Page v Sedawie [2005] NSWSC 1311
Re Estate of Hodges
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Original judgment source is linked above.
Catchwords
Page v Sedawie [2005] NSWSC 1311
Re Estate of Hodges
Judgment (3 paragraphs)
[1]
Solicitors:
Brydens Lawyers up to 6 October 2020 then Armstrong Legal (Plaintiff/Cross-defendant)
Eakin McCaffery Cox Lawyers (First Defendant/Cross-claimant and Second Defendant)
File Number(s): 2018/125504
[2]
Judgment
On 16 July 2020, I published my reasons (the Principal Reasons)1 for concluding that Gayle Maria Linney, the first defendant and cross-claimant, was entitled to a grant of probate in solemn form in respect of a will of the late Hope Marie Linney dated 14 July 1993, a codicil to that will dated 1 September 2001 and a second codicil to that will dated 29 August 2011. On 27 August 2020 the following orders were made:
Order that the grant of probate issued by the Court on 25 October 2017 in respect of the estate of the late Hope Linney, who died on 16 August 2017 ("the deceased"), be revoked.
Order that the first defendant/cross-claimant, Gayle Maria Linney ("the first defendant/cross-claimant"), deliver up the revoked grant to the Probate Registry within 7 days of the making of these orders.
Order that probate in solemn form be granted to the first defendant/cross-claimant of:
a. The will of the deceased dated 14 July 1993;
b. The codicil of the deceased dated 1 September 2001; and
c. The codicil of the deceased dated 29 August 2011.
Order that the proceedings be referred to the Probate Registrar to complete the grant.
Order that any requirement for further compliance with the Probate Rules (Supreme Court Rules 1970 NSW, SCR Pt 78) be dispensed with.
Order that the Amended Statement of Claim filed on 11 February 2020 be dismissed.
The only question remaining is the costs of the proceedings. The parties have agreed that costs be decided "on the papers" following the receipt of written submissions. In these reasons, I shall use terms as they were defined in the Principal Reasons.
Gayle and Denis contend that the appropriate orders for costs are as follows:
Order the plaintiff to pay the defendants' costs of the proceedings on the ordinary basis as agreed or assessed;
Order the difference between the costs recovered from the plaintiff and the total of the defendants' costs, on the indemnity basis, be paid out of the estate of the Testatrix.
Maureen contends that the costs of both the plaintiff and the defendants of the claim and the cross-claim should be paid on the indemnity basis from the estate of the Testatrix.
Gayle and Denis were represented by one set of lawyers. The costs of the proceedings incurred by Gayle and Denis as at the date of the Principal Reasons amounted to $181,550.47, comprised as follows:
solicitors' professional fees $106,224.80
counsel's fee $65,351.00
other disbursements $9,974.67
The costs incurred by them from the date of the principal Reasons up to 24 August 2020 amounted to $7,422.28 comprised as follows:
solicitors' professional fees $6,217.78
counsel's fee $1,204.50
On that basis, the costs incurred by Gayle and Denis up to 24 August 2020 amounted to $188,972.75. That is the amount to which they claim that they would be entitled on the indemnity basis.
The costs incurred by Maureen as at the date of the Principal Reasons amounted to $160,023.43, comprised as follows:
solicitors' professional fees $105,114.25
counsel's fees $48,730.00
other disbursements $6,179.18
In addition, Maureen owes her former solicitors the sum of $22,997.50, comprised as follows:
solicitors' professional fees $7,471.00
counsel's fees $15,526.50
Between the date of judgment and 25 August 2020, Maureen incurred further costs of $5,788.00, comprised as follows:
solicitors' professional fees $3,500.00
counsel's fees $2,288.00
Accordingly, the total costs incurred to which Maureen claims to be entitled on the indemnity basis as at 25 August 2020 is $188,808.93.
The ordinary rule that costs follow the event is not necessarily applicable in a probate suit, which involves the exercise of a jurisdiction derived from the ecclesiastical courts of England. In the exercise of its probate jurisdiction, the Court is not simply resolving claims between the parties to the proceedings. Rather, a grant of probate has effect as against the whole world and not simply as the resolution of a dispute between parties. Thus, the grant affects title to property that is binding not only on the parties to a suit but also on non-parties. Accordingly, the Court must be satisfied that an instrument propounded as a testamentary instrument of a free and capable testator is in fact just that. [1] In a sense, a person who, on rational and reasonable grounds, appears to oppose a grant thereby assists the Court by acting as a contradictor.
In a probate suit, costs do not necessarily follow the event where, for example, the testator is "the cause" of the litigation or the circumstances justify an investigation concerning the will. Thus, where a testator has, or those interested in the residue of a testator's estate, have been the cause of litigation, in a relevant sense, it may be appropriate that the costs of a party who unsuccessfully challenges a will be paid out of the estate. Cause in that sense goes beyond fault or blameworthiness. [2] A testator may be considered to be the cause of the litigation because the conduct, habits and mode of life of the testator gave rise to doubts that justify the challenging of the will. [3] Further, if the circumstances reasonably call for an investigation of a will, it may be appropriate for the costs to be borne by those who incurred them rather than by an unsuccessful party: [4] if circumstances lead reasonably to an investigation of a matter, the costs may be left to be borne by those who have incurred them. [5]
There is an overlap between those two exceptions. For example, the testator's frailties and other circumstances may be the "cause" of the circumstances that justify an investigation. [6] If a case falls within the area of overlap, one of the exceptions suggests that the appropriate order concerning costs should be different from the order that is suggested by the other exception. In the area of overlap, the principles that are recognised by the two exceptions may be insufficient to produce a result. It is ultimately a matter for the trial judge, in the light of the circumstances of a particular case, to decide which costs order better achieves justice. In that regard, the Court may take into account facts about the knowledge available to the parties, and the reasonableness of their conduct in conducting the litigation. [7]
The Testatrix was partially blind, chose not to use a solicitor when changing the effect of her will in a way that she was warned would "cause problems" and chose to ask a person to help prepare the Impugned Codicil whom she knew to be the partner of one of the beneficiaries. Thus, in those circumstances, Maureen contends, the Testatrix was relevantly the cause of the litigation, in that it was the conscious choice of the Testatrix not to engage a solicitor or a person who was completely independent to assist her in preparing the Impugned Codicil.
Further, Maureen says, Gayle was a "player in the drama", in so far as she played a part in the execution of the Impugned Codicil, did not disclose to Maureen the fact that the Testatrix had died and distributed to herself and Denis most of the cash comprised in the estate of the Testatrix before lodging a notice of intention to distribute and before distributing any interest to Maureen, in circumstances where the First Codicil required her to sell the Testatrix's house and distribute the proceeds within a fixed time. In any event, Maureen contends, even if the action of the Testatrix was not a relevant "cause" of the litigation, the circumstances were such that it was reasonable to require an investigation of the circumstances of the making of the Impugned Codicil. That is to say, the circumstances were such that an investigation was necessary before the Court could properly pronounce in favour of or against the Impugned Codicil and Maureen performed a public service.
In the present case, I accepted that there were suspicious circumstances that reasonably required the Court to investigate the knowledge and approval of the Testatrix of the contents of the Impugned Codicil and required Gayle to establish affirmatively the knowledge and approval of the Testatrix. Maureen was a necessary contradictor in respect of the claim by Gayle to probate of the Impugned Codicil.
If Maureen had been successful in opposing the grant of probate in respect of the Impugned Codicil, she would have obtained no more than one third of the residue. If Maureen's costs were to be paid from the estate of the Testatrix, she would be bearing one third of the costs. Maureen says that Gayle was only protecting her own interests and the interests of Denis in propounding the Impugned Codicil since they were the ones who benefited from it. Therefore, Maureen says, it would not be appropriate for Gayle and Denis to have their costs paid from the estate, such that Maureen would bear one third, but Maureen receive no part of her costs.
Gayle and Denis assert that the Testatrix was not "the cause" of the litigation notwithstanding the finding of suspicious circumstances. They contend that this case falls within the second category referred to above such that, if the Court is satisfied that the overall circumstances warranted some investigation by Maureen, she should bear her own costs of the proceedings rather than have them paid out of the estate and rather than being required to bear Maureen's costs.
They also point to the allegation made by Maureen that the Impugned Codicil was brought about by undue influence. Ordinarily, where an unsuccessful allegation of undue influence is made in probate proceedings, the party making the allegation will be required to pay the costs of the whole of the proceedings, even if there were reasons warranting the contemporaneous investigation of other issues, such as due execution, knowledge and approval and testamentary capacity. [8]
Thus, Gayle and Denis say, Maureen went a step further than she might otherwise have done by making the serious allegation of undue influence. The onus was on Maureen to establish undue influence and, as I said in the Principal Reasons, none of the matters relied upon by Maureen as constituting undue influence was pleaded as such. Alleged threats by Gayle to leave the family home, the alleged involvement of Gayle in procuring the signature of the Testatrix and discussions concerning what would be left to Gayle from the estate did not amount to coercion. I concluded that none of those matters was referrable to the Impugned Codicil and that there was no evidence to suggest that Gayle required and insisted that the Testatrix leave her more cash. Further, no explanation was offered by Maureen as to why Gayle (and Martin) could exert influence on the Testatrix to exclude Maureen from some, rather than all, of the estate of the Testatrix. [9]
Maureen contends that the making of allegations of undue influence should weigh heavily in support of an order that Maureen should bear her own costs. Gayle and Denis also point out that Maureen had no knowledge regarding the making of the Impugned Codicil since, at the relevant time, she was not living in the family home and was not privy to any conversations. Gayle and Denis assert that, once Maureen received the affidavits filed on behalf of Gayle and Denis, including the affidavit of Roslyn, who was an independent witness, Maureen could no longer justify continuing the opposition to the grant of probate in respect of the Impugned Codicil. She had no evidence to call to challenge the evidence of the independent witnesses and any inquiries and investigations that she thought reasonable to make were at an end.
Maureen called several witnesses whose evidence was entirely irrelevant or was at best tangential to or a distraction from the true issues in the proceedings. I referred to their evidence where necessary but considerable time was taken up in the hearing by evidence as to matters that were at best marginal and, at worst, irrelevant. [10] Gayle and Denis contend that the estate should not be burdened with the costs of excessive witnesses called by Maureen.
The costs order sought by Maureen would fall on the residue of the estate with the effect that Gayle and Denis, who have been successful, would be liable for payment of two thirds of Maureen's costs, which Gayle and Denis characterise as not being a "just outcome". Gayle and Denis contend that, as a fall back, the appropriate order would be that Maureen's costs be paid from the estate on the ordinary basis and that the defendants' costs be paid on the indemnity basis. That is to say, there is no justification for an unsuccessful party having costs paid on the indemnity basis.
I was satisfied that Maureen had demonstrated circumstances such that Gayle must establish positively that the Testatrix knew and approved the contents of the Impugned Codicil. However, there was no basis for the allegation of undue influence, in respect of which Maureen was unsuccessful. Further, Maureen had no basis for challenging the sworn evidence of the independent witnesses in relation to the execution of the Impugned Codicil, once their affidavits had been served. The conduct of Gayle outlined above following the death of the Testatrix itself gave rise to a basis for possible suspicion but that basis was removed once the affidavits of the independent witnesses had been served.
In the circumstances, I consider that the appropriate order is that Maureen's costs on the ordinary basis up to and including the consideration of the affidavits filed on behalf of Gayle and Denis be paid from the estate of the Testatrix and that costs of the proceedings of Gayle and Denis be paid out of the estate of the Testatrix on the indemnity basis. There should be no other order as to costs.
[3]
Endnotes
See Micallef v Linney - Estate of Hope Marie Linney [2020] NSWSC 898 ("Principal Reasons").
See, for example, Boyce v Bunce [2015] NSWSC 1924 at [59]-[60].
See Perpetual Trustee v Baker [1999] NSWCA 244 at [13]-[14] (Giles JA and Brownie AJA).
See Shorten v Shorten (No 2) [2003] NSWCA 60 at [19] (Mason P, Meagher and Sheller JJA agreeing).
Perpetual Trustee v Baker [1999] NSWCA 244 at [13]-[14] (Giles JA and Brownie AJA); Shorten v Shorten (No 2) [2003] NSWCA 60 at [18] (Mason P, Meagher and Sheller JJA agreeing).
Middlebrook v Middlebrook (1962) 36 ALJR 216 at 217 (Dixon CJ, McTiernan J agreeing); Shorten v Shorten (No 2) [2003] NSWCA 60 at [15]-[16] (Mason P, Meagher and Sheller JJA agreeing); Re Estate of Hodges; Shorter v Hodges (1988) 14 NSWLR 698 at 709.
Perpetual Trustee v Baker [1999] NSWCA 244 at [14] (Giles JA and Brownie AJA) citing In the Estate of Moyle: Moyle v Moyle (Supreme Court (NSW), Santow J, 18 June 1988, unrep).
See Re Estate Late Hazel Ruby Grounds; Page v Sedawie [2005] NSWSC 1311 at [30]-[32].
See Reginald Alfred Becker v Public Trustee of New South Wales [2006] NSWSC 1146 at [13]-[14].
See Principal Reasons at [109] and [110].
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Decision last updated: 22 October 2020