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[2008] WASC 161
Supreme Court of WA
2008-08-07
Martin CJ
Original judgment source is linked above.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION : FAZIO -v- FAZIO [2008] WASC 161
Costs - Discretion as to costs - O 66 r 1 Rules of the Supreme Court 1971 (WA) - Indemnity costs - Unreasonable conduct - No clearly identified ground of opposition to grant of probate - Probate proceedings
Defendant pay the costs of the first plaintiff and those costs are to be taxed on an indemnity basis
(This judgment was delivered extemporaneously on 25 July 2008 and has been edited from the transcript.)
1 The question that arises for my determination today is the order that should be made in relation to the costs of these proceedings, which were substantively resolved by consent judgment made some time ago.
2 The proceedings were commenced in December 2007 by a writ seeking the grant in solemn form of probate of the will of the late Vincenzo Fazio dated 18 September 2006 (the will). Those proceedings were necessitated because of the lodgement of a caveat by the defendant against the estate of the late Vincenzo Fazio on 15 October 2007. In that caveat, the defendant asserted that in making the will, the late Vincenzo Fazio was unduly influenced by the first-named first plaintiff Ridolfo Fazio.
3 There are four other assertions made in the caveat with respect to the dispositions made in the will that appear to me to be irrelevant to the question of the validity of the will and it is therefore not necessary for me to particularise those assertions.
4 Between the lodgement of the caveat and the commencement of these proceedings, there was correspondence between the parties in which the solicitors for the plaintiffs requested withdrawal of the caveat and foreshadowed that proceedings would be commenced if the caveat was not withdrawn.
5 An amended statement of claim was filed and served in these proceedings on 8 February 2008 and on 22 February 2008 a defence was served. That defence pleaded no substantive issue in relation to the grant of probate and, in particular, did not identify any basis for challenging the will, the validity of the will or the grant of probate.
6 Following the filing of the defence, on 25 February 2008, the first plaintiffs filed affidavits of scripts and on 10 March 2008 the defendant filed an affidavit of scripts. Also on 10 March 2008, one of the prospective executors of the will nominated a third party (who is now the second plaintiff) to take his place as an executor of the will and on 13 March 2008, the defendant was advised of that nomination. On 26 March 2008, an affidavit of one of the subscribing witnesses to the will was filed deposing to the due execution of the will and her belief as to the testamentary capacity of the testator.
7 On 17 April 2008, the matter was admitted to the CMC list and came before me for programming orders. I was concerned at the unsatisfactory state of the pleadings because it did not seem to me that the pleadings had served their purpose of identifying the issues in the matter. I inquired rhetorically of counsel for the defendant as to why judgment should not be entered against his client, he having failed to identify any substantive ground of opposition to the grant of probate, especially having regard to the affidavit evidence that had by then been filed.
8 In response to that rhetorical question, counsel for the defendant sought an opportunity within which to amend the defence to plead a substantive defence. I allowed 14 days to enable that to occur. That period was to expire on 1 May 2008.
9 On that day, the solicitors for the defendant wrote to the solicitors for the plaintiffs stating, amongst other things:
Our client's defence [of these proceedings] ... has been on the grounds that he considers that Vincenzo Fazio did not have the capacity to make the Will and that Vincenzo Fazio did not understand the contents of the Will.
10 I note that no reference is made in this letter to the assertion that there was undue influence exerted by the first-named first plaintiff over the testator, that having been the only ground identified in the caveat that would go to the invalidity of the will.
11 The letter of 1 May 2008 goes on to assert that one of the concerns that had motivated the defendant in his opposition to the action was the identity of the proposed executors and trustees of the estate, and suggested that those concerns had been alleviated by the nomination of the independent third party who became the second plaintiff. The extent to which that can in fact have impacted upon the course taken by the defendant must be viewed in light of the fact that the defendant was aware of that nomination as from 13 March 2008 but, nevertheless, persisted in his opposition to the grant of probate.
12 At all events, the letter of 1 May 2008 went on to propose consent orders for the grant of probate and in the result, consent orders to that effect were made on the basis that the costs of the proceedings be reserved. The question of those costs is now before me.
13 The general rule with respect to costs is that the court has a wide discretion in relation to the award of costs to parties: Supreme Court Act 1935 (WA), s 37(1). However, O 66 r 1 of the Rules of the Supreme Court 1971 (WA) provides that without limiting the generality of that discretion, the court will generally order that the successful party to any action or matter recover his costs.
14 The first question I need to address is where the burden of costs should fall as between these parties. It seems to me that the plaintiffs have been successful in their proceeding. They sought the grant of probate in solemn form. These proceedings were necessitated because of the lodgement of the caveat by the defendant and in the result the defendant withdrew any opposition to the grant of probate in solemn form and consented to an order in those terms.
15 There are sometimes circumstances in relation to probate proceedings in which it is more appropriate that costs be ordered to be paid out of the estate but in my opinion this is not one of those circumstances. These proceedings would not have been necessitated but for the action of the defendant in lodging the caveat. The proceedings were ultimately not contested. They came about as a consequence of the position adopted by the defendant. It seems to me, therefore, that the ordinary rule should apply and that the defendant should be ordered to pay the plaintiffs' costs of the proceedings.
16 The next question that arises is whether the defendant should also be ordered to pay those costs on an indemnity basis. There is discretion with respect to making orders of that kind, although the authorities establish that, in general, that discretion will not be exercised unless there is something in the conduct of the party against whom the order is sought that makes it appropriate for the court to take the unusual step of ordering indemnity costs: Flotilla Nominees Pty Ltd v Western Australian Land Authority [2003] WASC 122 (S); (2003) 28 WAR 95 [25], SDS Corp Ltd v Pasdonnay Pty Ltd [2004] WASC 26 (S2), Taylor-White (an infant) v Taylor-Bowman [2004] WASC 281 [24] - [31]. An example of such conduct would be where the conduct of that party has been unreasonable and that unreasonable conduct has magnified the costs of the proceedings or where there is something in the conduct of the party that merits censure or reproof or the defence or the claim has been pursued for some collateral or improper purpose.
17 In this case, the ground upon which indemnity costs are sought is essentially that the conduct of the defendant was unreasonable because there was no clearly identified ground of opposition to the grant of probate. It is argued that the unreasonable conduct of the defendant necessitated the incurring of costs so that in the result the estate will be out of pocket unless an indemnity costs order is made.
18 When I assess that proposition, I start firstly with the caveat and note that the only ground in the caveat filed in October 2007 that went to the validity of the will was the assertion of undue influence. As I have noted, in the letter of 1 May 2008 which is the first occasion upon which there was any substantive indication of the grounds upon which probate was opposed, there was no reference to undue influence; rather, the assertion was lack of testamentary capacity and a lack of comprehension of the contents of the will.
19 It is I think of particular significance that the defence that was filed on 22 February 2008 advanced no substantive ground of opposition and it was not until I threatened to enter judgment against the defendant for want of the pleading of a substantive defence that any attempt was made to identify a ground of opposition to the grant of probate.
20 When on 1 May 2008 some attempt was made to identify the grounds of opposition, those grounds were different to the ground enunciated in the caveat. A further attempt has been made to identify the grounds upon which the defendant opposed the grant of probate in an affidavit sworn by the defendant on 22 July 2008 in opposition to the plaintiffs' application for indemnity costs. In par 6 of that affidavit, the defendant proposes that as a result of his personal contact with the late Vincenzo Fazio, he was aware that Mr Fazio could not fluently read or write in English and had significant difficulty in doing so; that his native language was Sicilian which is a distinct dialect of Italian; that he could not have understood the terms and effect of the will dated 18 September 2006 unless it was read and explained to him in the Sicilian dialect; and then in par 6.4, it is stated, 'Rudy Fazio exercised significant influence over Vincenzo Fazio'.
21 In that affidavit, essentially two propositions are advanced: first, lack of comprehension by the testator of the terms of the will and, second, the assertion of the exercise of significant influence. It is I think significant that in the affidavit no reference is made to lack of testamentary capacity, despite the fact that this was one of the grounds enunciated in the letter of 1 May 2008 in the grounds for opposition to the grant of probate.
22 It is also I think significant that in the affidavit the words 'undue influence' are not used. There is simply an assertion of the exercise of 'significant influence', so there is no affidavit asserting the proposition advanced in the caveat to the effect that the validity of the will was impugned by the exercise of undue influence.
23 All that one is left with then is the proposition that Mr Fazio could not have comprehended the will unless it was read and explained to him in the Sicilian dialect and, of course, the defendant had no way of knowing whether or not that occurred. No assertion to this effect was made in the caveat.
24 In the result, it seems to me that when I have regard to the chain of assertions to which I have referred - the caveat, the letter of 1 May 2008 and the affidavit of 22 July 2008 - the shifting sands in relation to the grounds asserted as providing the basis for the defendant's opposition to these probate proceedings lead me to draw an inference to the effect that there has not been a substantive ground for opposition to these proceedings. That is the inference that I think is available to be drawn from the sequence of events to which I have referred and I am prepared to draw it.
25 Accordingly, I conclude that the defendant's conduct has been unreasonable and I award costs in favour of the first plaintiffs to be taxed on an indemnity basis.
(2003) 28 WAR 95