Tonkiss v Graham

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION PROBATE LIST

118541/97 TONKISS & ANOR v GRAHAM & ORS; ESTATE LATE MARJORIE BOBS THOMPSON JUDGMENT 1 HIS HONOUR: I gave judgment in this matter on 4 October 2002. It is back in the list before me today for deciding questions concerning costs. There are two comparatively simple matters which can be dealt with at the outset. 2 The first is the position of the sixth defendant. The sixth defendant, represented by Mr Legg, took no active role in the proceedings save for making some submissions on law. The sixth defendant claims that she should be entitled to the costs from Mrs Tonkiss' share of the estate, and that application is not opposed. I order that the sixth defendant's costs of the proceedings be paid from the interest of Lorraine Gay Tonkiss in the Estate of the Late Marjorie Bobs Thompson. 3 The other matter concerns costs of a notice of motion filed by the executors, seeking to set aside a subpoena issued by the active defendants. When that notice of motion had been filed, the active defendants did not seek to support that subpoena. I order the seventh to tenth defendants inclusive, to pay the costs of the plaintiffs of that notice of motion. 4 The more substantial issue for decision today concerns the costs of the proceedings as a whole. The starting point is Part 52A, Rule 29 of the Supreme Court Rules, which says: "Where a beneficial gift is, by reason of the Court's satisfaction under section 13(2)(c) of the Wills, Probate and Administration Act 1898, not void, the applicant for relief shall, unless the Court otherwise orders, pay the costs of and occasioned by the application and any order made on or in consequence of the application." 5 Mr Hallen of Senior Counsel, for the plaintiff, submits that this is an appropriate case for the Court to "otherwise order". 6 One fact relevant to that question is that the plaintiffs, on 30 July 2002, wrote to the solicitors for the defendant, offering that their costs on an indemnity basis would be paid out of the Estate if, in effect, they consented to a grant of probate of the Will of 14 December 1988, and to an order for the plaintiff's costs, on an indemnity basis, being paid out of the Estate. That offer was made without prejudice as to costs. It was an offer which was initially expressed to expire on 14 August, 2002, but that deadline was extended to 20 August 2002. 7 The response of the active defendants was to reject the offer, and to make, themselves, a Calderbank offer to settle the proceedings on the basis that their costs to date were paid on an indemnity basis and the Estate paid $1.5m to the next of kin defendants. 8 Those non-active defendants who were represented by Shaw McDonald solicitors, took a different stance. They decided, and communicated their decision by letter dated 9 September 2002, not to take any further part in the proceedings, save to put argument concerning costs. Those defendants, for whom Bilby Dan appeared, likewise did not accept the offer. 9 The letter of Shaw McDonald of 9 September 2002 conveyed an offer which had been put between counsel at an earlier time, around 20 August. 10 The plaintiffs say that this was not a case where the active defendants took a role in the proceedings which was designed only to assist the court. Those defendants conducted a vigorous credit-based cross-examination, and made submissions that the evidence of witnesses should not be accepted. In the result, I found, in broad terms, that the factual basis on which the credit based cross-examination had been conducted was made out, but that it did not lead to the conclusion that the evidence of the relevant witnesses should not be accepted. 11 The plaintiffs submit that, from the outset, there were some factors which I ultimately regarded as important in the judgment that I came to, and which should have been known to anyone who became acquainted with the facts of the case. These were the way that none of the next of kin had featured in the testator's testamentary intentions for a very long time, that the relationship between Mrs Thompson and Mrs Tonkiss was a close one, for practical purposes like a family relationship, that there was no challenge to the medical evidence given by Dr Bennett and that, when the full story of the circumstances of execution of the Will was put before the Court, there was nothing in it to show that the Testatrix was acting under a constraint which meant that her decision to substantially benefit Mrs Tonkiss was anything other than free and voluntary. 12 The first three of these factors are ones which should have been apparent to anyone who familiarised themselves with the affidavits filed in the case. I do not accept that the fourth of these factors was obvious in the same way. Part of the process by which I have been able to come to the conclusion that, once the full facts were placed before the Court, there was nothing in them to cast doubt on the decision of Mrs Thompson to benefit Mrs Tonkiss, was the way the witnesses responded to the cross-examination which was conducted. There was no way for the defendants to know how they would respond, short of actually conducting the cross-examinations. 13 The plaintiffs placed some reliance on the fact that the counter offer of $1.5 million made by the active defendants was unrealistic. In circumstances where one is deciding whether a Calderbank offer should entitle someone who made it to a favourable costs order, the reasonableness of that offer, and how it compares to the outcome of the proceedings when fully litigated, are relevant factors. However I am afraid I do not see the relevance of whether or not a counter-offer made is a reasonable offer. It is hardly to be expected that a litigant who rejected a Calderbank offer might be better off if he rejected it and put no counter-offer, than that if he rejected it and put an unrealistic counter-offer. I dismiss this factor that the plaintiffs rely upon. 14 For their part, the defendants point out that all the defendants were cited to see the proceedings. They say that for geographical reasons they retained three different solicitors. It is correct that the defendants are geographically dispersed. 15 The defendants say that the circumstances in which the Will came to be executed raised matters which needed to be tested by cross examination. I agree. The defendants also point out that although the medical evidence from Dr Bennett showed the deceased retained the capacity to make a new Will, her report was not addressed to the topic of whether the gift in the residuary clause met the test laid down in section 13(2)(c) of the Wills, Probate and Administration Act. That is also correct. The cross-examination of Dr Bennett was cross-examination which dealt with the issue under section 13(2)(c). Even though Dr Bennett was able to respond to that cross-examination in a way which showed that the mental state of Mrs Thompson was such that it cast no doubt on whether she knew and approved the particular gift to Mrs Tonkiss, and made it freely and voluntarily, the cross-examination was still, it seems to me, one which it was appropriate to embark on. 16 Likewise, even though the active defendants embarked on a credit-based cross-examination, that did not, it seems to me, result in them going further than they ought to have gone, or further than they could go without putting themselves at risk as to costs. There were circumstances which called for investigation, and which were investigated by that cross-examination. When the testator executes a Will with a beneficiary, or the spouse of a beneficiary as an attesting witness, there is no requirement that someone who puts to proof the matters referred to in section 13(2)(c) must conduct the litigation with one arm tied behind their back. If there are circumstances which call for a probing investigation, part of putting the proponents of the Will to proof of the section 13(2)(c) matters can be to have that probing investigation. 17 Even though the defendants have failed in their challenge to the section 13(2)(c) matters, I do not think this is an appropriate case to "otherwise order". The rule which is contained in Part 52A Rule 27 is an application, to the circumstances of that section, of the principle which underlies the order of costs in an ordinary probate case, conveniently summarised by Powell J in Re: Hodges; Shorter v Hodges (1988) 14 NSWLR at 709. There his Honour records the principle that 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. In the present case it is the conduct of the testatrix, in having her Will executed before the spouse of an interested beneficiary, which is the substantial cause of the litigation. 18 I order the costs of the defendants and the costs of the plaintiffs be paid from the interest of Lorraine Tonkiss in the Estate of the late Marjorie Bobs Thompson, the costs of the plaintiffs being paid on the indemnity basis. 19 So far as the number of sets of costs to be awarded to the defendants are concerned, it seems to me that the fact that the defendants were all cited to see the proceedings, and the geographical dispersion of the defendants, means that prior to the start of the hearing of the matter it was appropriate for them to instruct the firms of solicitors they actually instructed. Up to that stage of the proceedings I doubt that instructing more than one firm would have resulted in significantly more costs than would have been incurred if they had all instructed the one set of solicitors. However, once the hearing began the situation altered. 20 From and including the first day of the hearing on 17 September 2002, I order that there be one set of costs payable between the defendants other than the sixth defendant. **********

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