De Bruyne v Welstead

Supreme Court of NSW|2022-06-28|Before: Hallen J

Northern Territory v Sangare (2019) 265 CLR 164; [2019] HCA 25 Oasis Hotel Ltd v Zurich Insurance Company (1981) 28 BCLR 230 ONE.TEL Ltd v Deputy Commissioner of Taxation (2000) 101 FCR 548; [2000] FCA 270 Oshlack v Richmond River Council (1998) 193 CLR 72 Owners Strata Plan 73162 v Dyldam Developments Pty Ltd [2014] NSWSC 1789 Perpetual Trustee v Baker [1999] NSWCA 244 QBE Insurance (Australia) Limited v Hotchin [2013] NSWSC 315 Re Beverage Freight Services Pty Ltd [2020] NSWSC 509 Re Estate Law Hazel Ruby Grounds, Page v Sedawie [2005] NSWSC 1311 Re Estate of Hodges; Shorter v Hodges (1988) 14 NSWLR 698 Re Minister for Immigration & Ethnic Affairs (Cth); Ex parte Lai Qin (1997) 186 CLR 662 Re Tsaousis [2019] VSC 511 Re Wilcox; Ex parte Venture Industries (No 2) (1996) 72 FCR 151; [1996] FCA 1942 Shorten v Shorten (No 2) [2003] NSWCA 60 Shovelar v Lane [2011] EWCA Civ 802 Starr v Miller (No 2) [2021] NSWSC 685 Sydney Markets Credit Services Co-operative Ltd v Taylor (No. 3) [2015] NSWSC 1236 Tsaprazis v Goldcrest Properties Pty Ltd [2000] NSWSC 765 Tu v Tu Estate of Tu [2008] NSWSC 458 Vector Corrosion Technologies Limited v E-Chem Technologies Ltd [2022] FCA 519 Wright v Apthorpe [2020] NSWCA 300 Texts Cited: Miller's Probate Practice (Maxwell: 1900 Ed.) Category: Costs Parties: Christopher James De Bruyne (Plaintiff) Michelle Welstead (Defendant) Representation: Counsel: M Pringle (Plaintiff) A Cheshire SC (Defendant)

Solicitors: Streeter Law (Plaintiff) Clinch Long Woodbridge Lawyers (Defendant) File Number(s): 2020/188569 Publication restriction: Nil

Introduction

This is the Court's judgment on the appropriate order for costs arising out of, somewhat bitter, probate proceedings, brought in respect of the estate of Carol June Hudson-Collimore ("the deceased"), who died on 5 March 2020, aged 91 years, leaving property in New South Wales.
The Plaintiff is Christopher De Bruyne, who was born in March 1984 and the Defendant is Michelle De Bruyne Welstead, who was born in November 1976. Each of the parties is a grandchild of the deceased. They are siblings.
By orders made on 25 November 2021, the proceedings were listed for hearing, a second time, with an estimated duration of 4 days. However, on 1 June 2022, the parties informed the Court that the contested proceedings had been resolved, with the only issue to be determined being how the costs of the proceedings should be borne.
The proceedings were settled, without a contested hearing, by orders presented to the Court on 14 June 2022, that is, about 2 weeks prior to the commencement of the hearing. This Court made final orders, excepting in relation to costs, in Chambers, on 16 June 2022. The Court granted Letters of Administration with the Will dated 15 May 2002 of the deceased annexed, in solemn form, to Ms Lauren Gidley, a solicitor and the agreed independent administrator. The issue by the Court of the grant is currently with the Senior Deputy Registrar in Probate, awaiting a response to several requisitions issued on 22 June 2022.

The Proceedings

Because it is relevant to the issue of costs, it is next necessary to set out the way in which the matter proceeded. I have taken what follows from the Court file, and also from the affidavits read, or documents tendered, at the costs hearing.
On 25 June 2020, the Plaintiff filed a Notice of Intended Application for Probate, in the NSW Online Registry. That notice must be published for at least 14 days before lodging a summons for a grant of probate with the Court. (The Supreme Court Rules 1970 (NSW), Pt 78 r 3, specifies that the valid method of publication for such a notice is via the NSW Online Registry website.)
The Plaintiff commenced the proceedings by Summons filed on 17 July 2020, in which he sought a grant of probate, "until the Original Will or a better copy is found and proved", of a copy of an undated document, the original of which was said to have been a validly executed Will made "on or around 16 September 2008". The Plaintiff described the undated copy document as an "informal" Will of the deceased, relying upon s 8 of the Succession Act 2006 (NSW).
The Summons filed by the Plaintiff was of the type that is usually filed in non-contentious proceedings.
In support of his application, the Plaintiff filed an Affidavit of Executor sworn 29 June 2020, in which he averred that he believed that the document being propounded was "a copy of the last Will of Carol June Hudson-Collimore" and that he was "not aware of the existence of any other document purporting to embody the testamentary intentions of the deceased". He also set out, in this affidavit, the circumstances in which he came into possession of the copy undated document.
On 17 July 2020, the Plaintiff filed another affidavit, also sworn on 29 June 2020, which he wrote "qualifies my belief that the 2008 Will is the last Will" of the deceased. In this affidavit, he acknowledged the existence of a Will dated 15 May 2002. He also referred to an unsigned will of the deceased. He described the searches that he had made for other testamentary instruments.
The Plaintiff's solicitor sent a Notice of Proceedings, by email dated 22 July 2020, to the Defendant. She is a person whose interests would be adversely affected if the orders sought by the Plaintiff were made.
On 4 August 2020, the Defendant's solicitors wrote to the Plaintiff's solicitors, advising that "…we have instructions to file a Notice of Appearance including electing to be added as a defendant to the proceedings". A Notice of Appearance was filed on her behalf on 28 August 2020.
The Supreme Court Rules, Pt 78 r 44 provides, relevantly, that on entering an appearance, the person becomes a defendant in the proceedings and that the proceedings are to continue as if the person had been joined as a defendant by the application for the grant of probate or administration.
On 28 August 2020, the Plaintiff's solicitor filed a copy of a Notice of Proceedings, addressed to Louise Beatrice Kaktins (also known as Louise Sadek), a person to whom reference will be made later in these reasons. She, also, is a person whose interests would be adversely affected if the orders sought by the Plaintiff were made. She played no part in the proceedings.
The proceedings were listed in the Succession List, for the first time, on 9 October 2020. Each of the parties appeared by his, and her, legal practitioner respectively.
After discussion, an order was made for the matter to proceed by way of pleadings, together with directions for the filing, and service, of evidence and the matter was adjourned until 9 November 2020.
The Plaintiff filed a Statement of Claim on 14 October 2020 seeking the same order for Probate that had been sought in the Summons, an order that the matter be referred to the Senior Deputy Registrar to complete the grant, and an order for costs.
On the same date as the Statement of Claim was filed, the Defendant's solicitors wrote to the Plaintiff's solicitors requesting that access be provided "to the copy will propounded by your client so that it can be examined by a handwriting expert and a formal expert's report obtained". The battle lines of the dispute between the parties were drawn.
On 27 October 2020, the Plaintiff filed another affidavit setting out, amongst other things, further details of where the copy document had been found and provided some of the history of the relationship of the deceased with her daughter, Christine, the mother of the parties, and also the deceased's relationship with the Defendant.
On 28 October 2020, the Defendant's solicitor informed the Plaintiff's solicitor that Ms Melanie Holt, a forensic document examiner, was prepared to conduct a forensic examination of the document being propounded. Consensually, arrangements were made for Ms Holt to carry out the relevant examinations.
By Cross-Claim, filed on 6 November 2020, with her Defence, the Defendant propounded a duly executed Will dated 15 May 2002 of the deceased. I shall refer to this document as the 2002 Will as the Plaintiff did not dispute its validity, other than to assert that it had been revoked by the copy document being propounded by him. Indeed, on 26 April 2021, the Court recorded: "Notes that there is no dispute that in the event that the Will being propounded by the Plaintiff of September 2008 is not a valid Will there should be a grant of probate in solemn form of the 2002 Will being propounded by the Defendant."
Whilst it was necessary, on 9 November 2020, to make other directions, the Court was informed that the Defendant had actually appointed, Ms Holt to consider the authenticity of the deceased's signature on the copy Will. Apparently, a letter of instruction, dated 4 November 2020, had been sent to her.
In order to try to avoid the necessity for, and the costs of, two different forensic document examiners to be instructed, the Court directed, without objection, that a copy of the letter of instructions, and an index of the documents provided to Ms Holt, be provided to the Plaintiff's solicitors. The Court suggested that if there were any other documents that the Plaintiff wished Ms Holt to consider in order to enable the preparation of the report, a copy of those documents should be provided to her.
On 17 November 2020, the Defendant's solicitors asked the Plaintiff's solicitor whether there were any additional documents required to be provided to Ms Holt for her consideration, and, somewhat unhelpfully, the Plaintiff's solicitors responded: "We will determine whether we provide further information once we have reviewed the report and ascertained precisely the issues that may be in dispute".
On 24 November 2020, Ms Holt provided her first report to the Defendant's solicitors.
On 16 December 2020, the Defendant filed an amended Defence in which she denied that the deceased and the attesting witnesses had signed the original of the copy document and asserted that the copy document was not genuine.
On a date not identified, but which was prior to 6 January 2021, a copy of the first report prepared by Ms Holt was provided to the Plaintiff's solicitors.
On the same date, the Plaintiff's solicitors informed the Defendant's solicitors that "[W]e have separately engaged a handwriting expert". On 11 January 2021, the Plaintiff's solicitors stated that "We confirm that at this stage, our handwriting expert does not require the further documents".
Relevantly, but surprisingly, bearing in mind the reference to a handwriting expert referred to above, when the matter was next in the List, for directions, on 22 February 2021, the Court noted that the Plaintiff "now wishes to obtain a handwriting expert". Without objection, the Court ordered that any expert report to be relied upon by the Plaintiff be served by 4:00 p.m. on 16 April 2021.
On a date not disclosed in the evidence, but prior to 1 March 2021, the Plaintiff's solicitors advised the Defendant's solicitors that Dr Steven Strach, a forensic document examiner, had been retained on behalf of the Plaintiff, to provide an expert report.
On 16 April 2021, following a request of the same date from the Defendant's solicitors in relation to the service of his expert's report, the Plaintiff's solicitors responded: "[W]e are not instructed to serve any expert report on behalf of our client".
On 26 April 2021, the Plaintiff sought leave to file an amended Statement of Claim. Without objection, the Court granted leave and made directions for the filing of the amended pleadings.
The Plaintiff filed an amended Statement of Claim on 27 April 2021 in which he sought, in the alternative to the relief earlier sought, to propound the 2002 Will. He sought an order that Letters of Administration with the 2002 Will annexed, be granted to him.
On 6 May 2021, despite having received his own expert report (which he chose not to serve), and the receipt of Ms Holt's first report, the Plaintiff joined in the request made to the Court to have the matter listed for hearing. The proceedings were then listed for hearing for two days, being 28 September 2021 and 12 October 2021.
I should mention, at this point, that on all of the directions hearings to which reference has been made, either Mr M Streeter, solicitor, (who is an accredited specialist in Commercial Litigation), or by Mr L J Ellison SC appeared for the Plaintiff, and Mr A Cheshire SC appeared for the Defendant.
On 2 September 2021, Ms Holt provided her second report which related to the signature of Geoffrey Smith, shown as an attesting witness on the undated copy document. Shortly thereafter, a copy was served upon the Plaintiff's solicitors
It is not necessary to rehearse the various occasions the matter then came before the Court until shortly before the hearing.
In accordance with directions made, written submissions were due on 17 September 2021. Whilst senior counsel for the Defendant provided written Submissions, senior counsel for the Plaintiff did not do so, "due to an ethical issue". The precise nature of the "ethical issue" was not disclosed then, or otherwise.
On 21 September 2021, the Plaintiff's solicitors provided to the Defendant's solicitors, a copy of a Will dated 3 October 2008, stating that: "[T]he original document has been held by Mr Arvind Kumar of Prime Accountants, the Accountant of the Deceased. This original Will was delivered to our client from Prime Accountants together with other associated documents in an envelope earlier this month".
On 22 September 2021, the Plaintiff filed a notice of motion in which he sought leave to file and serve a further amended Statement of Claim in which he sought to propound the Will said to have been made by the deceased on 3 October 2008.
In support of the notice of motion, the Plaintiff filed an affidavit, sworn on 22 September 2021, in which he set out the circumstances in which he came into possession of that document. Relevantly, he wrote that he had received the original Will on 7 September 2021; that he had sought the assistance of overseas handwriting experts, between 10 and 13 September 2020, in order to determine its authenticity; that he had informed his solicitors of its receipt on 17 September 2021; and had instructed his solicitors to inform the Defendant's solicitors of this document on 21 September 2021.
The matter was listed, urgently, on 23 September 2021. Mr Ellison SC again appeared for the Plaintiff and Mr Cheshire SC appeared for the Defendant. Mr Ellison SC stated that he understood that the original was not then with his instructing solicitors but was "currently with a handwriting expert at Chatswood… I think it might be Mr Strach". (Later, on this occasion, the Plaintiff's solicitor informed the Court that it was another handwriting expert, not Dr Strach, and later, again, he stated that he had spoken with Dr Stephen Dubedat, another forensic document examiner.)
In the hope that the hearing date would not need to be vacated, agreement was reached on the way in which the original document could be inspected, urgently, by Ms Holt, and also by the expert who had been retained by the Plaintiff. Other directions were made regarding the service of any affidavit from Mr Kumar.
On 27 September 2021, Ms Holt provided her third report which related to the original document dated 3 October 2008. Shortly thereafter, a copy was served upon the Plaintiff's solicitors.
The proceedings were then before the Court on 28 September 2021. On that occasion, Mr Ellison SC again appeared for the Plaintiff and Mr Cheshire SC appeared for the Defendant. Mr Ellison SC informed the Court that the proceedings, as constituted, would not continue in its then form. (He confirmed that again on 20 October 2021.)
Once again, the Defendant sought to challenge the authenticity of the document then sought to be propounded by the Plaintiff. Indeed, senior counsel for the Defendant made perfectly plain that it would be alleged that the 2008 document proposed to be propounded was a forgery, made by the Plaintiff.
This assertion did not prevent the Plaintiff from seeking to proceed with his application to further amend the amended Statement of Claim with senior counsel confirming that a report from Mr Dubedat was being sought. In addition, in relation to this document, the Court was informed that attempts were being made to locate the two attesting witnesses to the deceased's signature on the October 2008 document and also Mr Kumar.
The Court made directions for any forensic document examination report intended to be relied upon by the Plaintiff to be served upon the Defendant, together with any other affidavits upon which the Plaintiff intended to rely.
It was necessary, then, to vacate the hearing date of 12 October 2021. No order was made granting leave to file and serve a further amended Statement of Claim and the notice of motion was adjourned until 20 October 2021, in the hope that the report of Mr Dubedat would be provided to the Plaintiff's legal representatives and that both parties could then decide whether, and how, to proceed.
On 14 October 2021, Mr Dubedat provided his report on the authenticity of the 3 October 2008 document. The Plaintiff's solicitors served a copy of the report on 18 October 2021.
The matter was listed next on 20 October 2021. On that date (apparently despite the contents of Mr Dubedat's report), the application for leave to amend proceeded, and was granted, as the Plaintiff wished to continue with the claim for letters of administration with the Will dated 3 October 2008 annexed. There was a discussion about the costs thrown away and the Plaintiff was informed that those costs would be reserved. It was made clear to the Plaintiff that the possibility existed that costs, calculated on the indemnity basis, might be ordered, depending upon the way in which the matter proceeded.
The Plaintiff filed a further amended Statement of Claim on 28 October 2021. In that pleading, he sought Probate in solemn form of the Will executed on 3 October 2008 to him "as an executor and beneficiary therein, the other executor having predeceased the testator". In the event that the Court declined to make the grant to him of that Will, he sought an order that Letters of Administration with the 2002 Will annexed be granted to him.
The alternative relief that the Plaintiff sought was maintained despite the suggestion made, by the Court, more than once to the legal representatives of both parties, during various directions hearings, that if the 2002 Will was found to be the last valid Will of the deceased, there should be a grant of Letters of Administration to an independent administrator. Even then, it was clear that it would be in the best interests of the parties, as beneficiaries, to not appoint either of them to administer the deceased's estate.
The Defendant filed a Defence to the further amended Statement of Claim on 4 November 2021. She alleged that the signature of the deceased, and also that of each of the attesting witnesses, "was inserted onto the document".
On 11 November 2021, Ms Holt provided her fourth report.
On 25 November 2021, again with the support of the Plaintiff, the matter was listed for hearing, for four days, commencing on 28 June 2022.
On 17 February 2022, the Court conducted a pre-trial directions hearing. Again, senior counsel appeared for each party, and directions were made for the service of an Outline of Submissions, an affidavit of costs, and the provision of a Tender Bundle of Documents.
I have earlier referred to the mention on 1 June 2022, when the Court was informed that the matter had resolved between the parties, other than in respect of the costs of the proceedings.

The documents the subject of the applications for administration

It is next necessary to refer to the contents of each of the documents to which reference has been made that were sought to be propounded.
The 2002 Will was duly executed. The deceased's signature thereon was witnessed by two employees of Cropper Parkhill, the firm of solicitors that had drafted the 2002 Will.
In that Will, the deceased appointed Pasquale Vartuli, a solicitor, and Louise Sadek (Ms Kaktins), her friend, as executors. However, neither of the named executors sought a grant of probate. Mr Vartuli signed a renunciation of Probate on 4 June 2020 and Ms Kaktins signed a renunciation of Probate on 31 July 2020.
The 2002 Will provided: 1. A pecuniary legacy of $5,000 to each of Ms Kaktins (referred to as Sadek in the Will) and to the University of Sydney. 2. A bequest of a specified taxi plate to the Plaintiff. 3. The residue of the estate to be divided equally between those of the Plaintiff, the Defendant and their mother, Christine, who survived the deceased. (In the events that have happened, Christine having predeceased, the Plaintiff and the Defendant share the deceased's residuary estate equally.)
Initially, the Plaintiff sought probate of an undated document, which, he alleged, was a copy of a will validly executed by the deceased "on or shortly after 14 September 2008". That copy document provided: 1. A pecuniary legacy of $5,000 to each of Geoffrey Smith and to the University of Sydney. 2. A right of residence in a property in West Ryde to Christine. 3. A devise of real property in Strathfield to the Plaintiff. 4. The residue of the estate to be divided equally between the Plaintiff and the Defendant.
The deceased's signature on the original of the copy document was said to have been witnessed by Geoffrey Smith and by Christine, each of whom was a beneficiary named therein.
Finally, the Plaintiff sought to propound an original document dated 3 October 2008, said to have been drafted by M D Nikolaidis & Co, Solicitors, which appeared, on its face, to be a validly executed Will. The deceased's signature on that document was said to have been witnessed by Ms Janice Poore, a solicitor at M D Nikolaidis & Co, and JM (or DM) Breunt (or Breust), a nurse. The Plaintiff sought Probate of the 2008 document.
In the document dated 3 October 2008 the deceased: 1. appointed the Plaintiff and Geoffrey Smith, as executors 2. left: 1. A pecuniary legacy of $5,000 to Geoffrey Smith. 2. A pecuniary legacy of $400,000 to the Defendant. 3. A right of residence in a property in West Ryde to Christine. 4. The residue of the estate, including the remainder interest in the West Ryde property to the Plaintiff.
There was no dispute that each of the documents propounded by the Plaintiff provided him with a greater share of the deceased's estate than did the 2002 Will. Indeed, in each, the entitlement of the Plaintiff, as compared with that of the Defendant, increased substantially.

The evidence relating to the 2008 document

The Plaintiff claimed that between March and July 2018, after the deceased moved into the Wesley Gardens Belrose Nursing Home, he had arranged for all of the documents located at the deceased's home in Strathfield to be placed into plastic storage tubs and relocated to her West Ryde property for later review.
He said that on 24 August 2021, whilst perusing the documents in those plastic storage tubs, he found a letter dated 12 March 2010, from Mr Arvind Kumar, of Prime Accounts, which outlined terms of engagement for accounting and taxation services. He annexed a copy of the letter said to have been found, to his affidavit sworn 22 September 2021. The letter contained the following contact details: "02 8753 0091 Arvindk1978@hotmail.com"
The Plaintiff stated that on 24 August 2021, he rang the telephone number, but the phone did not ring. He said he assumed that the telephone number had been disconnected. On the same day, he sent an email to 'Arvindk1978@hotmail.com' requesting any documents in Mr Kumar's possession, or in the possession of Prime Accounts, to be sent to him.
The Plaintiff wrote that on 26 August 2021, he received an email from Mr Kumar, relevantly, in the following terms: "I will check my good records."
The Plaintiff also wrote that on 27 August 2021, he received an email from Mr Kumar, relevantly, in the following terms: "I have checked and cannot find any record for Carol Collimore. Sorry again."
The Plaintiff wrote that he replied to this email the same day, in which email he informed Mr Kumar that the deceased was also known as Carol Hudson and he asked if Mr Kumar could check his records again.
The Plaintiff then wrote that on 30 August 2021, Mr Kumar responded by email, relevantly, in the following terms: "We may have some papers here. What was her last address?"
On the same day, the Plaintiff replied by email, responding by providing the relevant details. On 31 August 2021, Mr Kumar is said to have responded by email, relevantly, in the following terms: "Yes we have something for her. It is a lot of documents of many years ago so may not help you. It has been kept for a long time now. I will arrange postage for you. Please inform me of your address for this to go."
The Plaintiff wrote that on 31 August 2021, he responded to Mr Kumar, by email, providing his address.
The Plaintiff wrote that on 1 September 2021, Mr Kumar sent an email to Plaintiff, which was in the following terms: "I have done the needful and sent to you today"
On 7 September 2021, the Plaintiff is said to have received a bundle of documents, comprising 10 pages in total, by express post, from Mr Kumar, one of which was the Will dated 3 October 2008. The other documents were tax returns and related correspondence for the deceased's company, Hudcoll Pty Ltd.
Some of the documents said to have been provided have the words "Client Copy" on them. None of them contain any reference to "PRIME", "Prime Accounts" or "Arvind Kumar".
The Plaintiff wrote that, on 20 September 2021, he caused an email to be sent to Mr Kumar, which was in the following terms: "There is a legal case about these documents that needs a legal affidavit on the provenance of these documents and who had custody of them. I need you, or whomever had them, to write a statement on where they have been, and how you received them."
The Plaintiff claims that he did not receive any further correspondence from Mr Kumar.
Between 10 and 13 September 2021, the Plaintiff is said to have made enquiries, by email, of more than twenty different handwriting experts, who were primarily located in the United States of America. It appears that he retained two of them, being Dr Roy Fenoff, and Ms Katherine Mainolfi Koppenhaver, to provide an expert report.
On 15 September 2021, the Plaintiff visited the office of Chris Anderson, of Chris Anderson & Co Pty Ltd - Forensic Document Examination, another forensic document examiner located in Sydney, to have him assess the authenticity of the 2008 document. The office was closed, and the Plaintiff states he was unable to otherwise get in contact with Mr Anderson.
On 19 September 2021, Dr Fenoff provided the Plaintiff with his Forensic Document Examination Report regarding the October 2008 Will. A copy of this Report was included at pages 88-91 as part of Ex CDB-04 to the Plaintiff's affidavit sworn 22 September 2021. It concluded that the signature of the deceased on the October 2008 Will was likely the same author of the other signatures provided as samples, but that more samples would be needed to form a definitive opinion.
On 20 September 2021, Ms Koppenhaver provided the Plaintiff with her Forensic Document Examination Report regarding the October 2008 Will. A copy of this Report was included at pages 92-94 as part of Ex CDB-04 to the Plaintiff's affidavit sworn 22 September 2021. It concluded that the signature of the deceased on the October 2008 Will was genuine.
It is clear that neither of the document examiners in the United States of America had the opportunity to inspect the original of the 2008 document. Neither swore an affidavit that was served, and which was to be relied upon, in advancing the Plaintiff's new case. The Plaintiff provided no explanation for him seeking overseas experts none of whom would have inspected the original document.
As was outlined previously, the Plaintiff informed his solicitors of the October 2008 Will on 17 September 2021 and instructed them to inform the Defendant's solicitors of its existence on 21 September 2021. This was done by his solicitors.
On 23 September 2021, a copy of each of the reports, as part of the exhibit to the Plaintiff's affidavit, was delivered to the Court. In the accompanying covering letter, the solicitors for the Plaintiff indicated that a copy of these documents had also been provided to the solicitors for the Defendants, by email, on 22 September 2021.

Searches for Mr Kumar

The Plaintiff did not file any specific evidence revealing the searches he, or his solicitors, had conducted to locate Mr Kumar. However, included as part of the bundle of documents tendered by him at the hearing, which had been marked Exhibit C1, was a copy letter dated 8 October 2021, to the Defendant's solicitors, which revealed some information about the searches that had been undertaken by the Plaintiff's solicitors. That letter revealed that the Plaintiff's solicitors had not been successful in contacting Mr Kumar and that subsequent emails had been sent to the email address which had been listed in the letter of engagement dated 12 March 2010, and with which the Plaintiff had previously received correspondence, had not elicited any response. The letter also stated that the solicitors had instructed a private investigations firm, Lyonswood, to locate Mr Kumar using the information they had from the letter of engagement. The solicitors were also said to have conducted a title search for the ABN on the letter of engagement which revealed that the ABN was most recently registered to a company called "Subbito Pty Limited", which was consistent with the results of the Defendant's searches outlined below.
In the letter dated 8 October 2021, the solicitors for the Plaintiff, also outlined the searches which they said had been conducted to locate the witnesses to the Will, Ms Janice Poore, and D M Breunt. They stated that since they had no first names or gender for D M Breunt, it was unlikely that any searches would assist in locating him/her. Through their private investigator they had door knocked other residents of the apartment building where D M Breunt was recorded to have resided, but that had yielded no fruitful results. They stated that they "anticipate potentially issuing subpoenas to the owners of the property" to see if they have any records of a D M Breunt as a tenant. It is unclear whether those subpoenas were ever issued.
With respect to Ms Janice Poore, they had been unable to identify her since she had not practiced as a solicitor in NSW since 2010. They had conducted searches of the United Kingdom and New Zealand Registers of Solicitors for a person with the name Janice Poore, but these searches returned no results. They informed the Defendant's solicitors that they were continuing to work with Lyonswood Investigations to locate Ms Janice Poore.
At the subsequent directions hearing, on 20 October 2021, senior counsel for the Plaintiff stated that the Plaintiff's solicitors would seek to issue subpoenas to the people who then conducted the business in which Mr Kumar was said to have worked to see if it had any other addresses for him. It is unclear, from the Court file, whether such subpoenas were ever issued. Senior counsel also indicated that Kumar was a fairly common name, which were said to have added to the difficulties locating him.
On 25 November 2021, when the matter was next listed, Mr Streeter for the Plaintiff, stated that while further enquiries had been made, the nature of which searches had been provided to the Defendant's solicitors, there was no further information, or developments, available to the Plaintiff.
In an email dated 17 November 2021, addressed to the Defendant's solicitors, the solicitors for the Plaintiff wrote that "[w]e are still currently conducting enquiries with our private investigators and have multiple lines of enquiry currently in play. We will keep you updated of any further developments." (Ex C1, p 48).
In an email dated 24 November 2021, the solicitors for the Plaintiff again wrote, stating that they had not been successful in locating Mr Kumar, but that they may be able to obtain a statement from Mr Nikolaidis about the creation of the October 2008 Will and its signing (Ex C1, p 54). However, in an email dated 19 January 2022, the solicitors for the Plaintiff wrote that they had no further witnesses or evidence to file (Ex C1, p 53).
The Defendant also relied upon evidence filed regarding Mr Kumar.
Mr Richard James Carey swore one affidavit in these proceedings on 7 February 2022. His affidavit comprised 10 paragraphs and spanned 4 pages which was read as part of the Defendant's evidence.
Mr Carey is the director of Prime Partners Pty Ltd ("PP"), which conducts a chartered accounting business. He commenced working there in 2009 and became a director in 2012.
He noted that PP is closely related to Prime Partners Financial Planning Pty Ltd ("PPFP") and indicated that it was not uncommon for clients, and work, to be referred between the two entities.
Mr Carey stated that the Plaintiff had first contacted PP in 2017, and, in 2018, pursuant to his Power of Attorney, and instructed PP to act as accountants for the deceased. He stated that PP had not performed any work for the Plaintiff, or the deceased, prior to that date.
From 2017, PP did very little work for the deceased. From a review of its records, Mr Carey stated that that PP had only prepared a "Change to Company Details" form for a company called Hudcoll Pty Ltd, which did not appear to have been signed or lodged.
Mr Carey recalls that in the middle of 2018, he informed the Plaintiff that PP would not do any further work for him, due to complaints from the staff. Subsequently, the Plaintiff collected all of the relevant documents held by PP, and, thereafter, PP did not retain any copies of those documents.
Since 2018, PP had no further dealings with the Plaintiff.
Mr Carey was shown a copy of the letter dated 12 March 2010, said to have been from Mr Kumar to the deceased. He does not know, and has never known, a person named Arvind Kumar, and to his knowledge Mr Kumar was never an employee, or an associate, of PP or PPFP. He did not recognise the ABN, postal address, or telephone number, set out in the letter, and added that each had no association with PP or PPFP.
Furthermore, Mr Carey averred that he was not aware of the name "PRIME" or "Prime Accounts", and such an entity had never been associated with PP or PPFP, each of which has only ever used the name "Prime Partners". A copy of the ASIC company extract for PP was annexed to support this claim.
Mr Carey also annexed a copy of a company search for Subbito Pty Ltd, which was the company recorded by ASIC with the ABN written on the letter from Mr Kumar ("40 109 XXX XXX"). It contained no reference to "PRIME", "Prime Accounts", or "Arvind Kumar". He stated that he did not know that company, or any of the other names it had previously used, including, "Sydney Accounting" and "Fast Track Tax".
Mr Carey also annexed a copy of a business name search for "Prime Accounts", which revealed the current status of the name was "cancelled", but that it had previously been registered to a Mr Zalak Shah. A copy of the ABN lookup for Mr Shah was annexed to Mr Carey's affidavit. The ABN listed for Mr Shah and "Prime Accounts" was not the same as that recorded in the letter said to have been from Mr Kumar.
Mr Paul Saville swore one affidavit in these proceedings on 8 December 2021. His affidavit comprised 15 paragraphs and spanned 4 pages which was read as part of the Defendant's evidence.
Mr Saville is a director of PPFP. He was employed there as a financial planner in 2018 and became a director in August 2018.
In the affidavit, Mr Saville wrote that in 2018, the Plaintiff was referred to PPFP by PP. He was seeking financial advice regarding the investment of the proceeds of sale from the deceased's Strathfield property. However, Mr Saville had only dealt with the Plaintiff for approximately one month. He recalls that the Plaintiff brought a substantial number of documents to the office.
He stated that in the middle of 2018, Mr Carey advised Mr Saville that PP had decided not to work for the Plaintiff due to staff complaints. Consequently, PPFP decided to also cease working for the Plaintiff, and informed him of that decision.
He also wrote that in July 2018, the Plaintiff had collected all the papers which he had provided to PPFP and that after July 2018, neither PP nor PPFP retained any copy of the Plaintiff's documents. Mr Saville stated that there was no other evidence of PPFP having acted for, or having provided services to the deceased, or to the Plaintiff, at any other time.
Mr Saville was shown a copy of the letter, dated 12 March 2010, to the deceased, said to have been sent to the Plaintiff by Mr Kumar. He was not aware of the name "PRIME" or "Prime Accounts"; he did not know a person named Arvind Kumar; and was unaware of any record of a person named Kumar working for PPFP or PP. He did not recognise the ABN, postal address, email address or telephone number set out in the letter, having had any association with PP or PPFP. Mr Saville annexed to his affidavit, a copy of the ASIC company extracts, a copy of which had been annexed to Mr Carey's affidavit. He claimed he did not know that company, nor any of the other names it had previously used, including, "Sydney Accounting" and "Fast Track Tax".
He also annexed a copy of a business name search for "Prime Accounts", and a copy of an ABN relating to Mr Shah. The ABN listed for Mr Shah and Prime Accounts was not the same as that recorded in the letter from Mr Kumar.

The expert evidence referred to

The copy reports which were served, and to which reference is made in the written submissions of the parties, formed part of the evidence read on the application for costs. It is not necessary to set out the contents of each of the reports in detail.
Only the copy expert report dated 14 October 2021 by Stephen Dubedat, who, as has been written, is a forensic document examiner and handwriting expert, was served by the Plaintiff.
Mr Dubedat confirmed that he had received instructions from the Plaintiff's solicitor on 21 September 2021 "to examine documents … with a view to determine the authenticity of a 'C J H Collimore' signature appearing on a questioned three page 'WILL' (labelled Q1)" and "to determine whether this questioned signature was written by the same person who wrote the 27 specimen "C J H Collimore" signatures attributed to the late Carol June Hudson-Collimore on separate specimen documentation" with which he had been provided.
The Plaintiff's solicitors provided subsequent instructions to Mr Dubedat in an email dated 7 October 2021 "to determine the authenticity of the 'J Poore' signature on document Q1". Two further documents were supplied in PDF format (labelled S18 and S19) which bear specimen signatures attributed to Janice Poore.
In his report, Mr Dubedat concluded that the signature on the October 2008 Will was not a genuine signature of the deceased. He reached this conclusion because the questioned signature did not "display the dynamic qualities in line quality shown throughout the specimen signatures". He stated that the evidence supported his hypotheses (iii) and (iv), which were that another author wrote the signature, either by tracing a specimen of the deceased's signature, or through imitating the deceased's signature freehand to produce what is known as a "freehand" forgery.
Mr Dubedat noted that the signature provided in one of the specimens (S16), had a high degree of coincidence with the signature in the October 2008 Will, and he concluded that the signature on this document was also not a genuine signature of the writer of the specimen "C J H Collimore" signatures. Interestingly, S16 was the signature of the deceased found on the Letter of Engagement from Mr Kumar.
He also concluded that there was "evidence to suggest" that the questioned "J Poore" signature was not a genuine signature of the writer of the specimen signatures. However, he "highly qualified" this finding on the basis that there was a limited number of specimen signatures, that the specimen signatures provided were PDF copies, and that there was a large date difference between the specimen and the signature on the October 2008 Will.
As stated, there were four reports obtained from Ms Holt.
The purpose of the first report, dated 24 November 2020, by Ms Holt was to determine "whether or not the copy of the Will in the name of Carole June Hudson submitted for examination is a copy of an original Will, particularly with respect to the handwritten entries (including the signatures)".
In the first report, Ms Holt concluded that while the initials and signatures on the undated copy Will, were the signatures of the respective individuals (that is, the deceased, Mr Geoffrey Smith, and Mrs Christine De Bruyne), "it was most likely that none of these people actually signed the questioned document as purported". The most likely explanation, in her opinion, was that the genuine signatures were copied from one, or more, source documents and pasted onto a template of the undated Will and manipulated digitally, using some kind of software, such as Adobe Photoshop, to fit them onto their present positions. She believed the manipulated document was then printed or copied to produce the copy of the undated Will, "giving it the appearance that the questioned signatures were signed on the original of the document".
Overall, she found there was strong support that the document was not a copy of an original Will, but that it was "a composition of elements from more than one document".
The purpose of the second report, dated 2 September 2021 by Ms Holt was "to determine whether or not the original inked 'Geoffrey V. Smith' signature appearing on page 2 of his Will dated 3 October 2017 (i.e., the original 2017 Smith Will) was the source of the 'Geoffrey V. Smith' signature depicted on page 3 of the undated questioned Will of Carol June Hudson."
On 2 September 2021, Ms Holt concluded that the two signatures had a common source, indicating that either one of them was the source for the other, or that both signatures originated from a third signature that was not provided. She was of the firm opinion that "the 'Geoffrey V. Smith' signature from page 2 of his 2017 Will was the source of the 'Geoffrey V. Smith' signature depicted on the questioned Hudson Will, and not vice versa." This was particularly significant in light of her conclusion in her previous report, that the undated copy Will was a composite document.
The purpose of the third report dated 27 September 2021 by Ms Holt was "to determine whether the questioned 2008 Will is an authentic document." In this report, Ms Holt concluded that "the evidence provides very strong support that the questioned 2008 Will is not authentic".
Ms Holt noted the findings provided strong support that the "purported signature of Ms Hudson-Collimore on the questioned 2008 Will was 'traced' onto the document" using the signature from Item M (the Engagement Letter from Prime Accounts), or from some other document as a model, rather than being a naturally executed signature by the writer of the other specimens.
The purpose of the fourth report dated 11 November 2021 by Ms Holt was "to determine whether or not the initials and signature purporting to be that of Ms Janice Poore (…) was written by the writer of the 'J Poore' specimen signatures depicted on the two specimen transfer documents".
Ms Holt concluded that there was strong support for the hypothesis that another person, other than the author of the 'Janice Poore' specimen signatures, had written the signature and initials purporting to be those of Janice Poore on the October 2008 Will. However, this conclusion was said to be limited as only two specimen signatures had been provided, and each of those specimens was a reproduction.
Ms Holt also noted that these findings provided further support for the conclusion in her previous report dated 27 September 2021, that the October 2008 Will was not an authentic document.

Offers exchanged between the parties

On 16 November 2021, the Plaintiff served an Offer of Compromise which was in the following terms; "1. Payment of $1,800,000.00 plus costs as agreed or assessed to the Defendant; and 2. Letters of Administration with the Will Annexed of the 2002 Will to be granted to the Plaintiff."
On 18 November 2021, the Defendant responded by making a counter-offer to settle the proceedings, in the following terms: "1. Letters of administration in solemn form with the Will executed 15 May 2002 annexed be granted to Christopher James Alexander De Bruyne, a beneficiary therein, the named executors having renounced. 2. Amended Statement of Claim otherwise dismissed. 3. Amended Statement of Cross-Claim dismissed. 4. Administration bond dispensed with. 5. Note the beneficiary Christine Michelle De Bruyne predeceased the testator and the parties are the equal residuary beneficiaries of the estate of the deceased. 6. Vacate all existing costs orders made to date. 7. No order as to the costs of the proceedings to the intent each party bear his or her costs of the proceedings (including the claim and the cross claim). 8. Proceedings referred to the Deputy Registrar in Probate to complete the grant in accordance with the rules. 9. Notes the agreement of the parties that: (a) in consideration of the parties consenting to the making of the order herein, the plaintiff will pay to the defendant within 4 weeks of the receipt by him of the grant of letters of administration in his favour in full satisfaction of the defendant's entitlement to half of the residuary estate of the deceased the sum of $2,300,000 with the defendant agreeing that upon receipt of the said sum, the plaintiff shall be entitled to the whole of the balance of the residuary estate of the deceased; (b) the plaintiff will promptly take all necessary steps to comply with any requisition issued by the Supreme Court in respect of the orders herein and in that regard, the defendant will provide all necessary co-operation to assist the plaintiff in obtaining the grant of administration in his favour; (c) for the purposes of satisfying the entitlement of the defendant under Notation 9(a) herein, the plaintiff agrees to charge Commonwealth Bank Account XXXX and St George Bank Account XXXX to the extent necessary to satisfy that entitlement and agrees to take all necessary steps to direct those financial institutions to pay the solicitor for the defendant moneys sufficient to discharge the plaintiff's obligation and the defendant's entitlement under Notation 9(a) herein; (d) upon the payment to the defendant of the defendant's entitlement pursuant to Notation 9(a) herein, the parties release each other and the estate of the deceased from any obligation at law, statute or equity howsoever arising whether during the lifetime of the deceased or after her death and in respect of these orders; (e) the parties will co-operate and promptly take such steps as may be reasonably necessary to give effect to these orders and notations."
It is unclear whether the offer made by the Defendant was rejected by the Plaintiff or whether it lapsed through effluxion of time.
On 10 February 2022, the Plaintiff served another Offer of Compromise, which was almost in identical terms to the previous offer sent by the Defendant except for paragraph 9(a), which was in the following terms: "9. Notes the agreement of the parties that: (a) in consideration of the parties consenting to the making of the order herein, the plaintiff will pay to the defendant within 4 weeks of the receipt by him of the grant of letters of administration in his favour in full satisfaction of the defendant's entitlement to half of the residuary estate of the deceased the sum of $2,000,000 with the defendant agreeing that upon receipt of the said sum, the plaintiff shall be entitled to the whole of the balance of the residuary estate of the deceased;"
It is unclear whether the offer was rejected, or whether it lapsed through effluxion of time.
On 6 April 2022, the Plaintiff, again, served what was said to be an open Offer of Compromise, which was in the following terms: "1) The Applicant/Plaintiff irrevocably withdraws Order and Relief 1; 2) That Order 2 be made, namely that the Probate of the 2002 Will be made; 3) We propose an Independent Administrator with the Will annexed and propose the following: (i) Lauren Gidley (ii) Richard Neal (iii) Equity Trustees 4) Costs be separately argued and determined by the Court if not agreed, upon entry of the above orders."
On 13 April 2022, the Plaintiff revised his offer, and requested a response within 7 days of receipt. The terms of the offer were as follows: "1) The Applicant/Plaintiff irrevocably withdraws Order and Relief 1; 2) That Order 2 be made, namely that the Probate of the 2002 Will be made; 3) We propose an Independent Administrator with the Will annexed and propose the following: (i) Equity Trustees 4) Costs be separately argued and determined by the Court if not agreed, upon entry of the above Orders."
On 28 April 2022, further correspondence from the Plaintiff's solicitor was sent to the Defendant. It was noted that no substantive response to the Plaintiff's offer dated 13 April 2022 had been made by the Defendant, and that the offer was extended until 5:00 p.m. on 13 May 2022.
On 5 May 2022, the Defendant's solicitor sent draft Short Minutes of Order along the lines subsequently made by the Court.
The Plaintiff made his most recent offer on 2 June 2022, with regards to how the burden of costs should be borne, which was in the following terms: "1. The Plaintiff to pay the Defendant's costs on the ordinary basis for the period 21 October 2021 to 6 April 2022. 2. All previous costs orders to be vacated. 3. The parties otherwise pay their own costs."
Neither party submitted that any of the offers was one that was directly relevant to how the burden of the costs should be borne.

The hearing of the application for costs

At the hearing of the costs argument, Mrs M Pringle of counsel, instructed by Ms T Stevanovic, solicitor, appeared for the Plaintiff, whilst Mr A Cheshire SC, instructed by Mr P Campion, solicitor, appeared for the Defendant.
Counsel for each party provided written submissions and made oral submissions at the costs hearing. I am grateful to each for providing those written submissions.
The Plaintiff's costs, calculated on the indemnity basis, were estimated to be $253,648.34. Calculated on the ordinary basis, they were estimated to be $152,189 (inclusive of GST and based upon a hearing with a duration of 1 day).
The Defendants' costs, calculated on the indemnity basis, were estimated to be $282,620 (inclusive of GST, and based upon a hearing with a duration of 1 day).

The Plaintiff's submissions

Counsel for the Plaintiff made reference to the two exceptions to the general rule regarding costs in Probate cases outlined by Powell J in Re Estate of Hodges; Shorter v Hodges (1988) 14 NSWLR 698 at 709. Counsel submitted that the present case was one which fell into the second category of exceptions where "the circumstances led reasonably to investigation of the document propounded" because the documents appeared, at face value, to be testamentary acts of the deceased and so it was appropriate for the Plaintiff to have put them before the Court.
Counsel emphasised the circumstances surrounding what was said to be the October 2008 Will, which had only been located late in the proceedings.
She also submitted that, given the knowledge available to the parties at the time, the conduct of the Plaintiff was reasonable: Re Estate Law Hazel Ruby Grounds, Page v Sedawie [2005] NSWSC 1311 at [32] (Campbell J). She pointed to the Plaintiff's offer to settle the proceedings, on 6 April 2022, following careful consideration of the Defendant's expert report, dated 27 September 2021 and the Plaintiff's expert report dated 14 October 2021, both of which expressed the conclusion that the October 2008 document was not authentic.
Counsel also submitted that the Plaintiff's consent to the grant of administration of the 2002 Will, "represents an appropriate concession on his part at an appropriate time in the proceedings". She submitted that the costs incurred between when the matter had been set down for hearing, on 25 November 2021, and 6 April 2022, when the offer was made, were likely to have been minimal.
She then submitted that the "usual" orders for costs of the proceedings should be made, namely that the costs of both parties should be paid from the estate: Re Estate Law Hazel Ruby Grounds, Page v Sedawie at [30]-[34] (Campbell J).
Counsel submitted, in the alternative, that the Court should order that each party should bear his, and her, own costs, respectively, of the proceedings: Clocchiatti v Pierobon; Estate of John Pierobon [2014] NSWSC 228 at [79] (White J), cited with approval in Estate of Melville Gooley [2021] NSWSC 228 at [4] (Sackar J).

The Defendant's submissions

Senior counsel for the Defendant submitted that unsatisfactory, and suspicious, circumstances surrounding each of the claims made (and eventually abandoned) by the Plaintiff, were such that the Plaintiff could not establish a case, let alone "a very strong case" for an exception to the fundamental principle and ordinary rule, as set out by McHugh J, in Re Minister for Immigration & Ethnic Affairs (Cth); Ex parte Lai Qin (1997) 186 CLR 662 at 624-625 and by Burchett J in ONE.TEL Ltd v Deputy Commissioner of Taxation (2000) 101 FCR 548 at 553; [2000] FCA 270, that as the losing party, the Plaintiff should pay the Defendant's costs and bear his own costs of the proceedings. He referred to what I had written in Starr v Miller (No 2) [2021] NSWSC 685 at [55], [64] and [108].
Senior counsel stated that there could be no doubt that the Plaintiff had "capitulated", by abandoning each of his successive claims, being, initially, to seek to propound what was said to be a copy undated Will, in the alternative, the 2002 Will, then to propound what was said to be the October 2008 Will, and then accepting that a grant should be made in respect of the 2002 Will, as propounded by the Defendant in her Cross-Claim to an independent administrator.
Specifically, he submitted that the conduct of the Plaintiff in conducting the litigation, has been "unreasonable and pervasively so", such that he ought to pay the Defendant's costs on the indemnity basis: Starr v Miller (No 2) at [76]-[86]. He characterised the Plaintiff's conduct as a "relevant delinquency" and "misconduct relating to the litigation" that would warrant an order for indemnity costs: Oshlack v Richmond River Council (1998) 193 CLR 72 at [69] (McHugh J), Mannix v Loumbos [2000] NSWCA 32 at [14] (Foster AJA).
Counsel relied on the following circumstances to support that submission: 1. That the Plaintiff continued to propound the copy Will despite: 1. The irregularities present on the face of the copy document including, that the document was signed but undated; that it was not witnessed by anyone from the firm of M D Nikolaidis & Co; that the name of the deceased in the document was recorded as "Carol June Hudson", which was not how she was frequently known; and that the details of the witnesses below the signature were either not present or appeared to be in a different coloured pen. 2. The circumstances in which the copy document was said to have been discovered, being in one of the boxes the Plaintiff had removed from the deceased's residence. 3. The almost immediate denial by the Defendant that it was the Will of the deceased and immediately informing him that she was going to obtain the report of a handwriting expert. 4. The failure of the Plaintiff to supply the further documents that had been requested by the Defendant. 5. The contents of the first report, dated 24 November 2020, and the second report, dated 26 September 2021, concluding that the copy undated document was not genuine. 6. The unexplained failure of the Plaintiff to serve, or otherwise rely upon, an expert report which he had obtained. 1. There was a delay between the Plaintiff receiving what was said to be the October 2008 Will on 7 September 2021 and when a copy of that document was provided to the Defendant's solicitor on 21 September 2021, one week before the hearing was due to commence. (He mentioned orally the Plaintiff's delay in instructing his own legal representatives of this document.) 2. The Plaintiff produced, and continued to propound, what was said to be the October 2008 Will, despite: 1. The irregularities on the face of the document. 2. The unsatisfactory account explaining how he came into possession of the October 2008 Will, alleging that a person named Mr Kumar had sent him the Will by express post, in circumstances where neither party has been unable to trace Mr Kumar; and that he had not provided the express post envelope in which the documents were allegedly sent. (Senior counsel for the Defendant accepted, however, that whether the Plaintiff had been requested to produce the evidence was not the subject of evidence: Tcpt, 28 June 2022, p 31(1-14)). 3. The Plaintiff's inability to obtain any evidence from any person involved in the preparation, or execution, of what was said to be the October 2008 Will. 4. Before providing a copy of what was said to be the October 2008 Will, the Plaintiff had thought it necessary to obtain a report from a handwriting expert, not in Australia but in the United States of America. 5. In the further report dated 27 September 2021, from the Defendant's expert, Ms Holt concluded that the October 2008 Will was not genuine, a conclusion she maintained in her report dated 11 November 2021. 6. The report dated 14 October 2021, from Mr Dubedat, the Plaintiff's own expert, also had concluded that the October 2008 Will was not genuine. 1. Following all of these events, the Plaintiff filed a further Amended Statement of Claim on 28 October 2021, continuing to propound what was said to be the October 2008 Will. He had only abandoned the claim, on 24 May 2022, several months after the matter was set down for hearing.
Senior counsel for the Defendant submitted that any order in the Defendant's favour should be met out of the Plaintiff's share to the deceased's estate under the 2002 Will. He referred to my decision in Chisak v Presot (No 2) [2021] NSWSC 754.

The Law

Section 98 of the Civil Procedure Act 2005 (NSW) provides: "(1) Subject to rules of court and to this or any other Act: (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. (2) Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court..."
The use of this expression "full power to determine by whom, to whom, and to what extent, costs are to be paid" in the context of s 98(1)(b) "is to be understood as providing the Court with power (unconstrained except to the extent that it must be exercised judicially and in accordance with the relevant legal principles: Oasis Hotel Ltd v Zurich Insurance Company (1981) 28 BCLR 230 at 237 (Lambert JA)), to make a costs order that it regards as just in all the circumstances of the case": QBE Insurance (Australia) Limited v Hotchin [2013] NSWSC 315 at [54] (Bergin CJ in Eq).
The fundamental principle which guides the exercise of the discretion contained in s 98 is that costs should follow the event, and that the successful party is, prima facie, entitled to his, or her, costs against the expense of litigation: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [67] (McHugh J) ("Oshlack"). The discretion to be exercised was described as absolute, unconfined, or unfettered, except that it is required to be exercised judicially, that is, not by reference to irrelevant, or extraneous, considerations, or capriciously, but on facts connected with, or leading up to, the litigation: Oshlack at [34] (Gaudron and Gummow JJ), quoting Latoudis v Casey (1990) 170 CLR 534 at 557 (Dawson J).
Any exercise of the costs discretion is to indemnify, or compensate, the successful party, not to punish the unsuccessful party. It is guided by well-established principles in order to promote consistency in decision-making: Norbis v Norbis (1986) 161 CLR 513 at 519; [1986] HCA 17 (Mason and Deane JJ, with whom Brennan J generally agreed); Northern Territory v Sangare (2019) 265 CLR 164; [2019] HCA 25 at [24]-[25] (Kiefel CJ, Bell, Gageler, Keane and Nettle JJ).
Ultimately, "[t]he disposition which is ultimately to be made in any case where there are competing considerations will reflect a broad evaluative judgment of what justice requires": Gray v Richards [No 2] (2014) 89 ALJR 113; [2014] HCA 47 at [2] (French CJ, Hayne, Bell, Gageler and Keane JJ).
In Commonwealth of Australia v Gretton [2008] NSWCA 117 at [121], Hodgson JA (with whom Mason P agreed) observed that: "… underlying both the general rule that costs follow the event, and the qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the court considers to be the responsibility of each party for the incurring of the costs."
The statement by Hodgson JA reflects Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"), r 42.1 of which states: "Subject to this Part, if the court makes any order as to costs, the court is to order that the costs 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."
UCPR r 42.2 provides: "Unless the court orders otherwise or these rules otherwise provide, costs payable to a person under an order of the court or these rules are to be assessed on the ordinary basis."
In Wright v Apthorpe [2020] NSWCA 300 at [54], Simpson AJA (with whom Bell P and McCallum JA agreed) wrote: "Rule 42.2 is directed, not to courts, and not to the manner in which courts are to exercise the 98(1) discretion, but, rather, to costs assessors. In this respect it does create a presumption, or a default position, but it is not one that affects the exercise of the judicial discretion."

Costs in Probate proceedings

At the outset, it must be remembered that probate litigation is not entirely between parties. The Court is required to determine whether a document of a will-maker, who is dead, is a valid testamentary instrument. There is a public interest in ensuring that the matter is properly proved: Tu v Tu Estate of Tu [2008] NSWSC 458.
As was outlined by White J in Gray v Hart; Estate of Harris (No 2) [2012] NSWSC 1562 at [5]: "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 (…) 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 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.
Two principles that are important in probate litigation should be mentioned. 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.
Any 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, Lord Hanworth 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."
In relation to the question of costs, Powell J, 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 709-710, his Honour 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."
This 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. Mason P, in obiter, at [19], observed that early cases in which the first exception was applied: "…involved testators who left their testamentary papers 'in confusion' but the 'conduct of the testator' could include irrational actions giving rise to reasonable doubts about testamentary capacity provided they were genuinely held by those opposing the grant (see Davies v Gregory (1873) LR 3 P&D 28 at 31; Clarke v Clarke [1901] NSWStRp 42; (1901) 1 SR(NSW) B & P 25; Johnston v Public Trustee (1929) 24 Tas LR 71)."
The first exception referred to above was applied by the New South Wales Court of Appeal in Perpetual Trustee v Baker [1999] NSWCA 244. In that case, the Court of Appeal ordered that both parties' costs, on a trustee or indemnity basis, be paid out of the estate. The reasons given were as follows, per Giles JA and Brownie AJA at [14]: "The two exceptions tend to overlap. As was said by Santow J in In the estate of Moyle: Moyle v Moyle (18 June 1988, unreported), if a testator is by his mental frailty and other circumstances in a position where the circumstances reasonably call for investigation of the validity of the will "in one sense the testator, though usually with no sense of blameworthy fault, has by his or her conduct caused the litigation to occur". A party reasonably but unsuccessfully propounding or challenging the will, and so bringing about the necessary investigation, should no more have to bear his own costs than pay the costs of the other party. So it has been said that where the conduct and habits and mode of life of a testator have given ground for questioning his testamentary capacity the costs of the unsuccessful party should be paid out of the estate, as distinct from being left to be borne by that party (Davies v Gregory (1873) 3 P & D 28; Roe v Nix (1893) P 55; In the will of Millar (1908) VLR 682), and the costs of both sides in testamentary capacity cases have often been allowed out of the estate (In the will of Severs (1887) 13 VLR 572; Phillips v Dundas (Smith J, VSC 4 December 1995, unreported); Redroff v Miegoch (Santow J, NSWSC, 22 April 1996, unreported); re Ryan: Williams v Ryan (1998) VSC, 109; In the will of Ryan: Williams v Ryan (Byrne J, VSC, 23 October 1998, unreported); cf Middlebrook v Middlebrook (1963) 26 ALJR 216 where Dixon CJ and McTiernan, Taylor and Owen JJ ordered that the parties bear their own costs but Menzies J would have ordered that the costs be paid out of the estate)."
In that case, Cole AJA also said at [43]: "Although I disagree with the trial judge's finding of testamentary incapacity, in light of her Honour's finding it must be held that the respondents had reasonable grounds for seeking to impeach the capacity of the testator. In those circumstances the costs of the appellant and the respondent at the trial should each be paid out of the estate. See Browne v M'Encroe (1890) 11 NSWLR Eq. 134 at 146."
Usually, it is easier for an unsuccessful litigant to bring herself, or himself, within the second exception than the first. What is required in the second exception is that the circumstances led reasonably to an investigation. But in such a case, the unsuccessful party will, often, still be left to bear her, or his, own costs.
Sometimes, what is not referred to in dealing with the exceptions referred to in the authorities, is the observation in Davies v Gregory (1873) LR 3 PD 28, at 33, that in order to engage the second exception, it is necessary that all proper steps should have been taken by the party challenging the Will as to the facts of the case. But if, having done so, the party opposing the grant, bona fide believed in the existence of the state of things, which, if it did exist, would justify litigation, then each party must bear her, or his, own costs.
More recently, a different view has been expressed in some probate judgments. In Fielder v Burgess [2014] SASC 98 at [65], Kourakis CJ observed that the costs principles in probate litigation were, arguably, anachronistic in modern times in which there is a greater concern with a need for proportionality in litigation and that it may soon be necessary to reconsider it. (His Honour's view was based upon the fact that the probate exceptions were rooted in the inquisitorial exercise that was conducted by the ecclesiastical courts and the Probate Division, where the Court had to be satisfied of the validity of the will before it could pronounce for the will and have it admitted to probate.)
The view of Kourakis CJ accords with what had been written by Ward LJ in Shovelar v Lane [2011] EWCA Civ 802 at [44]: "I conclude that the so-called rule in probate cases does not apply in the case before us. The probate rule is rooted in the inquisitorial exercise that was conducted by the Ecclesiastical Courts and the Probate Division where the court had to be satisfied of the validity of the will before it could pronounce for the will and admit it to probate. The effect of mutual wills upon the distribution of the estate under a later will which is admitted to probate is a matter for the Chancery Division applying the law of trusts; it is not a matter of probate law and practice. The nature of that litigation is not inquisitorial: it is adversarial and, not infrequently, very adversarial as the two families disunited by death battle for their perceived true inheritance. That is exactly what has happened here."
In Re Tsaousis [2019] VSC 511 at [32]-[33], McMillan J noted: "Although the prima facie rule is that costs follow the event, where the litigation concerns probate, the costs are usually paid out of the estate if the litigation has been caused, or contributed to, by the way in which a testator made his or her testamentary intentions known or alternatively by the conduct of the residuary beneficiaries. Where the testator is not the cause of the litigation, but circumstances exist that reasonably call for an investigation, there is either no order as to the unsuccessful party's costs or costs are paid out of the estate. For there to be reasonable grounds that call for an investigation, it must be established that, when proceedings were commenced, all proper steps were taken to inform the challenger as to the facts of the case and, having done so, the challenger has been led reasonably to the bona fide belief that there was good ground for impeaching a will. If there is no reasonable cause for investigation - that is, if the unsuccessful party has not acted reasonably - then the costs will usually follow the event. The usual rules relating to probate litigation are founded on the public interest in ensuring, on the one hand, that doubtful wills are not lightly admitted to proof by reason of the cost of opposing them and, on the other, the importance of parties not entering into 'fruitless litigation' on the basis that their costs will be paid by others. If the litigation is adversarial litigation, it is common for the Court to apply the usual rule as to costs and order that the unsuccessful party pay the other party's costs. This means that in respect of costs in probate litigation, it can no longer be assumed that the costs will be allowed either wholly or partly out of the estate. This approach reflects the need to ensure that litigation not be encouraged, particularly if it is adversarial litigation between disunited families battling for their perceived true inheritance, together with the concerns frequently expressed on the proportionality of costs in litigation."
(Her Honour, in fact, referred to Davies v Gregory in a footnote in this decision.)
As was said over a century ago in Miller's Probate Practice (Maxwell: 1900 Ed.) at 438-439: "Two questions are to be considered with reference to an application for costs of the unsuccessful party: (1) Was there reasonable ground for litigation? (2) Was it conducted bona fide? Where both these questions can be answered in the affirmative it is the usual practice of the Court, without having regard to the amount or the ownership of the property, to order the general costs to be paid out of the personal estate."
Ultimately, however, any costs order should reflect the way in which the proceedings were conducted and dealt with, or as was noted by Slattery J in Sydney Markets Credit Services Co-operative Ltd v Taylor (No. 3) [2015] NSWSC 1236 at [32], "[t]he costs order should reflect the reality of the contest".

Costs where proceedings are settled

Dealing with a situation where a proceeding has been settled, but the question of costs remains in dispute, one must start with the principles most often referred to being those propounded by McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin at 624-625: "In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order. In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. … Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. ... If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases..." (Footnotes omitted)
It is also necessary to refer to ONE.TEL Ltd v Deputy Commissioner of Taxation, in which Burchett J wrote, at [6]-[8]: "In my opinion, it is 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 to the successful party. It is the latter type of case which more often creates problems, since there may be difficulty in discerning a clear reason why one party, rather than the other, should bear the costs... [I]n Australian Securities Commission v Berona Investments Pty Ltd [(1995) 18 ACSR 772], as Cooper J put it... (at 777), "events had overtaken the proceedings". The relief originally sought was no longer required, and the proceedings were terminated without any decision on the merits. Neither side had won or lost... By contrast with the decisions I have been discussing, the present matter involves a clear winner. The applicants, by their proceeding, sought to challenge the validity of certain notices, and to have them set aside. The respondent, after initially defending those notices, encountered at least an evidentiary difficulty, and acknowledged that they were to be set aside. That means that the applicants have succeeded… [T]he result one party sought was achieved without a hearing, but not by a 'settlement' in the ordinary sense, or as McHugh J used the word, and certainly not by what his Honour called 'extra-curial means'. In any event, if, as the respondent contends, I should determine the question of costs by assessing whether, to borrow the language of McHugh J in Ex parte Lai Qin (at CLR 625; ALR 3), 'both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation [came to an end by the respondent's decision not to seek to uphold his notices]', I would arrive at the same result… On the Deputy Commissioner's own stance now, his stance earlier must have been unreasonable, at least once he had ascertained the true position. Yet that stance was maintained by opposition to the applicant's motion to amend, and by service of the notice to admit facts. It was only abandoned after the applicants defeated the attempt to obtain admissions."
This passage was approved by Hodgson CJ in Eq in Tsaprazis v Goldcrest Properties Pty Ltd [2000] NSWSC 765 at [33], and by Nicholas AJ in Owners Strata Plan 73162 v Dyldam Developments Pty Ltd [2014] NSWSC 1789 at [36]. I referred to these principles in Dehn v Honeman [2015] NSWSC 773 at [48]-[51].
In Ibrahim v PERI Australia Pty Ltd [2013] NSWCA 328, Beazley P (with whom Leeming JA agreed), after identifying a series of cases including those identified above, commented, at [17]: "Although each of those cases related to different facts, the principles that are to be derived from them, in circumstances where a Court is requested to make a costs order, when proceedings have not been heard to termination include the following: whether a party acted reasonably in commencing the proceedings; whether a party had been successful in obtaining interlocutory relief; whether the party sued had acted reasonably; whether the responding party had acted reasonably in defending the proceedings; whether the proceedings terminated after interlocutory relief had been granted; and further, whether the primary judge was satisfied that the party seeking to terminate the proceedings prior to a full hearing had almost a certain chance of success."

Application for Indemnity Costs

As stated, s 98(1)(c) of the Civil Procedure Act distinguishes between costs awarded "on the ordinary basis" or "on an indemnity basis".
There can be no doubt that the Court does have the power to make an order that the costs be calculated on the indemnity basis. The decision to award such costs will depend on the exercise of the Court's discretion in light of the particular circumstances of the case.
Again, ultimately, the question is whether the justice of the case requires the costs to be calculated on that basis: Bullabidgee Pty Ltd v McCleary (No 2) [2011] NSWCA 343 at [10] (Allsop P, Basten & Young JA).
Black CJ, in Re Wilcox; Ex parte Venture Industries (No 2) (1996) 72 FCR 151; [1996] FCA 1942 at 152-153, wrote: "... indemnity costs may properly be awarded where there is some special or unusual feature in the case justifying the Court exercising its discretion in that way. See John S Hayes & Associates Pty Ltd v Kimberly-Clark Australia Pty Ltd (1994) 52 FCR 201 at 203 per Hill J, referring to the judgment of Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225. But as Hill J pointed out in John S Hayes (at 203): '... care must be taken not to circumscribe the discretion by reference to closed categories. It is not a necessary condition of the power to award costs that a collateral purpose be shown. The categories warranting the exercise of the discretion are not closed: Colgate-Palmolive at 233; Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (unreported, Federal Court, 3 May 1991) per French J at p 8; Regata Developments Pty Ltd v Westpac Banking Corporation (unreported, Federal Court, 5 March 1993) per Davies J at p 6. In each case it will be necessary to look at the particular facts and circumstances to see whether an exercise of discretion to order costs on an indemnity basis is warranted.'"
In Di Carlo v Dubois [2002] QCA 225, the Queensland Court of Appeal also referred to a reason to justify departure from the usual rule of costs being calculated on the ordinary basis, as and when the justice of the case might so require, also noting, at [37], that "the categories in which the discretion may be exercised are not closed".
In Chaina v Alvaro Homes Pty Ltd [2008] NSWCA 353, Basten JA (with whom Giles JA and Young CJ in Eq agreed on this point), wrote, at [106]-[113]: "The modern approach to the question of awarding indemnity costs is often sourced to the judgment of Holland J in Degmam Pty Ltd (In liq) v Wright (No. 2) [1983] 2 NSWLR 354. In cases where the winning party has acted extravagantly, thus running up unnecessary costs, it may be inappropriate to require the losing party to pay all of the winner's costs. However, the question of indemnity costs will usually arise in circumstances where it is the losing party which has behaved inappropriately. Degmam itself was a case in which the unsuccessful defendant made factual allegations which were 'false and deliberately concocted by her in an attempt to deny the plaintiff its rights and to shift all blame and legal liability ... from herself': at 358. His Honour continued: 'As well as that, she so conducted herself in the proceedings, by multiplying allegation upon allegation, and by prevaricating in the witness box, as grossly to prolong the litigation, thereby to cause the other parties to incur liability for solicitor and client costs far beyond what they could reasonably have expected to incur in litigation of genuine issues.' These principles were applied in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd [1988] FCA 202; 81 ALR 397 at 400-401, by Woodward J. His Honour referred to the case where an action had been commenced or continued in circumstances where 'the applicant, properly advised, should have known that he had no chance of success': at 401. His Honour explained: 'In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law.' In later cases it has been emphasised that the circumstances identified in Degmam and Fountain are not to be treated as exhaustive of the cases in which indemnity costs may be awarded: see, eg, J-Corp Pty Ltd v Australian Builders Labourers Federation Union of Workers (WA Branch) (No. 2) [1993] FCA 42; 46 IR 301 at 303 (French J). It was sufficient, his Honour said, to enliven the discretion to award such costs that 'for whatever reason, a party persists in what should on proper consideration be seen to be a hopeless case'. An indemnity costs order will be warranted where proceedings were maintained by a party having 'no reasonable prospect of success': see, eg, Baillieu Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359 (Powell J); Huntsman Chemical Co Australia Ltd v International Pools Australia Pty Ltd (1995) 36 NSWLR 242 at 273 (Mahoney JA). The Pilbara Infrastructure Pty Ltd v BGC Contracting Pty Ltd [2007] WASCA 257(S) (Pullin and Buss JJA, and Newnes AJA) held that an indemnity costs order must be justified by 'some special or unusual feature of the particular case': at [5]. Nevertheless, in declining to make such an order, the Court merely held that the respondent could not be accused of 'having some ulterior motive, or wilfully disregarding the facts or the law': at [7]. In Colgate-Palmolive, Sheppard J sought to elucidate the principles to be derived from the earlier cases: at pp 232-233. Nevertheless, more recent case-law generally shows a tendency to grant indemnity costs orders more readily than was the case in the past. That may be seen to be an element of a broader policy directed to limiting the litigation of cases where there are no reasonable prospects of success: see, eg, Legal Profession Act 2004 (NSW), Part 3.2, Div 10. Such a policy is also reflected in the presumption in favour of an order of indemnity costs where an offer of compromise in accordance with court rules has been made by one party but not accepted by the other and where the offeror has bettered the offer in the litigation. Although the court may otherwise order, the fact that the offeree may be at substantial risk as to an adverse costs order, to be assessed on an indemnity basis, if the offer is bettered, places a significant financial incentive favouring careful consideration of such offers and careful assessment of the benefits of settlement. As appears from the discussion in Commonwealth of Australia v Gretton [2008] NSWCA 117 (Beazley JA, Mason P agreeing) at [48]ff, the test of unreasonableness, applied with respect to the consequences of refusing a Calderbank offer are likely to operate also with respect to other aspects of a party's conduct of litigation: see also Gretton at [117] (Hodgson JA), referring to Rosniak v Government Insurance Office (1997) 41 NSWLR 608 at 616 (Mason P, Clarke AJA agreeing). While the general rule remains that costs should be assessed on a party and party basis, it is important that the standard to be applied in awarding indemnity costs not be allowed to diminish to the extent that an unsuccessful party will be at risk of an order for costs assessed on an indemnity basis, absent some blameworthy conduct on its part. A test of unreasonableness should not be upheld on other than clear grounds. Nevertheless, the evaluative judgment thus engaged was satisfied by the findings of fact made by the trial judge and not directly challenged on appeal, except on the basis of other grounds referred to above. In those circumstances, the discretionary power to award costs on an indemnity basis was engaged and it was not demonstrated on House v The King principles that the discretion had miscarried."
In Vector Corrosion Technologies Limited v E-Chem Technologies Ltd [2022] FCA 519 at [38], Jagot J wrote: "…While the purpose of an indemnity costs order remains compensatory, the basis for such an order is a conclusion that the unreasonable conduct of a party (be it bringing or persisting in a case the party should have known was hopeless, causing unnecessary costs to be incurred, prolonging a hearing, bringing or persisting in a case for an ulterior motive, or otherwise) should result in full compensation to the other party for the costs incurred."
In Ling v Beyond Development Group Pty Ltd (No 2) [2022] NSWSC 817, Ward P summarised the principles at [44]-[45]: "Special costs orders will be warranted in certain circumstances, relevantly including where the conduct of the case by the party against whom costs are sought is "plainly unreasonable" or amounts to "relevant delinquency" by the party as a litigant (see Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397; [1988] FCA 202 per Woodward J; Sydney City Council v Geftlick [2006] NSWCA 280 at [90] per Tobias JA, with whom Mason P and Hodgson JA agreed; Dunstan v Rickwood (No 2) (2007) 38 Fam LR 491; [2007] NSWCA 266 at [44] per McColl JA, with whom Beazley JA, as Her Excellency then was, and Ipp JA agreed; Leichhardt Municipal Council v Green [2004] NSWCA 341 at [57] per Santow JA, with whom Bryson and Stein JJA agreed; Oshlack at [44] per Gaudron and Gummow JJ). "Relevant delinquency" in that context does not mean moral delinquency or some ethical shortcoming but delinquency bearing a relevant relation to the conduct of the case (see, for example, White Constructions ACT Pty Ltd (in liq) v White [2004] NSWSC 303 at [11] per McDougall J). Thus, it has been said that indemnity costs may be awarded in cases commenced or continued where there is no chance of success, the claim is "without substance", "groundless", "fanciful or hopeful" or so weak as to be futile (see Vagg v McPhee (No 2) [2013] NSWCA 126 (Vagg) at [31] per Tobias AJA; with whom I agreed). However, it has also been said that "mere weakness of a case will not be sufficient to warrant the exercise of the discretion to award indemnity costs" (see Vagg at [32] per Tobias AJA); and that something more is required (which generally involves some form of wilful conduct) to justify the conclusion that the relevant proceeding should not have been instituted (or not have been pursued). In Refina Pty Ltd v Binnie (Costs) [2009] NSWSC 1098, Brereton J, as his Honour then was, referred at [6] to the concept of a proceeding being doomed to fail as being "whether the proceedings were obviously or manifestly hopeless at the outset, or at some earlier stage". It has been said that there will not lightly be a departure from awarding costs on the ordinary basis (see Vagg at [30] per Tobias AJA)."
The mere existence of facts and circumstances capable of warranting an order for costs calculated on the indemnity basis does not mean that the Court is obliged to make such an order, as costs, ultimately, remain in the discretion of the Court: Bolger v McDermott (No 2) [2013] NSWSC 1330 at [45].
There is no suggestion that the Civil Procedure Act, and the UCPR do not apply to probate proceedings.

Determination

Questions of costs, ultimately, require the exercise of discretion, which, in turn, usually requires an assessment of a wide range of factors. Ultimately, in light of all of the circumstances of the particular case, the Court must decide upon the costs order that best achieves justice between the parties.
Here, I am satisfied that the case is one which has the necessary special, or unusual, features that justify the making of an indemnity costs order in favour of the Defendant against the Plaintiff.
Of course, I have remembered that this is not a case which was resolved between the parties prior to any evidence being served. Substantial evidence, lay and expert, was filed and served, and much of it was referred to on the application for costs. Even so, I remember that all of the evidence was untested by cross-examination.
However, in relation to each claim that he made, the Plaintiff, propounding what was said, in each case, to be a testamentary document, had the onus of proving its validity of each document. As the propounder, he would have had to prove that the deceased had executed each document, that she had testamentary capacity, and that she knew and approved the contents of the document at the time of its execution.
I have set out the matrix of facts, which leads to the conclusion, in the exercise of the Court's unfettered discretion, that, in this case, a special order for costs should be made, bearing in mind the conduct of the Plaintiff in commencing, and continuing, the proceedings, in the face of the evidence, available to him.
Firstly, the Plaintiff did not proceed as he, initially, sought to proceed by propounding an undated copy document. Significant costs were incurred by the Defendant in filing and serving evidence disputing his initial claim to the point that he did not proceed with it.
Following the service of evidence, and his decision not to serve expert evidence, he persisted with a claim which he knew, or ought to have known, if he had received competent legal advice (there being no suggestion that he did not), would not be likely to succeed. Almost 9 months passed, with steps being taken to have the matter prepared for hearing, before he determined that he would not be pursuing his initial claim.
Then, just before the first hearing, the Plaintiff sought to bring, and then brought, a completely different claim, which required the initial hearing dates to be vacated.
The Defendant immediately disputed this claim also, and most expeditiously, she served expert, and other, evidence, which prompted, again just before the hearing, the Plaintiff to agree to an order that there be a grant of administration of the 2002 Will.
Even before the second hearing dates were allocated, the Plaintiff obtained his own expert evidence, which was consistent with the expert evidence that had been served by the Defendant. Again, he persisted with a claim which he knew, or ought to have known if he had received competent legal advice, there being no suggestion that he did not, would not be likely to succeed. Almost 7 months passed, with steps being taken to have the matter prepared for hearing, before he determined that he would not be pursuing his second claim.
In my judgment, in taking the course that he did, the Plaintiff acted in his own interests. This was, in reality, a dispute between the Plaintiff and the Defendant as to how the estate of the deceased should be divided.
Whilst the settlement of the proceedings without a hearing is important, and no final assessment of the merits can be made since the evidence was untested in cross-examination, it is impossible, bearing in mind the preponderance of the evidence read on the costs application, all of which had been served well before final probate orders were made, to accept the Plaintiff's submission that it was the deceased who was the cause of the litigation.
Nor can I accept that the circumstances led reasonably to an investigation of the matter by the Plaintiff. In relation to each of the documents propounded by him, there were, or ought to have been, investigations carried out before the costs of the litigation were incurred. In this regard, it seemed perfectly plain to the Defendant, almost immediately after each claim was brought, that each of the documents propounded by the Plaintiff was not genuine.
Alternatively, the Plaintiff should have not persisted with the proceedings for as long as he did in the face of, in the case of the copy document, expert evidence, that he did not seek to counter by contrary expert evidence, and which led him, eventually, to abandon his case completely.
In the case of the 2008 document, to allow the matter to be listed for hearing, in the face of expert evidence that was broadly consistent in the conclusion that the document was not genuine, does not seem to me to have been reasonable conduct, no matter how misguided his subjective beliefs may have been.
Of course, it must be remembered that the Court is not bound to accept expert forensic evidence and may come to its own conclusion as to the similarities or differences in the signatures in question. However, even the Plaintiff's own forensic document examiner concluded that the document was unlikely to be genuine document.
Furthermore, as I have written "expert evidence is only one part of the body of evidence, documentary and oral, in the case that must be considered. It would be erroneous to treat the expert evidence as being, in some way, decisive, on its own: Gawne v Gawne (1979) 2 NSWLR 449 at 453 and 455-456; or to treat it as if there were no other evidence": Bolger v McDermott [2013] NSWSC 919 at [186].
Without more, and on the basis of the available evidence, the Plaintiff, properly advised, should have appreciated his prospects of success were not good.
The Defendant's suspicion, from the outset, reasonably led to her holding the genuine belief that each document was invalid. She did not adopt tactics of technical, or artificial, objection. Her concerns, supported by the evidence which she promptly served, although untested by cross-examination, resulted in the Plaintiff, ultimately, deciding to not continue with each of the claims that he had made.
Furthermore, the Defendant's evidence that there was good ground for impeaching each document being propounded by the Plaintiff, was sufficient, without a hearing, to cause him to agree, very close to the final hearing, to the grant of administration of the 2002 Will.
The Plaintiff should have appreciated the strength of the ground, in each case, upon which the Defendant opposed his claims for relief. Additionally, when he had been unable to locate, or directly contact, Mr Kumar, or any of the persons said to be attesting witnesses to the deceased's signature on the 2008 document, the high probability of him being unable to successfully propound the 2008 document should have been obvious.
In all the circumstances, the Plaintiff did not act reasonably in commencing, and maintaining, the proceedings. On the other hand, the Defendant did act reasonably in defending the proceedings.
Finally, in exercising my discretion, I have not forgotten that the Plaintiff's conduct in the case caused a substantial delay in the administration of the deceased's estate.
In my view, this is a case in which a different order is specially warranted. The Defendant should not have to bear the costs of the proceedings out of her share of the deceased's estate. In this, it is to be remembered that the costs ordered are compensatory, in the sense that they are awarded to indemnify her against the expense to which she has been put by reason of the legal proceedings.
The submissions made by Mr Cheshire SC, on behalf of the Defendant, to which I have earlier referred, not otherwise referred to in this part of the reasons, reinforce the conclusions reached. In stating this, I have taken into account the objective circumstances. I have not determined the dispute that the parties have sought to avoid by the settlement of the proceedings but it is clear that the Plaintiff, effectively, surrendered.
The Court: 1. Makes no order as to the Plaintiff's costs, to the intent that he bear his own costs of the proceedings. 2. Orders that the Plaintiff pay the Defendant's costs, calculated on the indemnity basis, of the proceedings. 3. Orders that the Defendant's costs be paid out of the share of the deceased's estate that passes to the Plaintiff under the 2002 Will of the deceased.

Amendments 08 July 2022 - [35] - replaced 'Will and Estates' with 'Commercial Litigation'. 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: 08 July 2022

(The Supreme Court Rules 1970(NSW)

Legal Profession Act 2004(NSW)

(2007) 38 Fam LR 491

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