendant should bear his own costs of the proceedings. 74I have, since the hearing, been provided with an affidavit of Jeremy Neil Glass sworn 8 April 2014 in which he consents to act as the administrator and to which is annexed the consent of the legal representative of each party to his appointment and to the charging order which I have incorporated in the orders below. 75The Court orders: (a) Orders, subject to compliance with the rules of Court, that Letters of Administration with the Will of the deceased, Veronica Julia Laundy, made on 5 December 1995, in solemn form, be granted to Jeremy Neil Glass. (b) Orders that the matter be remitted to the Registrar to complete the grant. (c) Orders that the administration bond be dispensed with. (d) Orders that the balance of the amended Statement of Claim and the first Cross-Claim be dismissed, with the intention that the Plaintiff and the first Defendant, respectively, be prevented from bringing fresh proceedings in relation to the 1995 Will or the 2012 Codicil, or claiming the same relief as sought against each other in the amended Statement of Claim, or first Cross-Claim, respectively, in any fresh proceedings. (e) Orders that Jeremy Neil Glass shall be entitled: (i) to make and be paid from the estate all usual and proper charges at the usual hourly rates as are charged by the legal practice in which he is engaged and on the usual terms as to payment of that practice: (a) for his work as administrator or trustee of the estate, or both; (b) for the professional and non-professional services rendered by him or that legal practice in the administration of the estate of the deceased or of the trusts of the will, or both; and (ii) to engage the services of any other legal practitioner, accountant or other professional adviser in relation to the administration of the estate where he considers it necessary to do so and to pay from the estate the costs incurred in having those services provided. (f) Notes the agreement of the parties that the administrator of the deceased's estate will be requested to administer the estate upon the basis that the Defendant has not exercised the Option referred to in the Will the subject of the grant of administration. (g) Orders that the exhibits, other than the original Will dated 5 December 1995 and the original Codicil dated 6 March 2012, be dealt with in accordance with the Uniform Civil Procedure Rules. (h) Orders that the Court Books be returned.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 April 2014