Will - Proof in solemn form - Issue concerning costs - Exceptions to rule that costs follow the event in probate cases - Unsuccessful party allowed costs out of the estate

1 HASLUCK J: This is an application by the plaintiff Donald John Roebuck for various orders to be made after the trial of the action. The orders sought by the plaintiff as moved on his behalf by counsel are as follows:

(1) The court hereby pronounces for the force and validity of the last Will and testament dated 7 March 1996 of Pasko Smoje, the deceased in this action, a copy of which Will is referred to in the affidavit of scripts of the plaintiff Donald John Roebuck filed on 27 March 1998;

(2) Probate of the estate of Pasko Smoje be granted to Donald John Roebuck, the executor named therein;

(3) The first defendants do pay the plaintiff's costs of the action herein to be taxed.

2 I digress briefly to observe that I have before me in respect of this application counsel for the plaintiff and counsel for the first defendants. Counsel for the second defendant, the Returned Services League, had appeared previously and indicated that his client would simply abide the ruling of the court. I note from the terms of the proposed orders I have just recited that in any event there is no costs order likely to affect the second defendant if orders in those terms were made.

3 Counsel for the first defendants has indicated that there is no controversy concerning the first two of the proposed orders. Counsel for the defendants does, however, oppose the proposed order that the first defendants do pay the plaintiff's costs of the action herein to be taxed. Thus there is a controversy between the parties concerning the issue of costs and a need to resolve that controversy.

4 In order to resolve the controversy it will be useful to look briefly at the circumstances giving rise to the claim. The judgment of the Court delivered on 20 December 2000 contains a full narrative of the matters giving rise to the claim and contains rulings on the various disputed issues.

5 In summary, the plaintiff in these proceedings, Donald John Roebuck, contended that he was the lawful executor of the last Will of Pasko Smoje late of 222 Great Eastern Highway, Ascot, who died on 4 October 1997. The plaintiff sought orders that the Court pronounce in solemn form for the force and validity of a Will which is said to have been executed by the deceased on 7 March 1996 in the presence of two witnesses; namely, Elaine Turnbull and Linda Pallier.

6 The plaintiff's writ was issued against the first defendants as children of the deceased and as persons entitled to share in the estate of the deceased in the event of an intestacy. The defendant's son, Neven Smoje, had entered a caveat. The second defendant, the Returned Services League, is named as a beneficiary in the 1996 Will and therefore has an interest in the outcome of these proceedings.

7 By their defence and counterclaim, the first defendants admitted that they are all the lawful children of the deceased. They did not admit that the 1996 Will was duly executed and they put the plaintiff to proof of the same. They said further that at the time the Will purported to have been executed, the deceased was not of sound mind, memory and understanding. Particulars provided in support of that plea were that at the time the deceased purported to execute the Will he was 81 years of age and suffered from various ailments, including decreased hearing and impairment of vision.

8 The first defendants went on to allege that the execution of the Will was obtained by the undue influence of the plaintiff and others acting with him; namely, the two individuals who witnessed the Will, Elaine Turnbull and Linda Pallier. The defendants contended that the plaintiff took advantage of the age of the deceased to make the purported Will.

9 That is the background to the dispute between the parties. There is no need for me to traverse the full history of the matter because that history is reflected in the formal judgment. For present purposes, it is sufficient to note in passing that the deceased had made an earlier Will in 1991 in which he had left everything in his estate to the Returned Services League; that is to say, the second defendant in these proceedings.

10 The earlier 1991 Will had been made by the deceased with the assistance of a solicitor who normally acted for the Returned Services League. An officer of the RSL was appointed as the executor of that Will. The effect of the new 1996 Will was to vest the entirety of the estate in the plaintiff, Donald Roebuck, with the exception of a gift of $10,000 in favour of the RSL.

11 It appears also from the narrative set out in the judgment that as at March 1996, when the Will of the deceased was executed, he was then living alone and in seclusion in his domestic residence. The evidence established that he had very little contact with his son or other members of his family and that he had formed a friendship of sorts with Mr Roebuck, the plaintiff in these proceedings.

12 The evidence showed that when the time came for the deceased to execute the March 1996 Will, Mr Roebuck attended to the arrangements in that regard and was responsible for two persons being brought to the premises on the day in question to act as witnesses, the two witnesses in question being those I mentioned earlier, Elaine Turnbull and Linda Pallier. It turns out that both those witnesses had some previous connection with the plaintiff. Indeed, as appears from the matters referred to in the judgment, the second witness, Linda Pallier, was at that time, and still is, in an ongoing financial relationship with the plaintiff.

13 It was against this background that various pieces of evidence bearing upon the capacity of the testator were evaluated, including the evidence of medical practitioners.

14 In the course of the judgment I reviewed various previously decided cases with a view to extracting the relevant legal principles applicable to a case of this kind. It emerged from the review that one has to give attention to circumstances likely to excite some suspicion as to whether the terms of the Will accorded with the intention of the testator. I concluded at par 105 of the judgment:

"In my opinion, the circumstances of the present case did give rise to a suspicion that the terms of the Will did not accord with the intention of the testator with the result that the plaintiff is required to remove the suspicion and affirmatively prove by clear and satisfactory evidence that the contents of the Will were known to and approved by the testator."

15 I went on to say that the matters I referred to in forming that opinion included the fact that the deceased as at March 1996 was elderly and living alone; he was not in regular communication with members of his family circle or other persons who might have given him counsel as to the management of his affairs. I touched on other matters relevant to the presence of those suspicious circumstances.

16 In the course of reviewing the evidence in that part of the judgment, I said further that the plaintiff himself was not an impressive witness. It became apparent in the course of his cross-examination that there were inconsistencies between the version of events he presented at the trial concerning the execution of the 1996 Will and the account he had provided previously in the affidavits lodged in support of his application for probate.

17 I said that the replies he gave to questions put to him were not forthright and he was unable to provide any clear explanation as to why the cremation of the deceased was accomplished with haste and without notification to those likely to have an interest in the matter, such as members of the deceased's family or the RSL; further, the plaintiff was unforthcoming and evasive when asked to describe his own financial circumstances. It emerged by degrees that the plaintiff had undertaken substantial financial commitments on the assumption that the benefits under the will would be vested in him.

18 It also appears from the narrative in the judgment that Elaine Turnbull, one of the witnesses, was not available to give evidence at the trial. This meant that evidence was received from her in the form of a deposition taken many months before the matter proceeded to trial. She was cross-examined about the matters in issue. Nonetheless, the fact remains that for many months prior to trial the indications were that Elaine Turnbull would not be called to give evidence. It might be thought that this too was a matter which required the defendants to insist that the evidence of the plaintiff should be tested fully at a trial of the action.

19 In regard to the matters of concern that I have just referred to, I concluded eventually, at par 123 of the judgment, that there were circumstances arousing suspicion as to whether the 1996 Will represented the free exercise of the deceased's intentions. I said that in the circumstances of the present case, bearing in mind the financial relationship between the witnesses to the disputed Will, a high degree of vigilance was required in resolving the central issue. I added, however, that the rules requiring special vigilance in these circumstances should not be regarded as introducing an inevitable disqualification. The decided cases show that a residual doubt was not enough to defeat the plaintiff's claim unless it was felt by the Court to be substantial enough to preclude a belief that the document contended for by the plaintiff is the Will of the testator who possessed sound mind, memory and understanding at the time of its execution.

20 I concluded finally that when all the relevant factors were balanced up, having regard to the weight of the medical evidence, the deceased had sufficient mental capacity to make the 1996 Will. I said that I was satisfied also that the burden of proof imposed upon the plaintiff of removing suspicions had been discharged notwithstanding some of the residual doubts that I have just touched upon. It was also held that in regard to the question of undue influence, the evidence of the plaintiff in rebuttal was sufficient for the plaintiff to succeed.

21 It is against this somewhat complex background that the application for costs falls to be considered.

22 The stance of the defendants is that their costs should be paid out of the estate, and that is the matter before me.

23 The starting point of that discussion is s 37 of the Supreme Court Act 1935, which provides:

"Subject to the provisions of this Act and to the Rules of Court and to the express provisions of the Local Courts Act 1904, or any other Act, the costs of and incidental to all proceedings in the Supreme Court, including the administration of estates and trusts, shall be in the discretion of the Court or Judge, and the Court or Judge shall have full power to determine by whom or out of what estate, fund, or property, and to what extent such costs are to be paid."

24 The Supreme Court Rules also contain provisions bearing upon the question of costs. I will not traverse the full extent of the various rules bearing upon costs, but a fundamental precept is to be found in O 66 r 1 which provides:

"Subject to the express provisions of any statute and of these Rules the costs of and incidental to all proceedings including the administration of estates and trusts shall be in the discretion of the Court but, without limiting the general discretion conferred on the Court by the Act, and subject to this Order, the Court will generally Order that the successful party to any action or matter recover his costs."

25 I pause to observe that there can be no question in this case that the successful party is indeed the plaintiff. In the end, the plaintiff was able to discharge the burden of proof and satisfy the Court that he was entitled to the relief he sought, notwithstanding the issues raised against him, one of which included the plea of undue influence.

26 It is well-known that in regard to probate matters the decided cases do introduce some further principles to be considered in the context of the statutory provision and the rules I have just mentioned. The principles to be applied when a question of costs falls to be determined in contested probate litigation are conveniently set out in Williams, Mortimer and Sunnucks: "Executors, Administrators and Probate" 17th ed at 437 to 441.

27 Put shortly, the basic rule is that while costs lie in the discretion of the Court, in general, costs follow the event. For that basic rule there are a number of recognised exceptions, of which for present purposes two have been suggested as being relevant to the circumstances of the present case, namely, (1) where the litigation has been caused by the conduct of the testator - in that case the unsuccessful defendant may be relieved of the burden of costs and at times may be awarded his costs out of the estate - and (2) where there are circumstances which afford reasonable grounds for opposing the Will by the unsuccessful defendant. In the latter case, the unsuccessful party, although not usually awarded his costs out of the estate, will usually be relieved of the burden of costs.

28 Those principles are derived from various cases. One of the leading cases in that regard is Twist v Tye [1902] P 92. It was there said at 93 - 94:

"The general rule is, of course, that costs, after a trial of this character, should follow the event unless, according to the principles which are in force in this Court, there should be adequate reason for an order of a different character.

Speaking generally, there are in this Division two classes of cases in which there should be, and generally is, a departure from the ordinary rule: the first is where the litigation has been brought about through the conduct of the testator or testatrix; and the second is where the parties who have failed have reasonably been led into the litigation by a bona fide belief in their case, and have, therefore, felt it desirable to inquire into the testamentary dispositions of the testator or testatrix."

29 Those principles have generally been followed in Australia and in the State of Western Australia. A useful point of reference in that regard is the decision of Wolff CJ in Re Green [1969] WAR 67. In that case the plaintiffs were the executors of the last Will of the deceased which was executed in 1966. The first two defendants were executors of a previous Will; the other defendants and the first and second parties cited were lawful children of the deceased. The third party cited, the Salvation Army, was the residuary beneficiary under the 1966 Will.

30 The plaintiffs sought to prove the 1966 Will in solemn form and this was opposed on the ground that the testator was not of sound mind when he made it. The Defendants counterclaimed to establish the Will of 20 December 1960; that is to say, the earlier Will. The first party supported the grant sought by the plaintiffs. The interest of the second party was merely to see that each Will was properly executed. The defendants failed to establish that the testator was not of sound disposing mind when he made the later Will and it was ordered that the later Will be admitted to probate.

31 The defendants and each of the parties cited contended that their costs should be paid out of the estate. In that case the Court held that the general rule in probate actions is that costs follow the event. The Chief Justice cited Twist v Tye in support of that proposition. The headnote reads as follows:

"There are two types of cases where the general rule may be departed from: (a) where the litigation has been brought about through the conduct of the testator; and (b) where the parties who have failed have been lead reasonably into litigation by a bona fide belief in their case and have, therefore, felt it desirable to inquire into the testamentary disposition of the testator."

32 In Re Green the first party cited obtained an order that her costs should be paid out of the estate. The second party cited was required to pay her own costs. The Chief Justice did not feel justified in ordering the defendants' costs to be paid out of the estate, because they failed to sustain the issue which they raised, but he was prepared to make no order as to costs against the defendants.

33 I pause briefly to observe that in the present case there was some suggestion that the defendants did not have an interest in the outcome of the case directly because the matter was argued at trial on the basis of there being no contention for proof in solemn form of the earlier 1991 Will and in any event under that Will the exclusive beneficiary was the RSL.

34 I have to say in passing that I am not persuaded by the proposition I have just mentioned. If the defendants had succeeded in their stance the way would have been left open for there to have been declared an intestacy and it is possible that the first defendants could then have taken a benefit.

35 In addition to the authorities I have cited, counsel for the plaintiff has drawn my attention to some additional authorities which should also be considered.

36 In Re Cutcliffe's Estate [1959] P 6 the Court approved the notion that a party who fails on a case based on allegations of undue influence or fraud will usually be ordered to bear the costs of the proceedings. Hodson LJ said in the course of his reasons in that case at 21:

"... the probability, at any rate, if they are unsuccessfully made, is that the people who make such charges and fail will be condemned in the costs not only of that charge but of the whole action."

37 That is therefore an authority which counsel for the plaintiff in the present case places some emphasis upon because it is indeed true in this case that an issue of undue influence was raised and that the defendants failed in respect of that issue.

38 Counsel for the plaintiff also refers to Swain v Noakes, unreported; SCt of WA; Library 920173; 25 February 1992 in which Nicholson J held:

"However, there are two types of cases where the general rule may be departed from: (a) where the litigation has been brought about through the conduct of the testator and (b) where the parties who have failed have been led reasonably into litigation by a bona fide belief in their case, and have therefore felt it desirable to inquire into the testamentary dispositions of the testator."

39 Reference was also made to Jamal v Secretary of the Department of Health (1988) 14 NSWLR 252. In that case Mahoney JA stated the existence of two other exceptions to the general principle that costs follow the event: First, if the successful party fails on an issue of significance; second, where conduct of a successful party may be so discreditable that it justifies costs not being awarded to that party.

40 I must also take account of a decision upon which counsel for the defendants placed some reliance; that is to say, Re Herbert [1990] NTSC 26; (1990) 101 FLR 279. I will not traverse the full history of that case, or all the issues involved in it. It is material to note that Martin J at 320 placed propositions of the kind I have been referring to in context by making some pertinent observations at 320 of the report:

"It is of high public importance that doubtful wills should not pass easily into proof by reason of the cost of opposing them. It is of equal importance that parties should not be tempted into fruitless litigation by the knowledge that their costs will be defrayed by others. These opposite reasons appear to have alternatively swayed the dcisions to be found in the books. It is the desire of the court to keep both in view, while yielding to neither, and it is in this spirit that the above rules have recommended themselves for adoption."

41 It is quite clear from the tenor of the reasoning of the members of the Court of Appeal in Re Herbert that they generally approved the principles I have been referring to.

42 It is significant, as counsel for the defendants reminds me, that at 316 of the report in Re Herbert, Kearney J drew together his reasoning in respect of that case. It was clear in his view that the legal bearing of the fact that there were suspicious circumstances for which the respondent beneficiary was held responsible is that the discretionary award of the costs of the probate actions exercised judicially falls to be considered in accordance with one of the well-established exceptions to the costs follow the event principle. He went on to say:

"In the circumstances as found it is open, as a matter of discretion to order that the whole of the costs of the unsuccessful parties in the probate actions, including their costs on the issue of undue influence, be paid out of the estates."

43 Before completing this review of the decided cases, it is also useful to take account of another case relied upon by counsel for the defendants, namely, In the Estate of Gertrude Martha Elizabeth Hacke, Public Trustee v Wilson, unreported, NSW Probate Division, NSW SCt; 13 November 1985. In that case, the learned Judge, Powell J, approved the principles that I mentioned earlier, and in discussing the exceptions he went on to say:

"Although the authorities in which an unsuccessful defendant has been allowed his costs out of the estate have involved a variety of factual situations, they appear to embrace such situations as the following:-- 1. The state of the testamentary papers has been such as to leave it doubtful whether an earlier will was revoked by a later (Limas v Goodban (1865) LR 1 P & D 57; Jenner v Ffinch (1879) LR 5 PD 106) or whether an apparently executed will was intended to be testamentary (Thorncroft v Clarke (1862) 2 Sw & Tr 479);

2. the conduct, habits and mode of life of the testator have given the defendant reasonable grounds for questioning the testator's capacity (Davies v Gregory (1873) LR 3 P & D 28; Roe v Nix (1893) P 55, 3. The actions of the testator have given the defendant reasonable grounds for believing that the will was a forgery (Orton v Smith (1873) LR 3 P & D 23);

4. the actions and statements of the testator immediately before, and subsequent to, the making of the will have given the defendant reasonable grounds for believing that the execution of the will had been induced by undue influence (Cousins v Tubb (1891) 65 LT (NS) 716; Shortman v Shortman (1892) LT (NSW) 717);"

44 It is against the background of those principles that counsel for the defendant applies for costs out of the estate. He submits that notwithstanding that his client is the unsuccessful party, there are exceptions to the general rule which might, on his argument, be applicable to the circumstances of the present case, namely where the litigation has been caused by the conduct of the testator the unsuccessful defendant may be relieved of the burden of the costs, and also where there are circumstances which afford reasonable grounds for opposing a Will.

45 As I apply those principles to the circumstances of the present case, one turns firstly to the conduct of the testator. This was a situation where the testator had made an earlier Will favouring the second defendant and had appointed an officer of the second defendant to be the executor of that Will.

46 The evidence showed that the testator remained in touch with the RSL and was a visitor to their premises. It is quite apparent on the finding that I have made that the testator was a party to the decision whereby a Will intended to revoke the earlier Will made by a solicitor was to be made on the domestic premises of the testator in the presence of witnesses organised by the plaintiff, Mr Roebuck.

47 This was in circumstances where the testator was becoming aged and infirm and where it seems on the evidence that no proper arrangements were to be made as to the safekeeping of the Will in question. There was evidence before me of the executed Will being found on the premises after the testator's death.

48 It seems to me that against this background the circumstances of this case do bring the matter within the exception I have enunciated. The conduct of the testator was somewhat out of keeping with his former conduct and there were peculiarities about the circumstances in which the replacement Will of 1996 came into existence. It therefore seems to me that there is a basis for the defendant being relieved of the costs of the litigation pursuant to the first exception.

49 Secondly, when I turn to the exception concerning circumstances which afford reasonable grounds for opposing a Will, I do consider that the stance of the defendants was reasonable in that regard. In my brief review of the findings made in the judgment I have already touched upon the fact that the deceased was buried or cremated in circumstances of some haste without the plaintiff apparently taking steps to notify the RSL or members of the family.

50 It also seems that in a very perfunctory way the plaintiff, Mr Roebuck, took steps to inform the executor under the former Will that a further Will existed. Therefore, when these features of the case are combined, they were bound to raise some basis of doubt in the first defendants, as the children of the deceased, as to whether the 1996 Will was properly executed.

51 To this must be added a number of features of the case which came out in the course of evidence. I have already touched upon the fact that the plaintiff was the person who organised the execution of the Will in the presence of two witnesses with some connection to him. He was the major beneficiary under the estate and these circumstances took place against a background of the testator being an elderly person.

52 I have already noted that in the judgment I described these circumstances as giving rise to reasonable suspicions. As the case proceeded on the evidence, this finding that suspicious circumstances existed did appear to be warranted. This too was bound to put the defendants on notice that there were queries to be raised about the proper execution of the Will. I therefore consider that when all these matters are viewed together it must be held that the defendants were acting reasonably in requiring the Will to be proved in solemn form.

53 It is relevant to the conclusion I have just expressed that some of the affidavits filed by the plaintiff at an early stage were in a very bland and general form and this too is likely to have aroused the apprehensions of the defendants. At trial, the plaintiff conceded under cross-examination that some of the statements made in those affidavits could not be substantiated. Thus the reasonable apprehensions of the defendants proved to be justified.

54 As I have already noted, it was apparent from an earlier stage that one of the witnesses, an important witness in the context of this case, Elaine Turnbull, was not likely to appear to give evidence in person at the trial of the action. In that regard also the defendants can be said to have acted reasonably in requiring that the plaintiff's case be tested.

55 Accordingly, against the background of the principles I have described, and upon the application of those principles and the exceptions to the circumstances of this case as I have outlined them, I do consider that the first defendants should be relieved of the burden of costs in regard to this matter.

56 It is apparent from the review of the decided cases that in giving consideration as to the manner and extent to which they should be relieved of the burden, there are various alternatives open to the Court. Provision might be made on the one hand that there be no order as to costs. The consequence of that would be that the defendants would simply bear their own costs, but would not be obliged to meet the plaintiff's costs of the action.

57 It is apparent, however, that it is also open to the Court to make an order that costs be paid out of the estate. This brings me back to the question of undue influence. I have already noted that there is a forceful authority relied upon by counsel for the plaintiff to the effect that where a defendant fails in respect of an issue of undue influence, that is a matter which may preclude any order for costs out of the estate being made in favour of the unsuccessful defendant.

58 Balanced against that, however, is the countervailing authority relied upon by counsel for the defendant which I have mentioned, namely Re Herbert. That was a case which suggests that it is in order, provided the defendants have been acting reasonably, for an order to be made for the costs to be paid out of the estate.

59 Having given careful consideration to all these aspects of the matter, I do consider that this was a complex and difficult case for all the reasons I have mentioned. I do consider that the defendants behaved reasonably in requiring the plaintiff to prove his case and satisfy the Court that the Will should be proved in solemn form.

60 In the exercise of the discretion which is clearly allowed to me, and having regard to the exceptions I have mentioned, I do consider that this is a case where an order should be made for the costs of the defendants to be paid out of the estate, to be taxed. That is the order I will make formally as a matter of record. It follows that the orders applied for by counsel for the plaintiff will be made save that the costs of the defendants are to be taxed and paid out of the estate.