It will come as a surprise to unsuccessful litigants in estate matters when burdened with an adverse costs order if practitioners have not properly advised them as to potential costs orders in a challenge
to an estate.
In the recent decision of the Supreme Court of Queensland in Trinder v Ciniglio [2020] QSC 176 where the estate was represented by Cronin Miller Litigation , the unsuccessful plaintiff in his challenge to the Will (on the grounds of lack of capacity) was ordered to pay the costs of the Estate of the proceeding, on a standard basis and, from a certain point of time (early in the proceeding) subsequent to provision of a Larke v Nugus statement and a Calderbank offer, on the indemnity basis.
On application to appeal the costs decision of the trial judge, the unsuccessful party sought to advance the argument that the general public ought not be penalized for (on the applicant’s argument) legitimately putting the propounders of the will to proof. It was argued that it was appropriate for costs to come out of the estate.
But Her Honour Justice Brown found that the plaintiff pursued the proceedings on “a fairly tenuous basis and without a proper enquiry into the facts and reasonable grounds to do so.” Whilst she accepted that “doubtful wills should not pass easily into proof”, echoing the words of Justice Applegarth in Frizzo v Frizzo (No 2) [2011] QSC 177, she warned that parties should not be “tempted into fruitless litigation by the knowledge that their costs will be defrayed by others.”
So how has this myth perpetuated? Because a significant number of challenges to an estate are by dependents seeking provision from the estate, and following the High Court’s decision in Singer v Berghouse (1993) family provision claims have often been distinguished from other cases where costs follow the event. An often recited passage from the decision of Justice Gaudron in Singer follows:
Family provision cases stand apart from cases in which costs follow the event… costs in family provision cases generally depend on the overall justice of the case. It is not uncommon, in the case of unsuccessful applications, for no order to be made as to costs, particularly if it would have a detrimental effect on the applicant’s financial position. And there may even be circumstances in which it is appropriate for an unsuccessful party to have his or her costs paid out of the estate.”
However, that is not to say that there is thus an accepted rule in family provision claims that the costs award will not ‘follow the event’ as the award of costs still retains a discretionary element,
even in family provision applications. Discretionary elements are precisely as they sound, matters that the Court may take into account when exercising a discretion. In Yeomans v Yeomans & Anor (No 2 ) [2011] QSC 415 the Court took into account the attitude of the parties to the litigation which was reflected by the terms of the offers and the responses and it was found:
“Despite the fact that there is a fund in the form of the estate which is available for the making of costs orders in most family provision applications, the behaviour of the parties in the conduct of the litigation remains a relevant consideration in determining the issue of costs.”
In 2018, a decision of the Supreme Court of Victoria went a long way in debunking the myth. The decision of McMillian J in Molnar v Butas (No 4) [2018] VSC 165 whereby Her Honour states:
“Where an action has been commenced or pursued in circumstances where an applicant, properly advised, should have known he had no chance of success it may be presumed to have been commenced or continued for some ulterior motive or in wilful disregard of the known facts or established law. It is not a prerequisite to the power to award special costs that a collateral purpose or a species of fraud be established. The discretion is enlivened when, for whatever reason, a litigant persists in, what on proper consideration should be seen to be, a hopeless case.”
Here in Queensland, the principles applicable to ordering costs in a probate proceeding were usefully summarised by His Honour Justice Applegarth in Frizzo. Whilst the starting point is that costs should follow the event, there is, as is the case on any award of costs, that discretionary element. His Honour confirmed the two established exceptions in estate litigation as being:
(a) where the testatrix had been the effective cause of the litigation such was the state of testamentary papers and habits and mode of life or where her own statements had brought about the litigation, the costs of unsuccessful parties may be ordered to be paid out of the estate; and
(b) secondly, where the circumstances were such as to afford reasonable grounds for opposing the will, the unsuccessful party, though not usually granted his costs out of the estate, will not be condemned in costs (referring to Mitchell v Gard).
However, there are a number of discretionary factors that will come into play and parties must be careful, irrespective of the nature of the challenge to the estate, to take care to prosecute claims reasonably and genuinely, not just in the commencement of an action, but in the continuation to trial. With that discretion enlivened there is no guarantee for any party, whether successful or otherwise, as to the costs outcome.
If you are considering your position in respect of a deceased estate, or have concerns about the capacity of the testator or terms of the Will, contact Stacy Miller at Cronin Miller Litigation for expert advice on these matters.
