Supreme Court of WA|2000-02-18

O'Brien v Trustees of Western Australia Ltd as Executor of the Estate of Ronald John O'Brien (Dec) & Anor [2000] WASC 33 (18 February 2000)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : O'BRIEN -v- TRUSTEES OF WESTERN AUSTRALIA LTD as Executor of the Estate of RONALD JOHN O'BRIEN (DEC) & ANOR [2000] WASC 33

TRUSTEES OF WESTERN AUSTRALIA LTD as Executor of the Estate of RONALD JOHN O'BRIEN (DEC)

Costs - Dismissal of application under Inheritance (Family and Dependants Provision) Act 1972 (WA) - Costs follow the event

1 MASTER BREDMEYER: This is a reserved decision on costs. The plaintiff applied for a further and better provision from the estate of the late Ronald James O'Brien. That application was dismissed. The application failed on the first stage of a two-stage process in considering s 6 of the Inheritance (Family and Dependants Provision) Act 1972 (WA) ("the Act"), namely that I did not consider that the testator had failed to make adequate provision for the plaintiff.

2 The court's power to award costs is a general one and is found in s 14(6) of the Act:

"The Court may make such order as to costs of any proceeding under this Act as it deems just."

3 I quote from Anthony Dickey, "Family Provision After Death" at 184 - 185:

"It is now well established that in family provision proceedings, an order for costs is at the discretion of the court. In many cases, the court may be disposed to making an order that all parties have their costs paid, usually on a solicitor-client basis, from the deceased's estate. However, whether the court makes an order for costs in favour of a particular party, and the quantum and basis of any order for costs, depends upon the circumstances of the case. Relevant factors that may be taken into account here include the following.

(a) In respect of a claim for costs by an applicant:

* the merits and reasonableness of his or her case (even though he or she may ultimately have been unsuccessful).

(b) In respect of a claim for costs by a beneficiary who is separately represented:

* the reasonableness of his or her being separately represented.

* his or her conduct in the proceedings (including, in appropriate circumstances, whether his or her conduct justified intervention by a beneficiary to defend an entitlement).

Instead of making an order for the payment of costs from the deceased's estate, the court may simply decline to make an order for costs, with the result that each party, or a particular party, must then bear his or her own costs. Alternatively, the court may order that an unsuccessful party pay the other side's costs. However, as proceedings for family provision are essentially proceedings for maintenance, it has been held that a court may properly decide not to make an order for costs against an unsuccessful applicant, even though this may otherwise be justifiable, if such an order will have a detrimental effect upon his or her financial position.

Victorian, South Australian, Western Australian and Tasmanian provisions

The family provision legislation of Victoria, South Australia, Western Australia and Tasmania confirms the wide powers of the court to make an order as to the costs of any family provision proceedings as it deems just. It has been held that the Victorian provisions do not oust the more detailed costs provisions of the Supreme Court Rules." (Footnotes omitted)

4 The plaintiff failed in this case and, as I have said above, she failed on the first stage of the two-stage process required of the court under s 6 of the Act: see Bondelmonte v Blanckensee [1989] WAR 305 at 307. Nevertheless, her claim was not hopeless and was argued competently. I do not think it just in a case like this one to order all costs to be paid out of the estate. I consider it is more just that costs should at least, in some degree, follow the event. If there was no such rule in inheritance actions, then there would be little disincentive against the plaintiff bringing a hopeless application. Moreover, in this case, the net estate was small, about $69,000. I would adopt what Goff LJ said in Re Coventry (Dec) [1979] 3 All ER 815 at 820:

"... I would adopt the proposition, that applications in small estates should be discouraged, because the costs tend to become wholly disproportionate to the end in view, although, of course that does not mean that application cannot be made in a small estate, nor that when made it should not be duly considered on its merits."

5 In this case, in October 1999, which was after the major affidavits were filed and after there had been an interlocutory hearing to strike out certain paragraphs of the defendant's affidavits, the second defendant made an offer to the plaintiff of $7500 inclusive of costs to settle the action. The offer remained open for one week. The offer was not accepted. As it eventuated, it would have been wise for the plaintiff to have accepted that offer.

6 I am not persuaded in this case that the plaintiff's costs should come out of the estate. The plaintiff's case was competently argued but was never strong. It was a small estate of net value about $69,000. The plaintiff needed to persuade the court initially that the provision for her in the will - which provision was nil - was inadequate. That task is harder where the estate is small than where it is large. Secondly, the length of time between the divorce settlement and the date of death was 24 years. The deceased's duty, or moral duty, to provide in his will for his ex-wife to whom he was paying maintenance under a court order, surely diminishes progressively over the years. Twenty-four years is a long time. Thirdly, a significant fact occurred in the 24 years between divorce and death, namely the plaintiff became eligible, and got, the old age pension (currently worth $362.70 per fortnight). That diminished the importance of the $30 per week maintenance being paid to her by the testator and diminished his duty or moral duty to provide for her in his will.

7 I further consider that the plaintiff should pay both the defendant's costs. As stated above, her case was not strong on the first part of s 6. Secondly, she rejected the settlement offer made in October 1999 of $7500. Given that she was only after a modest sum, that settlement offer was not ridiculous. I say she was only after a modest sum because her counsel argued that she should get about $14,000 or $16,000 being the capital equivalent of $30 per week for the rest of her life, based on life expectancy tables. I consider that offer, although not made under O24A, should, in the exercise of my discretion, have a bearing on costs. I consider it just that costs should follow the event.

8 I will order the plaintiff to pay the costs of the action of both defendants, including any reserved costs, to be taxed, if not agreed.

(Family and Dependants Provision) Act 1972

O'Brien v Trustees of Western Australia Ltd as Executor of the Estate of Ronald John O'Brien

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O'Brien v Trustees of Western Australia Ltd as Executor of the Estate of Ronald John O'Brien (Dec) & Anor [2000] WASC 33 (18 February 2000)

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