The Estate of Mimi Milka Jaksic (Berger) (Costs)

Medium Neutral Citation: The Estate of Mimi Milka Jaksic (Berger) (Costs) [2025] NSWSC 332

Hearing dates: On the papers

Date of orders: 7 April 2025

Decision date: 07 April 2025

Jurisdiction: Equity – Probate and Family Provision List – Probate

Before: Hammerschlag CJ in Eq

Decision: (1) The fifth defendant to pay the costs of the plaintiff, assessed on the ordinary basis up to and including 31 October 2024, and on the indemnity basis from 1 November 2024.
(2) No order as to the fifth defendant’s costs, to the intent that she will bear her own.

Catchwords: SUCCESSION – Costs – Where party unsuccessfully contests grant of probate relying on the presumption that the deceased destroyed her original will animo revocandi – Where it is not established that the original was in the possession of the deceased – Where there are compelling circumstances making it clear that any presumption of destruction or destruction animo revocandi has been rebutted – Where a codicil, although not properly witnessed, refers to and reaffirms the will and, in addition, has testamentary effect – Whether the unsuccessful party should have her costs out of the estate, which is a large one – HELD – The usual rule that costs follow the event should not be departed from and no order should be made for the payment of her costs out of the estate – Observations on the scope and the operations of the so called recognised exceptions in probate matters

Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) r 42.1

Cases Cited: Alexakis v Masters (No 3) [2023] NSWSC 694
Etherton v Mitchelmore [2024] NSWSC 170
Kemp v Findlay [2025] NSWCA 46
Knox v Peacock (No 2) [2024] NSWSC 1372
Perpetual Trustee v Baker [1999] NSWCA 244
Re Estate of Hodges (1988) 14 NSWLR 698
Re Kerry (No 2) (Costs) [2012] NSWCA 194
The Estate of Mimi Milka Jaksic (Berger) [2025] NSWSC 253

Category: Costs

Parties: Dusko Dundjerski (Plaintiff)
Radmila Milanovic (First Defendant)
Ljiljana Jaksic (Second Defendant)
Branko Jaksic (Third Defendant)
Ankica Jaksic-Stevanovic (Fourth Defendant)
Branka Jaksic-Repac (Fifth Defendant)
Natasa Jaksic-Ristovski (Sixth Defendant)

Representation: Counsel:
S Chapple SC / D Yazdani (Plaintiff)
L Ellison SC / P Wallis (Fifth Defendant)
Solicitors:
H+A Legal (Plaintiff)
Novakovic Lawyers (Fifth Defendant)

File Number(s): 2022/00366795

Publication restriction: Nil

JUDGMENT

1. I handed down the principal judgment in this matter on 25 March 2025: The Estate of Mimi Milka Jaksic (Berger) [2025] NSWSC 253.

2. Definitions in the principal judgment are used here.

3. Dusko succeeded and Branka failed, entirely.

4. I received submissions from both sides on costs.

5. Dusko made two offers of settlement to Branka.

6. First, on 23 May 2024, he made a formal offer of compromise for a settlement by way of the grant to him of probate in solemn form of the Will together with the Codicil, with payment to Branka of her costs on the ordinary basis.

7. Second, on 31 October 2024, he made a Calderbank settlement offer to pay Branka $300,000, inclusive of costs.

8. Dusko asks for an order that Branka pay his costs of the proceedings on the ordinary basis up to and including 23 May 2024 and on the indemnity basis thereafter. He asks for an order that to the extent the costs order in his favour is not otherwise satisfied, he be indemnified for any shortfall out of the deceased’s estate for his costs. He submits that no order as to Branka’s costs should be made, to the intent that she should bear her own.

9. Branka submits that her ordinary costs should be paid from the estate on the footing that she acted reasonably but unsuccessfully in challenging the will and bringing about the necessary investigation: see Perpetual Trustee v Baker [1999] NSWCA 244 at [14]. She submits that the deceased, in the management of her testamentary affairs, though “without blameworthy fault”, caused the need for the litigation. She identifies some other matters “that may be relevant to departing from the usual order” which include that “the estate is a large one, being over $25 million” so that payment of Branka’s costs will not have a significant impact on the assets to be distributed to beneficiaries.

10. Dusko makes reference to the oft cited dictum of Powell J (as Powell JA then was) in Re Estate of Hodges (1988) 14 NSWLR 698 at 709:

I turn to deal albeit but briefly with the question of costs.

Costs are, of course, in the discretion of the court, but that discretion, being a judicial, and not an unfettered, one must be exercised in accordance with established principle.

The general principle to be applied in adversary litigation is that costs follow the event, those costs being taxed on a party and party basis. However, over the years, a number of exceptions to this general rule have come to be recognised. In the field of probate litigation, two such exceptions have come to be recognised, they being:

1. where the testator has, or those interested in residue have, been the cause of the litigation, the costs of unsuccessfully opposing probate may be ordered to be paid out of the estate;

2. if the circumstances led reasonably to an investigation in regard to the document propounded, the costs may be left to be borne by those who respectively incurred them: see, eg, Mitchell and Mitchell v Gard and Kingwell (1863) 3 Sw& Tr 278164 ER 1280; Orton v Smith (1873) LR 3 P& D 23; Wilson v Bassil [1903] P 239; Spiers v English [1907] P 122; Kenny v Wilson; In the Estate of Holtam; Gillett v Rogers (1913) 108 LT 732.

To these exceptions to the general principle should, perhaps, be added the principle that, although a legal personal representative may be entitled to recover from a party to litigation costs only on a party and party basis, he, as a fiduciary, retains the right to an indemnity from the estate, and, thus, may have recourse to the estate for any difference between his costs on a trustee basis and the costs recovered from a party.

See too most recently, Kemp v Findlay [2025] NSWCA 46 at [220]-[221].

11. Dusko puts that whilst it is arguable that the failure by the deceased to execute the Codicil properly invited an investigation as to the status of it, that fact alone does not justify a departure from the ordinary rule that costs follow the event because if the Will was not revoked Branka had no interest in whether the Codicil should in its own right be given effect to.

12. He also puts that because there was no evidentiary basis to find that the original Will was given to the deceased, she cannot have been the cause of the litigation “in the relevant sense” and that if investigation was reasonably required to begin with it ceased to be reasonable after the evidence of the various solicitors.

13. For the reasons that follow, I have concluded that:

14. Branka should pay Dusko’s costs on the ordinary basis until 31 October 2024 and on the indemnity basis thereafter;

15. there should be no order for the payment out of the estate of any shortfall; and

16. Branka should bear her own costs.

17. The starting point is Uniform Civil Procedure Rules 2005 (NSW) r 42.1 which provides:

42.1 General rule that costs follow the event

Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.

15. The only express carve out from the primary rule that costs follow the event is when it appears to the Court that some other order should be made. There is no express carve out for probate matters or for any other type of matter.

16. This is not a no costs jurisdiction, even when it comes to parens patriae matters or matters having a public interest element: see Re Kerry (No 2) (Costs) [2012] NSWCA 194 at [13] (Barrett JA); Oshlack v Richmond River Council (1998) 193 CLR 72 at 106 [90] (McHugh J).

17. Recently, Basten AJ in Etherton v Mitchelmore [2024] NSWSC 170 said of the so-called exceptions identified by Powell J that:

…the term “exception” may be thought to imply that the rule does not operate in particular circumstances. That would clearly be wrong: it is not for the courts to craft exceptions to a statutory rule.

18. I respectfully agree.

19. Rule 42.1 operates unless it appears to the Court that some other order should be made. The “recognised exceptions” are not a fetter on the Court’s wide discretion under r 42.1: Alexakis v Masters (No 3) [2023] NSWSC 694 at [12]; Knox v Peacock (No 2) [2024] NSWSC 1372 at [39]. Rather, they are examples of circumstances which one might, because of the nature of the litigation, expect regularly to arise in probate matters, and where the Court might be so satisfied that some other order should be made. Both “recognised exceptions” include the word “may”. This reflects the reality that even if a case comes within an articulated so-called exception, it does not follow that costs will not follow the event.

20. The law does not provide a safety net against the costs risk of a party who motivates a flimsy case or defends one which is not properly defensible. There is no guarantee of a share in the jackpot for a risky (and ultimately losing) bet, especially not just because the estate is large. A large estate is not a reason for a party to “have a go”, on the footing that the detriment to the beneficiaries if costs are paid from the estate has relatively minor impact when compared to the estate as a whole.

21. Neither the deceased nor Dusko caused this litigation. Branka did. There was no reasonable need for any investigation.

22. As the principal judgment recounts, Branka’s only position until late in argument was that the presumption of destruction animo revocandi had not been rebutted. She had no interest in the operation of the Codicil as a testamentary instrument. But the presumption never arose in the first place. Any suggestion that Branka acted reasonably in bringing the litigation or that investigation was required is undermined by unchallenged evidence of conversations inconsistent with destruction of the Will, let alone destruction animo revocandi, the express reference in the Codicil to the Will and the deceased’s dealings with various solicitors.

23. There is no reason in this case to depart from the usual rule. Justice does not require that Branka be entitled to recover her costs from the estate or that the estate be mulcted with those costs.

24. There is no warrant for an order that Dusko’s costs not paid by Branka should come out of the estate. He gets the lion’s share of the estate anyway, and there should be no potential for any prejudice to the Jankovics.

25. Dusko’s offer of compromise does not justify an order for indemnity costs because it did not involve a true compromise, particularly at that stage of the proceedings, but required, in effect, capitulation by Branka.

26. However, the Calderbank offer was a meaningful one. In all the circumstances of this case, its rejection was not reasonable.

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