Plaintiff v Defendant

[2023] VSC 473

WILLS AND ESTATES - Costs - History of proceeding - Plaintiff ultimately made application by summons seeking an order to rectify clause 4 of the 2007 will - Failures of solicitor to implement the testator's instructions - Plaintiff and defendant each claim order for standard costs of the proceeding against non-party solicitor - Plaintiff and defendant also claim balance of costs to indemnity from the estate - Applicable principles - Whether proceedings for benefit of estate - 'Fault' of solicitor and/or testator - Defendant's 'self-interest' and conduct - In re Buckton [1907] UKLawRpCh 98; [1907] 2 Ch 406, Re Schoenmakers (No 2) [2013] VSC 658, Kerr v Kerr (No 2) [2016] SASC 24, Sons of Gwalia Ltd (subject to deed of company arrangement) v Margaretic [2006] FCAFC 92; (2016) 232 ALR 119 and Vanta Pty Ltd v Mantovani [2023] VSCA 74 considered - Orders made.

1 On 20 April 2023, I delivered primary reasons for decision in respect of the substantive issues in dispute[1] and otherwise adjourned the proceeding to allow consideration of the form of final orders together with any questions of costs.

2 From the primary reasons, it will be evident that -

(a) there were two clauses of the 2007 will in respect of which the plaintiff sought rectification, namely cls 4(a) and 4(b);

(b) in respect of cl 4(a) of the 2007 will, it was common ground that it should be rectified so as to take the form of cl 4(a) of the 2006 will;

(c) in respect of cl 4(a) of the 2006 will, a significant issue of construction arose, and the plaintiff ultimately succeeded on that issue;[2]

(d) notwithstanding the above, Mr Donato Smarrelli, solicitor, was responsible for the drafting of the 2007 will (as well as the 2006 will);

(e) in that regard, on the evidence -

(i) clause 4(b) of, in effect, both wills, was ultimately found not to have given effect to the deceased's instructions; and

(ii) clause 4(a) of the 2006 will was also found not to have given effect to the deceased's instructions if, contrary to what came to be accepted, the construction propounded by the defendant was correct;

(i) it was necessary that cl 4(b) of the 2007 will be rectified (by, in effect, ordering that it be deleted); and

(ii) strictly speaking, it was unnecessary to order that cl 4(a) of the 2007 will be rectified beyond altering it to take the form of cl 4(a) of the 2006 will.

3 The matter returned for further hearing on 27 April 2023. Substantive orders were made, including an order rectifying cls 4(a) and 4(b) of the 2007 will. It will be evident that cl 4(a) was rectified for the avoidance of doubt.

4 As to costs, I was informed that the plaintiff and defendant each proposed to seek an order against Mr Smarrelli (or his firm). The solicitor for Mr Smarrelli (or his firm) appeared. It was consensual that it would not be necessary to join Mr Smarrelli, or his firm, to the proceeding in order to hear and determine the arguments as to costs.

5 By consent, a timetable was later ordered for the filing and service of any necessary affidavit material together with outlines of written submissions.

6 In that context, the defendant sought orders that -

(a) Mr Smarrelli or his firm, Lawcorp Lawyers ('Lawcorp'), pay the plaintiff and defendant's costs of the proceeding on a standard basis; and

(b) the plaintiff and defendant each be indemnified out of the estate of the deceased ('Estate') for such of their costs assessed on an indemnity basis as are not covered by the above order.

7 In written submissions, the defendant contended that -

(a) rectification of the 2007 will had always been required as a consequence of Mr Smarrelli's lack of care which, it was submitted, was 'the cause of the litigation';

(b) the orders sought were supported by 'settled principles and guidelines';[3] and

(c) in that context -

[11] [The defendant] had an interest in the outcome of the rectification application, and it was proper that he be heard, to test the evidence before the court and make submissions of the proper construction of the will. His participation allowed the issue to be properly ventilated and determined.

[12] This is not a case where a contradictor was unnecessary. There was a proper basis for [the defendant] to test Mr Smarrelli's evidence and make the submissions that he made at trial. No other witness was required by [the defendant] to attend for cross-examination and the application was conducted efficiently, focussed only on questions of construction and rectification which arose in the administration of the estate. [The defendant's] participation is taken to have benefited the estate regardless of the outcome of the application. After Mr Smarrelli's payment on the standard basis, the balance of [the defendant's] costs should be paid out of the estate on an indemnity basis.[4]

8 In oral argument, counsel for the defendant also addressed the history of the proceeding.

9 In that regard, it is apparent that the proceeding commenced as an application for the grant of probate in respect of which the (now) defendant lodged a caveat. At that time, he was a caveator and not a defendant to the proceeding.

10 Summonses issued by both the plaintiff and the (then) caveator came to be resolved upon the proffering by the plaintiff of an undertaking to seek judicial advice concerning 'the proper construction of cl 4 of the last will'.

11 In that regard, under 'other matters', the orders of the Court record, among other things, that -

The plaintiff and the caveator agree that the reasonable costs of the caveator as defendant in the advice application shall be paid from the estate of the deceased and in the event of dispute regarding the reasonableness of the caveator's conduct or costs in the advice application, the parties shall join in seeking to file written submissions on the question of the caveator's costs.[5]

12 At that time, there was no suggestion that an application could or would be made to rectify any part of cl 4 of the 2007 will. That prospect emerged later when the plaintiff's solicitors became aware of the potential evidence of Mr Smarrelli.

13 In that context, on 7 September 2022, the plaintiff filed and served a summons seeking formally to join the (then) caveator as a defendant as well as orders for the rectification of cls 4(a) and 4(b) of the 2007 will. The following day, the plaintiff filed and served a summons by which she sought to vary the undertaking earlier given.[6]

14 That same day, the matter was brought on at short notice before McMillan J. Counsel for the plaintiff explained that the time limit in respect of the plaintiff's undertaking was due to expire.[7]

15 The broader position was also explained. Her Honour noted that it was a 'changed landscape' and also considered that it would be difficult for the Court to 'deal with the rectification and the construction [issues] ... at the same time'.[8] That said, her Honour had earlier made it plain that she had been afforded insufficient time to consider 'all of the ins and outs'.[9]

16 In that context, her Honour asked whether the application was 'capable of being done on the papers' and counsel for the (then) caveator replied that, although he had only just received the affidavit of Mr Smarrelli, 'cross-examination is likely to be necessary'. Her Honour was not taken to the affidavit in any detail.[10]

17 Thereafter, both counsel estimated that a day would be required and her Honour confirmed that, as a beneficiary, the (then) caveator would need to be included in the proceeding as a defendant. In that regard, her Honour distinguished between the roles of contradictor and defendant. The parties were then sent away to prepare orders giving effect to what had transpired in the course of the hastily convened hearing.[11]

18 In consequence of the above, on 26 September 2022, McMillan J came formally to order that, among other things, the (then) caveator be added as a defendant to the proceeding. The orders also record the variation in the plaintiff's undertaking. The relevant substance of that variation is to the effect that an advice application would be made after the determination of the rectification application 'if there [was] disagreement' between the plaintiff and defendant 'about the proper construction of clause 4 of the [2007] Will'.[12]

19 In that overall context, in an economical address directed to the present issues, counsel for the defendant submitted that -

... Lawcorp falls within the ambit of the ordinary principle that the defaulting solicitor is responsible for the parties' costs of the proceeding, because it's plain that without Lawcorp's incompetence, there would have been no litigation. [The defendant's] role in controverting the application was warranted, was reasonably and efficiently carried out, and is deserving [of] compensation from Lawcorp on the standard basis with the balance being paid from the estate on an indemnity basis so that the parties are put on the same footing.[13]

20 For her part, the plaintiff also sought orders for costs as against Mr Smarrelli and/or Lawcorp and the Estate. In that connection, the plaintiff referred to part of the following statement of principle by Gray J in Kerr v Kerr (No 2)[14] ('Kerr (No 2)') -

The usual practice in this State [South Australia] in a case involving rectification of a will, is that the costs of the parties are paid out of the estate unless the solicitor is at fault, in which case the costs are paid by the solicitor. This practice follows the long established practice of courts of probate that where the litigation has been brought about through the conduct of the testator or testatrix costs should be paid out of the estate.[15]

21 That said, the plaintiff took issue with the defendant's claim for further costs from the Estate. Among other things -

(a) the plaintiff seemed to suggest that the 'usual practice' might permit only standard costs to be recovered from the Estate;

(b) the plaintiff also suggested that a rectification application (particularly the present application) might not 'fit' within the classes of cases identified in the relevant authorities; and

(c) in that context, the plaintiff submitted that -

Although the plaintiff's application is made in her capacity as executor of the estate and is broadly a question arising in the administration of the estate, it is submitted that a rectification application, particularly when made primarily on the basis of clerical error, is fundamentally different to an application for construction of the will.[16]

22 From that point, the plaintiff focussed upon the 'self-interest' of the defendant and the fact that he had been 'wholly unsuccessful' in his arguments against rectification. In that regard, the plaintiff submitted -

... all of the findings ... were established by a combination of the sworn evidence of Mr Smarrelli and the submissions of the plaintiff, not by intervention of the defendant. These matters did not require the presence of a contradictor. It is submitted that the defendant's presence at trial contributed little or nothing to the necessary analysis.[17]

23 In oral argument, counsel for the plaintiff sought also to emphasise aspects of the hearing before McMillan J on 8 September 2022 and ultimately submitted that -

... the position of [the defendant] in this litigation was not one of a contradictor as that term is usually understood in this jurisdiction, but it was one of a party who was pushing his own barrow. The litigation became adversarial, he lost, and costs should follow the event.

So if he gets any costs, they should be from the solicitor. They should not be from the estate. Because on no view did the deceased or the estate cause this litigation. In fact, one thing is very plain, the plaintiff properly brought the summons for rectification at the time she did. She was wholly successful and it's for that reason that my learned friends have correctly, with respect, acknowledged that the plaintiff should receive her costs on an indemnity basis to the extent that those costs aren't paid by Mr Smarrelli.[18]

24 For its part, Lawcorp submitted that it was appropriate that -

(a) Lawcorp pay the plaintiff's costs of making the application for rectification (limited to the summons and initial affidavit material filed in support) on a standard basis;

(b) Lawcorp and the defendant otherwise each pay a 50% share of the plaintiff's costs on a standard basis;

(c) the remainder of the plaintiff's costs of and incidental to the application - to indemnity - be paid out of the Estate; and

(d) the defendant bear his own costs of and incidental to the application.

25 In that regard, Lawcorp submitted that the defendant had been 'wholly unsuccessful' and that 'the length and complexity of the contested hearing' had been 'caused by the position taken by the defendant'.[19]

26 Lawcorp also sought to emphasise the defendant's 'self-interest' and submitted that -

(a) his participation in the proceeding had been unnecessary; and

(b) the position adopted by him in the proceeding had been unreasonable.

27 The essential substance of the submission was that -

The defendant's position in respect of the application was misconceived, of little assistance to the Court and motivated by his financial self-interest. As was the case in the decision of In the estate of Molnar (No 2), there is no justification to award a defendant that unsuccessfully opposed the rectification application the costs of his failure on that application.[20]

28 Lawcorp otherwise drew attention to aspects of the authorities - which it sought to distinguish from the circumstances of the present case - and submitted that there was no 'uniform principle' to the effect that when the rectification of a will is necessitated by an error of the drafting solicitor, the costs of the rectification application ought be borne by the solicitor. That said, Lawcorp accepted that 'in light of the errors it made in drafting the will, it is reasonable that it [Lawcorp] pays some of the plaintiff's costs in respect of the application'.[21]

29 In the context described, Lawcorp contended that 'a large portion' of the costs of the application had been caused by the involvement of the defendant and, so, should be borne by the defendant (including all of his own costs).

30 In oral address, counsel for Lawcorp acknowledged that Mr Smarrelli had been 'the cause of the need for the will to be rectified',[22] but emphasised, among other things, that the defendant had 'lost' and it was 'not fair and reasonable' that Mr Smarrelli pay the costs of the 'losing party'.[23] In particular, it was submitted that -

... Mr Smarrelli's error led to the rectification of the will being necessary, but Mr Smarrelli's error did not lead to a situation where it was necessary for the defendant to join the fray and unsuccessfully oppose the application.[24]

31 For essentially the same reasons, counsel also submitted that it was not fair that Lawcorp pay all of the plaintiff's costs.[25]

32 Notwithstanding the various submissions made by the plaintiff and Lawcorp concerning the ambit of the applicable principles, neither seemed ultimately to be submitting other than that it was appropriate that the plaintiff, as executor, should have at least part of her costs against Lawcorp on a standard basis as well as the balance of her costs (to indemnity) from the Estate.

(a) whether an order should be made against Lawcorp for the whole of the plaintiff's costs of the application on a standard basis; and

(b) whether the defendant ought bear a part of those costs as well as be precluded from claiming his own costs against Lawcorp and/or the Estate.

34 In that regard, it will be evident that the contentions of the parties and non-party were directed partly to the ambit of the relevant principles and partly to the involvement and conduct of the defendant.

35 As to the relevant principles, the submissions directed attention to the seminal statement of classes of relevant case by Kekewich J in In re Buckton[26] as well as a more recent survey and statement of relevant principles by Finkelstein J in Sons of Gwalia Ltd (subject to deed of company arrangement) v Margaretic ('Sons of Gwalia').[27] It is evident that in neither instance were the principles stated in a form in which it was intended that they should be treated as if they were the provisions of a statute; and nor have they subsequently been treated in that way.[28]

36 That said, it may be noted that the classes of case stated in In re Buckton are not specifically stated to include applications for the rectification of a will. However, the first and second classes of case concern difficulties in the construction or administration of a trust and, in each instance, an application would be considered to be 'necessary for the administration of the trust, and the costs of all parties are necessarily incurred for the benefit of the estate as a whole'.[29] In Sons of Gwalia, Finkelstein J identified such classes of case as a 'trust dispute'.[30]

37 In that connection, of course, I have earlier noted that prior to the plaintiff filing her summons seeking rectification of the 2007 will, she had identified issues of construction in respect of cl 4 in respect of which it would be necessary for judicial advice to be sought and the (then) caveator joined as defendant. That application would plainly have been a 'trust dispute' and, indeed, I have noted that it was broadly envisaged that 'the reasonable costs of the caveator as defendant in the advice application ... [would be] ... paid from the estate of the deceased'.[31]

38 Nonetheless, as I have also noted, the making of such an application was overtaken by events.

39 Further, as matters later transpired, the significant issues of construction originally envisaged in connection with the proposed application for judicial advice came to be considered and determined in the course of the present application for rectification.

40 It follows that, in a very real sense, the application for rectification was related to a 'trust dispute' and the latter came to occupy a very significant part of the argument in respect of it.

41 In any event, I have earlier referred to the statement of principle by Gray J in Kerr (No 2). That case involved an application for the rectification of a will, and his Honour ordered that the costs of all parties and an interested party, assessed on the basis of solicitor and client, be paid out of the estate. In that connection, it will be evident that the principle stated by his Honour would embrace -

(a) a case involving rectification of a will;

(b) the costs of 'the parties' being paid out of the estate;

(c) unless the drafting solicitor is at fault.

42 Subsequently, In the estate of Molnar (No 2)[32] ('Molnar (No 2)') concerned a claim for rectification of a will in which, among other things, the drafting solicitor took issue with the authorities relied upon by Gray J in Kerr (No 2). In that instance, Stanley J surveyed a range of relevant authorities - including two in this Court[33] - and considered there to be authority supporting the principle.[34] His Honour also referred to and relied upon the principle later in Craker v Craker & Ors (No 3).[35]

43 In the circumstances, I accept that the principle to which I have referred is appropriately stated and that it is sufficient to cover both the nature of the present application and the orders for costs sought by the plaintiff and defendant against Lawcorp and the Estate respectively.

44 In that connection, as I have noted, in Kerr (No 2), Gray J ordered that the costs of all parties and an interested party be assessed on the basis of solicitor and client.

45 Such an approach is broadly consistent with authority in this Court in respect of 'trust disputes'. In that regard, in Mantovani v Vanta Pty Ltd & Ors (No 3), McMillan J referred to the first two categories of case identified in In re Buckton and stated -

The first is an action brought by trustees relating to the construction of a trust instrument or some other question arising in the course of the administration of a trust, in which case the costs of all parties are treated as necessarily incurred for the benefit of the estate and are ordered to be paid out of the fund on an indemnity basis. The second is where a dispute involves an application which is made by a party other than a trustee, but raises the same issues as the first category and would have justified an application by the trustee. In this instance, the same rule applies in relation to the trustee's costs, because the application is considered to be for the benefit of the estate.[36]

46 An appeal was later allowed, but the Court of Appeal did not doubt her Honour's statement of the relevant principles and, indeed, came to order that various parties have their costs paid out of the trust fund, including the principally unsuccessful party in the application for leave to appeal ('John', who was a beneficiary of the trust). In that regard, the Court of Appeal stated -

... Whilst John's proceeding was adversarial, it was still intimately bound up with questions about the proper administration of the Trust and the refusal of Vanta as trustee to cooperate or to seek the advice or direction of the Court. His commencement of the proceeding drew the attention of the Court to the conduct of the Trust and ultimately resulted in the applicants agreeing to seek directions from the Court as to the future administration of the Trust. In those circumstances, we consider that John's costs of both the trial, the application for leave to appeal and the appeal should be paid out of the Trust fund. The rationale is simple: without John's intervention, important questions concerning the proper administration of the Trust would not have received judicial consideration. Further, having secured a judgment in his favour, it was not unreasonable for him to defend the appeal, notwithstanding the ultimate result.[37]

47 Each of the costs orders made by the Court of Appeal was on an indemnity basis, including the following order made in respect of 'John' -

The plaintiff be indemnified for his costs of the proceeding, including any reserved costs, from the fund of the Mantovani Family Trust.

48 In addition to the above, Re Schoenmakers (No 2) concerned an application for rectification, in which the plaintiff was the executor and trustee of the will. The plaintiff had, however, also failed to draft a will giving effect to the testamentary wishes of the deceased, which McMillan J found to have been a 'substantial cause of the litigation'.[38] Her Honour consequently denied the plaintiff any indemnity out of the estate.

49 That said, her Honour referred without any evident disapproval to the decision of McMurdo J in Hinds v Collins, in which a beneficiary who had been unsuccessful in opposing an application for rectification had been allowed her costs from the estate on an indemnity basis.[39]

50 In light of the above, I would conclude that in an application for rectification the Court may, in appropriate circumstances, order that parties have their costs out of the estate on an indemnity basis.

51 The remaining question, then, is what orders ought presently be made. In that regard, the central issue identified in argument was the involvement and conduct of the defendant in the proceeding, although it is also necessary to consider the significance of the relevant conduct of the solicitor.

52 As to the latter, the deceased spoke English as a second language and must have relied heavily upon the solicitor in respect of the terms of the 2007 will and 2006 will and whether they correctly reflected his instructions.

53 It follows that in the course of the present argument, unsurprisingly, counsel for the plaintiff submitted that 'on no view of the world did the deceased cause this issue'[40] and, for her part, counsel for Lawcorp acknowledged that 'Mr Smarrelli of Lawcorp Lawyers was the cause of the need for the will to be rectified'.[41]

54 In the circumstances, while it might perhaps be able to be said that the deceased contributed causally to the form of the 2007 will 'by the way in which ... [he] ... made his testamentary intentions known',[42] realistically it was very significantly the fault of the solicitor. Further, the errors of the solicitor ultimately made it necessary for the plaintiff, as executor, to make an application to rectify the 2007 will, and none of the costs incurred in that application might be said to have been incurred but for the solicitor's errors.

55 For these reasons, it might have been open to argue that the costs of the application for rectification ought be borne solely by the solicitor.[43] However, as I have noted, no such argument was presently advanced.

(a) the cases in which costs are sought from the solicitor unsurprisingly tend to focus upon the potency of the solicitor's error;

(b) nonetheless, to a greater or lesser extent, the argument that the litigation was necessary, in the interests of, and for the benefit of the estate can remain in parallel.

57 That is very much the position in the present case. While the application for rectification might be said to have been brought about as a consequence of the errors of the solicitor, no one was saying that the solicitor should pay the costs on an indemnity basis and, in a broader sense, it remains the position that a significant part of the application involved a 'trust dispute' ultimately determined for the benefit of the Estate.

58 Indeed, in circumstances in which the application for rectification was preceded by an identified 'trust dispute', and that dispute ultimately came to be bound up in the determination of the rectification application, there is much to be said for the proposition that the hearing and determination of the application was for the overall benefit of the Estate.

59 It follows, in my view, that in the circumstances of the present application, and subject to considering the role played by the defendant, it would be appropriate for both the plaintiff and defendant to obtain their costs of the application from Lawcorp, on and to the limit of the standard basis, and, beyond that, their costs of the application from the Estate, to the limit of the indemnity basis.

60 That brings me to the role played by the defendant. As I have noted, the plaintiff relied upon the defendant's involvement in, and conduct of, the proceeding against any proposition that the defendant should be able to claim an order against the Estate.

61 For that matter, Lawcorp relied upon essentially the same contentions in support of submissions that -

(a) Lawcorp should pay only the plaintiff's costs of making the application for rectification on a standard basis (and that such costs should be limited to the summons and initial affidavit material filed in support of the application);

(b) Lawcorp and the defendant should otherwise each pay a 50% share of the plaintiff's costs on a standard basis; and

(c) the defendant should bear his own costs of and incidental to the application.

62 In that regard, Lawcorp and the plaintiff each essentially submitted that the defendant had -

(a) played a 'misconceived', unnecessary and self-interested role in the litigation;

(b) extended the length of the litigation and made it unnecessarily complex; and

(c) wholly failed in his arguments.

63 Disentitling features of various kinds are either adverted to or evident in the authorities. For example -

(a) in Stephen Bradley Lauder (as executor of the will of Elaine Kathleen Rankin) v Lauder, where Pritchard J stated -

... the usual order in rectification proceedings ... is that the costs of the parties be paid out of the estate, on the basis that the litigation has been necessary as a result of the conduct, or fault, of the testator. ... [T]here is no question in this case of any conduct on the part of the executor which would disentitle him from recovering his costs of the Application from the Estate.[44]

(b) in Molnar (No 2), where a party with only a commercial interest (and no direct legal interest) in the litigation failed in resisting an application for rectification;[45]

(c) in Re Zaprudsky; Zaprudsky v Koutsoupias, where an executor had 'failed to act reasonably prior to and after the commencement of the proceeding' in a manner that demonstrated 'a want of prudence and diligence' and also failed to have due regard to his fiduciary duties as executor;[46] and

(d) in Mantovani v Vanta Pty Ltd & Ors (No 3), where a defendant had 'unreasonably protracted' the dispute and acted in a manner that was neither reasonable nor proper.[47]

64 On the other hand, in Kerr (No 2), in which different executors had adopted opposing positions in respect of the rectification of a will, Gray J stated -

[8] In my view, the circumstances of the proceeding fully justified the comprehensive and robust examination of the affidavit evidence. That evidence, and oral evidence led in the hearing, indicated that the testator was troubled by family relationships. Ultimately, as my primary reasons reveal, I was satisfied by clear and convincing proof that an error had been made in the second codicil. In reaching my conclusions, I was greatly assisted by the close attention paid to the conflicting evidence by all counsel. When regard is had to all of the evidence, I do not consider that it could be said that the defendant was unreasonable in opposing the application or that it was unreasonable for the interested party, being one of the executors, to join the defendant in that opposition.

[9] The fact that I ultimately preferred some witnesses over others did not obviate the need for a close examination of all of the evidence at trial. No party suggested that the matter could be resolved on the papers. It was entirely appropriate that the matter proceed to trial with the testing of the affidavit evidence.

[10] In the above circumstances, I accept the submission that there should be no departure from the usual order and that the costs should be paid from the estate.[48]

(a) the extent to which conduct might be considered disentitling turns on the nature of the conduct as well as the facts of the case; and

(b) when the party concerned has a direct interest in the will, much is likely to turn upon whether or not the conduct concerned was unreasonable.

66 In the present instance, I have earlier explained the means by which the defendant came to be involved in the application.

67 While it may be acknowledged that a contradictor and defendant are not necessarily the same thing, the present defendant was originally sought to be brought into the proceeding in connection with an issue of construction that was then overtaken by a broader issue of rectification (that, in the circumstances, also required the determination of the issue of construction). I would not regard any aspect of that as having involved any unreasonable conduct on the part of any party, including the defendant.

68 That said, there can be no doubt that in at least one respect the defendant was interested in the result of the application. Indeed, that was plain in the combative atmosphere of the trial. However, it seems to me that, at least in the present case, the self-interest of the defendant cannot be disqualifying in the absence of any additional or unreasonable conduct.

69 In that regard, the form of Mr Smarrelli's main affidavit practically invited careful examination. It was, in my view, entirely appropriate that his evidence came to be tested via cross-examination. Indeed, that process did much to elicit the true complexion and meaning of his evidence.

70 It follows that I cannot accept that it was ever a case that could appropriately have been determined on the papers. Nor, in my view, was it a case in which the stance adopted by the defendant could properly be considered to be unduly or unreasonably hostile.

71 In that regard, while the involvement of the defendant might be said to have ensured that difficult questions and aspects of the case were highlighted for determination, I could not accept that it was unreasonable of the defendant to have done so.

72 Indeed, in doing so, the defendant seems to have co-operated with the plaintiff and together they appeared to ensure that the application was presented efficiently. In that regard, the case was opened and all relevant evidence was heard and tendered within one day and a further day was required for addresses because difficult issues arose.

73 In that connection, as in Kerr (No 2), the close attention given by all counsel to the conflicting aspects of the evidence, as well as the relevant principles, was of considerable assistance.

74 In the circumstance described, it seems to me to be immaterial that the defendant failed in his defence. In my view, his involvement is explicable and the stance adopted by him thereafter was not unreasonable. Indeed, I consider his stance and conduct to have been of considerable assistance and so ultimately to have been of benefit in the proceeding and therefore to the Estate.

75 For those reasons, I cannot accept the contentions of either the plaintiff or Lawcorp founded in the stance and conduct of the defendant.

76 It follows, in my view, that the plaintiff and the defendant should have the order that each of them relevantly seeks. That is, in substance -

(a) Lawcorp should be ordered to pay the plaintiff's costs of the application, assessed on a standard basis;

(b) the plaintiff may recover any further costs of the application from the Estate, to the limit of the indemnity basis;

(c) Lawcorp should be ordered to pay the defendant's costs of the application, assessed on a standard basis;

(d) the defendant may recover any further costs of the application from the Estate, to the limit of the indemnity basis; and

(e) all costs may be assessed by the Costs Court in default of agreement.

[1] Re Estate of P Mirabella (dec'd) [2023] VSC 185.

[2] I should say that until final address the plaintiff also pressed an issue of construction in respect of cl 4(b): cf., Ibid [53].

[3] The defendant cited In the Estate of Molnar (No 2) [2016] SASC 159, [16]-[25], ANZ Trustees Ltd v Hamlet [2012] VSC 207, [19], Marley v Rawlings (No 2) [2014] 4 All ER 619, [10]-[12], In Re Buckton [1907] Ch 406, 414, Sons of Gwalia Ltd v Margaretic [2006] FCAFC 92; (2006) 232 ALR 119 and Vanta Pty Ltd v Mantovani [2023] VSCA 74, [29] ('Vanta').

[4] Defendant's outline of submissions on costs dated 9 June 2023 (citations omitted).

[5] Orders of McMillan J made on 18 July 2022 (emphasis added).

[6] Summonses dated 7 September 2022 and 8 September 2022.

[7] Transcript of hearing on 8 September 2022, 2.

[12] Orders of McMillan J made on 26 September 2022.

[14] Kerr v Kerr (No 2) [2016] SASC 24 ('Kerr (No 2)').

[16] Plaintiff's outline of submissions on costs dated 21 June 2023, [32].

[19] Outline of costs submissions on behalf of the non-party dated 6 July 2023, [14] ('Lawcorp Submissions').

[21] Lawcorp Submissions (n 19) [28].

[26] [1907] UKLawRpCh 98; [1907] 2 Ch 406, 414-415 ('In re Buckton').

[27] [2006] FCAFC 92; (2016) 232 ALR 119, [5]-[10] ('Sons of Gwalia').

[28] See, for example, Vanta (n 3) [30].

[30] Sons of Gwalia (n 27) [5]-[6].

[31] Orders of McMillan J made on 18 July 2022.

[32] In the Estate of Molnar (No 2) [2016] SASC 159 ('Molnar (No 2)').

[33] ANZ Trustees Ltd v Hamlet [2010] VSC 207, [19] and Re Schoenmakers (No 2) [2013] VSC 658, [24] ('Re Schoenmakers (No 2)'). Cf., Vanta (n 3) [29].

[35] [2019] SASC 13 ('Craker (No 3)').

[36] Mantovani v Vanta Pty Ltd & Ors (No 3) [2022] VSC 357, [10] (citations omitted) ('Mantovani'). See also, Re Zaprudsky; Zaprudsky v Koutsoupias [2022] VSC 348, [11] ('Zaprudsky').

[38] Re Schoenmakers (No 2) (n 33) [14].

[39] Hinds v Collins [2005] QSC 362; [2006] 1 Qd R 514, [18].

[42] Cf., Fielder v Burgess [2014] SASC 98, [57].

[43] See, for example, Craker (No 3) (n 35) [22]-[25].

[44] [2018] WASC 91, [43].

[45] Molnar (No 2) (n 32) [28]-[29] and [45].

[47] Mantovani (n 36) [39]. Noting that the decision was reversed on appeal: Vanta (n 3).

[48] Kerr (No 2) (n 14) [8]-[10].