Procedure - Costs - Departing from the general rule - Conduct of parties.

Testators Family Maintenance Act 1912 (Tas).

Applicant (Gregory Peter Morse): Doolan & Brothers

Applicant (David Neil Morse): Crisp Hudson & Mann as agents for Doolan & Brothers

Judgment Number: [2003] TASSC 145

1 The parties seek differing orders as to costs consequent upon the decision in these matters (Morse v Morse; Morse v Morse [2003] TASSC 103). The respondent seeks an order that the unsuccessful applicants in each cause pay his costs of resisting the application and each applicant seeks orders that the estate bear the costs of their respective claims.

2 It is not necessary to traverse the basis or reasons giving rise to the applications brought pursuant to the Testators Family Maintenance Act 1912 ("the Act"). The claims were made by adult sons against the relatively modest estate of their father. The evidence given on the hearing disclosed a long history of family discord giving rise to a sense of grievance held by each applicant. Central to the grievances was the father's use of the land and his refusal to allow its development. Each applicant had, at some stage, returned to the land, prepared to help their father develop and manage it in an economically productive manner. Each had been rebuffed and discord extended to other members of the family with an aftermath of hostility and bitterness. Each applicant resented the bequest to the remaining adult son, regarding it as unfair and a rejection of their worth as sons. The daughters were not so affected.

"and may make such other order in the matter, including an order as to costs, as the Court or Judge thinks fit."

4 The discretion afforded by statute is wide, but not unfettered (Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201; Fox v Burvill [1955] HCA 50; (1955) 92 CLR 334; Dehnert v Perpetual Trustees [1954] HCA 47; (1954) 91 CLR 177). Relevant matters governing the exercise of discretion include merits and reasonableness of claim (Re Bodman [1972] Qd R 281, conduct in the proceedings (Vasiljev v Public Trustee [1974] 2 NSWLR 497) and the size of the estate (Re Klease [1972] QWN 44). In some circumstances a court might decline to award costs against an unsuccessful applicant if such an order will have a detrimental effect on his or her financial position (Re De Feu [1964] VicRp 54; [1964] VR 420). In many cases an unsuccessful applicant is denied an order for costs to be paid by the estate, but not required to pay the costs incurred by other parties (In re Testators Family Maintenance Acts (1916) 12 Tas LR 11; Dobell v Van Damme [1982] VicRp 41; [1982] VR 425; Re Lago [1984] VicRp 62; [1984] VR 706; Ingamells v WA Trustees Western Australian Supreme Court, unreported 5 March 1993).

5 Here the respondent contends that costs ought follow the event. With justification, he argues that the conduct of the applicants during the course of the proceedings was less than desirable and that a lot of evidence was directed at the history of the family relationships (Button v Lynch [2002] NSWSC 1148). Further, that given the heavy onus which remains with an adult and healthy son who is in employment, it ought to have been obvious to each applicant that the chance of success was minimal and their maintenance of the cause likely to harm the estate. That contention is accepted in part. The value of the estate is in excess of $370,000, but is subject to a life interest or licence of occupancy to portion of the land afforded to the wife of the testator. Division or sale of the property would have adversely affected the remaining years of life of the mother of each party.

6 One matter persuades the Court to depart from or modify an order that costs ought follow the event. Central to this matter was the use of the land. At trial, an issue was whether the land could now be developed to any great degree. It is unlikely that modern legislation, planning requirements and environmental principles would permit development in a manner productive of high economic return. The wishes of the testator have been fulfilled. He had always rejected the applicants' suggestions that it be developed and his bequest to the respondent was more in the nature of a trust that the land be left, as far as possible, in its natural state. It is difficult now to understand a belief, held by many of another generation, that family belonged to the land, not the converse. That the family, and his name, should live on through the land as custodians does not readily accord with the current ethos. Certainly the concept did not attract itself to the applicants who were, in turn, the products of a different generation. They sought to enhance the economic well-being of the family unit, whilst the youngest son was regarded by the father as the most suitable custodian. Those conflicting concepts are neither easy to articulate nor comprehend. The testator was not articulate and one suspects that the discourse between father and sons was both blunt and acrimonious. The older sons perceived the bequest to be inherently unfair and ignored moral entitlement. While the respondent acted properly to contest the claims, each applicant felt entitled to contest the bequest as not representing one made by a just and wise father (Gerlach v Public Trustee 153/1997; McKinnon v McKinnon [2002] TASSC 3). It is unlikely that either understood, at the time of the making of each application, the basis on which their father had bequeathed his land. It is unlikely that either understood that he wished the land to be undivided and left pristine. It is unlikely that either understood that the father had identified the youngest son as best able to give effect to his wish.

7 The making of the applications was not unmeritorious. However, this cause was to be determined by affidavit and cross-examination. Many affidavits were filed, most of which were sworn by members of the family. It is possible to see the respective positions stated and developed through those affidavits and their replies. There came a time when each applicant had an adequate opportunity to assess the basis of the respondent's opposition to the claims and to consider their own chances of success (Bingham v Forrest [1999] NSWSC 540). The rationale for the bequest ought to have been apparent upon the filing of the affidavit of Colin Walter Morse dated 17 May 2000 and the impact of environmental legislation on value and division of the land been considered upon the delivery of the affidavit Dennis Chester dated 16 March 2001. The applicants ought not have their costs from the estate beyond 29 March 2001.

8 Neither applicant is wealthy and the estate is not large. The complication to a costs order is one caused by separate representation. Each applicant retained different solicitors. The matters were consolidated in June 1999, but the order was subsequently revoked in October 2001. The applicants were jointly represented by counsel on the hearing. No conflict of interest arose and it is unlikely that one would have been anticipated at the time the respective applications were made. Reasonableness of separate representation is a relevant consideration in the making of a costs order (Fox v Burvill (supra)). However, each applicant had the right to retain his own solicitor and I am unaware of the basis on which the consolidation order was revoked. This factor will have no import on the determination.

9 The applicants ought have their costs paid from the estate up until 29 March 2001. The respondent ought have his costs paid by the applicant's in each matter as and from that date.

(1) The respondent pay the applicants' costs of the matter until 29 March 2001. Such costs to be taxed.

(2) The applicants pay the respondent's costs of the matter as and from 29 March 2001. Such costs to be taxed.

(1) The respondent pay the applicants' costs of the matter until 29 March 2001. Such costs to be taxed.

(2) The applicants pay the respondent's costs of the matter as and from 29 March 2001. Such costs to be taxed.