Steel v Ifrah

2 The general rule applied in exercising the discretion to award costs is that costs should follow the event unless there is adequate reason for a contrary order. In Will of Millar,[1] Hood J identified two classes of case as circumstances where departure from the general rule in probate matters may be warranted. Hood J described the classes in these terms:

(1) Where litigation has been brought about by the conduct of the testator.

(2) (a) Where the parties who failed were reasonably 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

(b) if the circumstances reasonably led to an investigation of the matter, then the costs may be left to be borne by those who incurred them; or

(c) if the testator by his conduct, habits, or mode of life has given opponents of the will reasonable ground for questioning his testamentary capacity, then their costs must be paid from the estate.[2]

3 In a recent case, Zivojin v Babic No 2,[3] Habersberger J was concerned with the second category of case and said of the rules as to costs in probate proceedings:

It is trite law that costs are in the discretion of the court and the general rule is that costs follow the event. However, there are some exceptions peculiar to probate applications, only some of which are relevant to this proceeding. There is a well-recognised exception that if the circumstances reasonably call for an investigation to be made before the court could properly pronounce in favour of the will a contesting party who fails in such a case should not be required to pay costs and should be left to bear his own costs or, alternatively, that the costs should be allowed out of the estate, as was sought by the plaintiffs in this case.

4 The first category of exception is well recognised; where the testator or those interested in the residue have been the cause of the litigation. As Gorrell Barnes P said in Spiers v English:[4]

The two main principles which should guide the court in determining that costs in a probate suit are not to follow the event are, firstly, where the testator or those interested in the residue have been the cause of the litigation; and, secondly, if the circumstances lead reasonably to an investigation in regard to a propounded document. In this latter case, the costs may be left to be borne by those who incurred them; in the former, the costs of unsuccessfully opposing probate may be ordered to be paid out of the estate.

5 The plaintiff referred me to another class of case, one where the usual rules as to costs should apply, submitting the present application fell into this class of case. This is that class of case where a probate proceeding is adversarial litigation that has adopted the convenience of probate process. In Re Buckton,[5] which was not a contested probate case but one concerning the construction of a will, Kekewich J[6] said:

There is yet a third class of cases differing in form and substance from the first, and in substance, though not in form, from the second. In this class the application is made by a beneficiary who makes a claim adverse to other beneficiaries, and really takes advantage of the convenient procedure by originating summons to get a question determined which, but for this procedure, would be the subject of an action commenced by writ, and would strictly fall within the description of litigation. It is often difficult to discriminate between cases of the second and third classes, but when once convinced that I am determining rights between adverse litigants I apply the rule which ought, I think, to be rigidly enforced in adverse litigation, and order the unsuccessful party to pay the costs.

6 Although this application has been referred to the court by the Registrar under s 12 of the Administration and Probate Act 1985 because of the issue of whether the will was revoked by a marriage, it is in my view necessary to look carefully at the circumstances in which that referral has occurred. This was a factual inquiry, and one in which the defendant had a 'box seat'. An explanation of the central role of the defendant in this inquiry is found in my principal reasons.[7]

7 The evidence was tendered by affidavit and no deponent was cross-examined. I mention this because the court in exercising its costs discretion does not have as detailed a picture of the circumstances of the making of wills by each of the deceased and the defendant, as may have been exposed by cross-examination.

8 It was firstly submitted by the defendant, relying on Middlebrook v Middlebrook[8] and In the Estate of Hodges: Shorter v Hodges,[9] that this was a circumstance where the testator had been the cause of the litigation by remaining silent about her plans to marry when giving instructions regarding her marital status to the solicitor. I accept that, where appropriate, this is a well recognised basis for departing from the general rule, but, in my view, the factual basis for this submission is inconsistent with my reasons.

9 My principal reasons make clear that the investigation of the relevant circumstances by the solicitor who took the deceased's instructions and prepared the wills could at best be described as cursory. As I explained at paragraphs 39 to 42 of my principal reasons, I am satisfied that the marriage between the deceased and the defendant was plainly within the deceased's contemplation. Although my enquiry was directed solely to the question of whether marriage was within the deceased's contemplation, when considering costs a relevant question is whether the deceased's contemplation of the marriage was known to or understood by the defendant. Although that matter would have been more clearly exposed had the defendant given evidence, I think it was probable that the defendant well knew why the deceased wanted a new will.

10 Further, I am satisfied that the explanation for the failure to clearly and explicitly reveal the contemplation that was in the mind of the deceased when the solicitor took instructions primarily results from the way that the solicitor conducted himself. I am not disposed to conclude that the need to investigate the issue of revocation of the will by marriage arises from the conduct of the deceased. I am not persuaded by the argument that there were in these circumstances reasonable grounds for the defendant to require an enquiry into the circumstances of contemplation of marriage, at the expense of the estate.

11 Secondly, the defendant submitted that if the circumstances reasonably called for an investigation to be made before the court could properly pronounce in favour of the will, that was an appropriate circumstance for costs to not be decided in accordance with the general rule. Thirdly, the defendant contended that where the unsuccessful party had reasonably been led into the litigation by a bona fide belief and has felt it desirable to enquire into the testamentary dispositions in issue, the general costs rule was displaced.

12 I do not accept that either exception identified in the second and third submissions applies. I am not persuaded on the evidence in this case that the defendant had that bona fide belief or that it was necessary or desirable to enquire into the issue of whether the deceased contemplated marriage when making the will. That is not to take any issue with the Registrar's referral of the application to the court, which is not to the point. Rather, I am of the view that when the circumstances of this litigation are examined, it is, as the plaintiff contends, adversarial litigation.

13 The defendant seeks a benefit either by an intestacy if the will were revoked, or by successfully contending for a provision from the estate if the will is admitted to probate. The plaintiff's invitation that if the defendant undertakes not to bring fresh proceedings, then the plaintiff would not oppose his application for his costs of this proceeding to be paid out of the estate, on the basis that the facts needed to be investigated by the court before probate of the will could be granted, was not taken up. The defendant contended that the plaintiff was not entitled to so constrain his future conduct.

14 I am not satisfied that this proceeding falls within the classes of case where departure from the general rule is warranted. In my view, the defendant was well placed to appreciate that the deceased had their planned marriage in contemplation when the instructions for new wills were given to the solicitor. The defendant has opportunistically sought to take advantage of s 13 (1) because that contemplation had not been openly expressed to the solicitor and because the deceased had not signed the later will drawn up shortly prior to her death.

15 It is my view that the costs should follow the event. The orders of the court will be:

1. Probate of the will dated 25 March 2010 of the above named deceased be granted to Benjamin Joseph Steel of 40 Hughes Avenue, Edithvale, Victoria, sales manager, one of the executors appointed therein, with leave being reserved to Rebecca Mercedes Steel of 1712 Goulburn Valley Highway, Alexandra, Victoria, the other executor, to come in at any time and prove.

2. The plaintiff's costs of this proceeding be paid by the defendant.

3. There be no order as to the defendant's costs of the proceeding.

[1] [1908] VicLawRp 95; [1908] VLR 682, 684.

[2] See also Twist v Tye [1902] P 92, 93-94.

[3] [2013] VSC 113.

[4] [1907] P 122, at 122.

[5] [1907] 2 Ch 406.

[7] Steel v Ifrah [2013] VSC 199.

[8] (1962) 36 ALJR 216, 217 (Dixon CJ).

[9] (1988) 14 NSWLR 698, 709.