Plaintiff v Defendant

2 At the time of her death on 4 July 2018, the deceased was widowed and survived by her seven children, including the plaintiff and the defendant.

3 The deceased had also executed a will dated 23 June 2010 (the 2010 will). Both the 2016 will and the 2010 will divide the residue of the deceased's estate equally between her seven children. The two wills mirror each other except in the appointment of executors. The defendant is named as an executor in the 2010 will along with the plaintiff and Monica. As I have noted, the defendant is not an executor under the 2016 will.

4 Prior to the making of the 2016 will, on 27 April 2015, the Victorian Civil and Administrative Tribunal found that the deceased lacked the capacity to make an enduring power of attorney. In the context of that proceeding, Dr Julio Sison assessed the deceased on 11 April 2015 and provided a medical report dated 13 April 2015 in which he stated that the deceased was 'unable to make reasonable decisions. Unable to give inform (sic) consent due to decreased judgment, poor reasoning and limited understanding' and 'unable to give inform (sic) consent and sign legal documents due to her medical condition dementia'. The plaintiff did not refer to this medical report or this proceeding in his affidavit filed in support of his application for probate in respect of the 2016 will.

5 The 2016 will was prepared by a legal practitioner, Mr Timothy Anderson. Mr Anderson was also a witness to the 2016 will. In his affidavit filed in this proceeding, he stated that 'I read out the Will to the [deceased] and I asked her whether she understood the Will and wished to sign the Will. She confirmed that she did understand the Will and wished to sign it'.

6 On 13 September 2018, the defendant lodged a caveat over the plaintiff's application for a grant of probate in respect of the 2016 will on the grounds that, at the time of execution of the will, the deceased lacked testamentary capacity and was acting under undue influence.

7 On 3 July 2019, the parties informed the Court that they had reached a settlement in relation to the substantive proceeding. They have agreed that the plaintiff's application for probate of the 2016 will should be dismissed. They have also agreed that the plaintiff should bear his own costs of and incidental to the application without indemnification from the estate.

8 The outstanding matter for determination, with which these reasons for judgment are concerned, is the matter of the defendant's costs. The defendant seeks that her costs incidental to the application be paid by the plaintiff personally on an indemnity basis. The plaintiff contends that the defendant should bear her own costs.

9 Submissions as to costs were received from the defendant on 31 July 2019 and from the plaintiff on 2 August 2019. The parties provided oral submissions to the Court on 2 August 2019.

10 The defendant's primary contention is that the plaintiff's application for probate of the 2016 will should never have been brought. She submits that the plaintiff should bear the defendant's costs because:

(a) the plaintiff conceded, and the usual rule is that costs follow the event;

(b) the plaintiff knew that the deceased lacked testamentary capacity, being a respondent in the VCAT proceeding; and

(c) the plaintiff failed to disclose the deceased's lack of capacity in his affidavit of executor sworn 3 August 2018.

11 In response, the plaintiff submitted that the discontinuance of his application should not be seen as a concession that the deceased lacked testamentary capacity, but rather as the avoidance of unnecessary litigation, particularly given that the 2010 will largely mirrors the 2016 will. He further submitted that the medical evidence before VCAT in 2015 was untested and does not establish a lack of capacity. He referred to Ashley J's statement in Norris v Tuppen that 'it is the law, that an administration order does not itself prevent a represented person from making a will; and...does not conclude the question whether such a person has testamentary capacity at a particular time.'[1] His Honour went on to say that:[2]

Expert (medical) evidence may be important in determining competency. But it does not decide the issue, any more than does the mere fact of the age of the testatrix when the will was made, or the opinions of the attesting witnesses that the testatrix was competent.

The presence of dementia does not necessarily tell against a testatrix having competency. Dementia may manifest itself in imperfect recollection, yet leave intact the awareness and ability to which I have referred.

12 In general, except where an executor cannot be satisfied that a will should be proved or where there are vitiating factors such as incapacity, an executor is justified in propounding a will that they believe is the last valid will of the testator and to take all proper steps to prove its validity.

13 As to the question of testamentary capacity, consistent with the observations of Ashley J in Norris v Tuppen referred to above, the mere fact that the deceased was subject to an administration order prior to her death does not establish that she lacked testamentary capacity at the time of the execution of the 2016 will.

14 Further, it is of significance that the 2016 will was witnessed by an experienced legal practitioner who has deposed that, prior to the deceased signing it, he was satisfied that she fully understood what she was signing and had the capacity to do so.

15 The above matters lead me to reject the defendant's central contention that the plaintiff's application should never have been brought.

16 If, as I have found, a plaintiff executor has acted reasonably in propounding a document and there is nothing on its face to indicate that it did not reflect the testamentary wishes of the deceased, the differences between probate proceedings and ordinary claims between parties may justify ousting the prima facie rule that costs follow the event.[3] In determining the question of costs where a proceeding is unresolved without a finding on the merits, the Court may consider whether a plaintiff acted reasonably in commencing the proceeding and whether a defendant acted reasonably in their response to the proceeding.[4] In the circumstances of this matter, without a finding of the merits of the plaintiff's application, for the reasons I have indicated, the plaintiff acted reasonably in seeking to propound the 2016 will.

17 Further, the plaintiff's agreement for the proceeding to be dismissed prior to a hearing on the merits of his application has saved the defendant and the Court further expense and inconvenience.

18 For these reasons, in the exercise of the Court's discretion on costs, I consider that it would be inappropriate to order that the plaintiff pay the defendant's costs on an indemnity basis. The preferable course is that both parties bear their own costs of and incidental to the proceeding. The Court will so order.

[1] [1999] VSC 228 [66].

[3] Chang v Tjiong [2011] NSWSC 1614; Cody v Cody (No 3) [2016] VSC 499.

[4] Re Bovill; Bovill v Bovill [2017] VSC 697 [38].