Succession - Probate and letters of administration - Costs - General principles - Intestate estate - Action for grant of letters of administration brought by paternal grandfather for benefit of child - Mother of child asserted entitlement to whole estate as partner of deceased - Mother successful at first instance but unsuccessful on appeal - Whether costs should follow the event - Whether costs of mother should be paid out of estate.

Autodesk Inc v Dyason [1993] HCA 6; (1993) 176 CLR 300

Burrell v The Queen [2008] HCA 34, 238 CLR 218

Calderbank v Calderbank [1975] 3 All ER 333

DJL v Central Authority [2000] HCA 17, 201 CLR 226

Electrolytic Zinc Company of Australasia Limited v Fisher [1989] TASSC 35

Johnston v Todd [1845] EngR 833; (1845) 8 Beav 489, 50 ER 192

Re Harrison's Share under a Settlement [1955] 1 All ER 185

Re Grazebrook [1928] VicLawRp 27; [1928] VLR 212

Sheil v Doneley [1903] NSWStRp 12; (1903) 3 SR (NSW) 60

Judgment Number: [2024] TASFC 6

1. That the defendant to action no 1787/2022 pay the costs of the plaintiff of and incidental to that action on a party/party basis.
2. That the costs of the plaintiff of and incidental to that action be paid out of the estate of the late HMW on an indemnity basis, to the extent that those costs are not recovered from the defendant.
3. That the respondent to this appeal be indemnified from the estate of the late HMW in respect of the costs of the appellant of and incidental to the appeal paid by her, to the extent that she is not indemnified in respect thereof from the Appeal Costs Fund.
4. That the appellant's costs of and incidental to this appeal be paid from the estate of the late HMW on an indemnity basis, to the extent that those costs are not recovered from the respondent pursuant to the order for costs made on 3 May 2024.

1. In this appeal, which was a successful one, each party has applied for orders as to costs, both in respect of the appeal and the action that gave rise to it.
2. The proceedings concerned the estate of a man ("HMW") who took his own life. He did not leave a will. The respondent ("SRP") lived with him in a marriage-like relationship until shortly before his death. She and the deceased had a son who was two years old at the time of the death. A controversy arose as to whether the couple were in a "significant relationship" within the meaning of the Relationships Act 2003 at the time of the man's death. The respondent contended that they were, and that the whole of the estate should pass to her on intestacy. If the relationship was not a significant relationship at the time of death, the child was entitled to the whole of the estate on intestacy.
3. The child's paternal grandfather ("GFR") brought an action contending that the boy was entitled to the whole of the estate, and seeking a grant of letters of administration to himself and another relative. At first instance the respondent was successful. Holt AsJ dismissed the action and made an order that letters of administration be granted to her: GFR v SRP [2023] TASSC 15.
4. The grandfather appealed. He was successful. The Full Court allowed the appeal and set aside the orders of Holt AsJ: GFR v SRP [2024] TASFC 2.
5. Initially, on 3 May 2024, this Court ordered that letters of administration be granted to the appellant; that the respondent pay the appellant's costs of and incidental to the appeal; and that an indemnity certificate be granted to her under the Appeal Costs Fund Act 1968. The costs order was neither opposed nor consented to.
6. Counsel for the respondent applied for an order that the appellant pay the costs of the action. Counsel for the appellant asked for some time to consider the issue of the costs of the action. As a result, this Court ordered that any costs applications relating to the action be adjourned sine die.
7. Subsequently it was realised that it was not appropriate for letters of administration to have been granted to the appellant, and that the Court needed to hear the parties as to who should administer the estate. On 20 May 2024, after hearing counsel, this Court rescinded the order for letters of administration to be granted to the appellant, ordered that letters of administration be granted to the Public Trustee, and published revised reasons for judgment. All questions of costs were adjourned sine die at that time. The parties were directed to make written submissions as to costs.
8. Subsequently the appellant sought orders as to costs to the following effect:
   • That the respondent pay the appellant's costs at first instance on a party/party basis.
   • That the estate of HMW pay the appellant's costs at first instance on the indemnity basis, to the extent that those costs are not recovered from the respondent.
   • That the respondent be indemnified in respect of the appellant's party/party costs of the appeal (which she had already been ordered to pay) "first from the Appeal Costs Fund and second from the estate of [HMW]".
   • That the estate of HMW pay the appellant's costs of the appeal on the indemnity basis, to the extent that those costs are not recovered from the respondent.
9. Thereafter the respondent sought orders to the following effect:
   • That the parties' costs of the first instance proceedings be taxed on a solicitor and client basis and paid out the estate of HMW.
   • That the order as to costs made on 3 May 2024 be vacated.
   • That the appellant's costs of the appeal be paid by the estate of HMW on a solicitor and client basis.
   • That an indemnity certificate be granted to the respondent under the Appeal Costs Fund Act.
   • That the respondent be indemnified by the estate of HMW for any surplus solicitor and client costs of the appeal incurred and not covered by the indemnity under the Appeal Costs Fund Act.
10. Since both parties were seeking orders for the payment of costs from the deceased estate, the Public Trustee was afforded an opportunity to make submissions as to the competing costs applications. Counsel for the Public Trustee has informed the Court that his client supports the appellant's applications and does not wish to make any separate submissions as to costs.
11. The parties and the Public Trustee all accept that the appellant should not be left out of pocket since he instituted and prosecuted the action and the appeal for the benefit of his grandson and not for any personal benefit. The parties and the Public Trustee all accept that he should receive at least some of his costs out the estate.
12. The parties and the Public Trustee also all accept that the respondent should not be left out of pocket in relation to the appellant's costs of and incidental to the appeal. The position of the appellant and the Public Trustee is that she should be required to pay the appellant's party/party costs of and incidental to the appeal in accordance with the order of 3 May, but that she should be indemnified in respect of those costs, to the extent possible, from the Appeal Costs Fund, with an indemnity for the balance from the estate. The respondent contends that she should not have to pay any of the appellant's party/party costs in relation to the appeal, but that he should get his solicitor/client costs of the appeal out of the estate.
13. The scope of the matters in controversy can be summarised as follows:
    • The appellant contends that the respondent should pay his party/party costs of the proceedings at first instance, but she opposes such an order.
    • The respondent contends that both parties' costs of the first instance proceedings should be paid out of the estate on a solicitor/client basis, but the appellant opposes any payment out of the estate in respect of the respondent's costs of those proceedings.
    • The respondent contends that the Court should rescind the order requiring her to pay the appellant's costs of and incidental to the appeal, but the appellant opposes the rescission of that order.
    • The respondent contends that she should have an indemnity certificate under the Appeal Costs Fund Act even if she is not required to pay any of the appellant's costs relating to the appeal.
    • The respondent contends that she should be indemnified from the estate for her solicitor/client costs of the appeal, to the extent that they are not recovered from the Appeal Costs Fund. That is opposed by the appellant.
14. The making of the orders sought by the respondent in relation to the costs of the appeal would involve this Court rescinding the order that it made on 3 May 2024 that the respondent pay the appellant's costs of and incidental to the appeal and that she be granted an indemnity certificate under the Appeal Costs Fund Act. Since no formal order has been prepared and sealed, we have the power to make the orders sought, though the power to rescind final orders should be exercised sparingly: Autodesk Inc v Dyason [1993] HCA 6; (1993) 176 CLR 300 per Mason CJ at 302, Brennan J at 308, Gaudron J at 322; DJL v Central Authority [2000] HCA 17, 201 CLR 226 at [32]- [33]; Burrell v The Queen [2008] HCA 34, 238 CLR 218 at [17]- [22]; Re Harrison's Share under a Settlement [1955] 1 All ER 185 at 192_;_ Electrolytic Zinc Company of Australasia Limited v Fisher [1989] TASSC 35.
15. The orders sought by the respondent reflect a misunderstanding as to the scheme of the Appeal Costs Fund Act. Section 8 of that Act empowers the Supreme Court to grant an indemnity certificate in respect of an appeal to a respondent to the appeal. Section 9(1) deals with the effect of an indemnity certificate. In s 9(1) the possibility that a respondent might be granted an indemnity certificate without first having been ordered to pay costs of an appellant is not contemplated. The section is designed to deal with a situation where an appeal succeeds because of error on the part of a court or tribunal below, and the successful appellant obtains an order for payment of costs by a respondent. The sub-section provides relevantly as follows:

"(1) Subject to this Act, where a respondent to an appeal has been granted an indemnity certificate, the certificate entitles the respondent to be paid from the Fund -

(i) of the appeal in respect of which the certificate was granted; and

being costs ordered to be paid and actually paid by or on behalf of the respondent;

(i) of the appeal in respect of which the certificate was granted; and

not being costs that were ordered to be paid by any other party; and

(c) where the costs referred to in paragraph (b) are taxed at the instance of the respondent, an amount equal to the costs incurred by him or on his behalf in having those costs taxed."

1. It is appropriate that an indemnity certificate be granted because the orders appealed from have been set aside as a result of error. It is both just and in the interests of both parties that they receive the maximum advantage of the availability of funds from the Appeal Costs Fund.
2. The Court has a general discretion to award costs by virtue of s 12 of the Supreme Court Civil Procedure Act 1932. Significantly, s 12(2) provides as follows:

"(2) Subject as provided in subsection (1) the costs of all proceedings whatsoever in the Court, including the administration of estates and trusts, shall be in the discretion of the Court or judge, and the Court or judge shall have full power and authority to determine by whom or out of what estate, fund, or property, and to what extent such costs are to be paid."

1. As a general rule, courts apply the principle that "costs follow the event". That is to say an unsuccessful party will ordinarily be ordered to pay a successful party's costs. That rule is frequently departed from in cases concerning deceased estates. The courts seek to strike a balance to ensure that doubtful claims should not easily succeed because of the cost of opposing them, while at the same time ensuring that parties will not be tempted to prosecute unmeritorious claims or defences because of a likelihood that their costs are likely to be met or defrayed out of the estate. See Dal Pont, Law of Costs, 5th ed, Lexus Nexus Australia, 2021, at [10.18].
2. The outcome of the competing applications depends on how we characterise this litigation. The critical question was whether the deceased's relationship with the respondent had ceased to be a "significant relationship" before his death. Was this a case in which each party came to the Court in good faith seeking the resolution of a difficult question? Or should we characterise the litigation as contentious all-or-nothing litigation?
3. The appellant contends that we should treat this litigation as ordinary contentious litigation and depart from the general rule that costs follow the event only to the extent of making orders for indemnities out of the estate. His contentions can be summarised as follows:
   • The respondent sought a personal benefit by opposing the action and prosecuting a counterclaim.
   • An order for the payment of her costs out of the estate would, for all practical purposes, require the child to meet her costs.
   • The proceedings at first instance were acrimonious. The parties did not cooperate to place evidence before the Court to seek a determination.
   • The respondent was well aware of the facts that led the Full Court to find against her.
   • She sought an order for costs against the appellant personally when she succeeded at first instance.
   • In resisting the appeal, she unsuccessfully contended that, as a matter of law, the appellant, as the father of the deceased, was not an appropriate person to have applied for letters of administration. If that submission had succeeded the Full Court would have been precluded from considering the merits of the orders under appeal.
   • In settlement negotiations she proposed that she receive 80%, and later 70%, of the estate.
   • The appellant made an offer of settlement on 24 April 2023 which was not accepted by the respondent. He offered to settle on the basis that the respondent abandoned her claims in the proceedings, and consented to him and his wife being appointed as administrators and to the child being entitled to the whole estate on intestacy, in return for which an order would be made for her party/party costs to be paid out of the estate. That offer was only open for a very short time. There was an unsuccessful mediation on Friday 21 April 2023. The trial was due to start on Wednesday 26 April. Tuesday 25 April was a public holiday. The offer was made on Monday 24 April at 10.14am and remained open only until 5pm. It was made on a "without prejudice except as to costs" basis in accordance with Calderbank v Calderbank [1975] 3 All ER 333.
4. The respondent's contentions can be summarised as follows:
   • It was inevitable that contentious proceedings would have to be instituted.
   • The determination of her claim was necessary for the administration of the estate.
   • The deceased's conduct, including him raping her, was a significant contributor to the litigation.
   • There was significant evidence to support her contention that the significant relationship had not ended at the time of death.
   • Since she is the sole carer and provider for the child, her prosecution of her case was not just for her own benefit but for the child as well.
   • It was not unreasonable for her not to accept the Calderbank offer of 24 April 2023.
   • She had made reasonable efforts to settle all her claims in relation to the estate, without success. Apart from her claim to be entitled to the whole of the estate on intestacy, she had, and still has, a claim to be entitled to a part interest in the estate by virtue of a constructive trust and/or a resulting trust, and a claim for damages for battery. She also has a claim in respect of the deceased's superannuation.
5. Neither party objected to the Court having regard to the material relied upon by the other in relation to offers of settlement. It would have been highly desirable for a settlement to have been negotiated in relation to all the respondent's claims. It remains highly desirable that a total settlement should be negotiated in respect to those of her claims that are still outstanding. However this Court is not in a position to assess the reasonableness or otherwise of the proposals that were made on behalf of the respondent. We do not have evidence that would enable us to reach conclusions as to the likely outcomes of the respondent's other claims, and it would not be appropriate for us to undertake such a task. It would therefore not be appropriate for us to attach any significant weight to the fact that the respondent made attempts to achieve a total settlement, or to the size of her demands.
6. Because the offer of 24 April 2023 was open for so short a period and at such a late stage in the litigation, we do not regard the respondent's non-acceptance of that offer as a significant factor.
7. There are some old authorities in which it has been held that next-of-kin who succeed in establishing their claims on an intestacy should be paid their costs out of the estate, but that an unsuccessful claimant in an inquiry as to an intestate's next-of-kin should not receive costs out of the estate unless the investigation has benefitted the estate: Re Grazebrook [1928] VicLawRp 27; [1928] VLR 212 at 213; Sheil v Doneley [1903] NSWStRp 12; (1903) 3 SR (NSW) 60 at 64. In Johnston v Todd [1845] EngR 833; (1845) 8 Beav 489, 50 ER 192, Lord Langdale MR made an order for costs in favour of some plaintiffs who unsuccessfully claimed that they were the next-of-kin of a testator following a partial intestacy. However his Lordship said, at Beav 493, ER 194:

"... it was so doubtful who was right, and so impossible to decide the matter without careful investigation, that if they had not brought forward their claims, there could have been no adjudication."

1. The fundamental question that we have to decide is whether we are persuaded that we should depart from the usual position that costs should follow the event in relation to the appellant's first instance costs and all the respondent's costs. We are not so persuaded. Although the respondent had an arguable case, this was contentious all-or-nothing litigation that was robustly conducted. There was a four-day trial involving the cross-examination of many witnesses. It was not a proceeding in which the parties worked together to provide evidence of uncontested facts to obtain a determination of a judicial officer. The respondent even sought a costs order against the appellant personally after she succeeded at first instance.
2. The appeal was also robustly conducted, to the extent that the respondent sought to avoid the possibility of this Court re-determining the question of when the significant relationship ended by making a submission as to the appellant never having had appropriate standing to bring an action seeking a grant of letters of administration.

1. The orders made on 3 May for the respondent to pay the appellant's costs of the appeal, and to receive an indemnity certificate under the Appeal Costs Fund Act will not be disturbed. In accordance with the submissions of the appellant, we make the following orders:
   1. That the defendant to action no 1787/2022 pay the costs of the plaintiff of and incidental to that action on a party/party basis.
   2. That the costs of the plaintiff of and incidental to that action be paid out of the estate of the late HMW on an indemnity basis, to the extent that those costs are not recovered from the defendant.
   3. That the respondent to this appeal be indemnified from the estate of the late HMW in respect of the costs of the appellant of and incidental to the appeal paid by her, to the extent that she is not indemnified in respect thereof from the Appeal Costs Fund.
   4. That the appellant's costs of and incidental to this appeal be paid from the estate of the late HMW on an indemnity basis, to the extent that those costs are not recovered from the respondent pursuant to the order for costs made on 3 May 2024.