In a decision in the matter of Re Hayes (No. 3) [2023] VSC, handed down on 13 January 2023, her Honour Justice McMillan has ordered that the unsuccessful applicant who sought revocation of a grant of probate pay the costs of the plaintiff executor on an indemnity basis and, further, that the unsuccessful applicant’s solicitor indemnify the applicant for 30% of those costs.
Background
The deceased died on 21 November 2019. His last Will was dated 24 September 2008 (“the 2008 Will”) and the penultimate Will was dated 17 September 2003 (“the 2003 Will”). Probate of the 2008 Will was granted to the plaintiff executor.
The deceased’s niece sought revocation of the grant of probate of the 2008 Will, alleging that the deceased did not have testamentary capacity to make either the 2008 or the 2003 Wills, did not know and approve of their contents and was subject to undue influence. On 11 April 2022, this application was dismissed.
The plaintiff executor’s costs of the application were approximately $47,962 including Counsel’s fees and disbursements.
Why the court granted costs on an indemnity basis
Upon examination of the written submissions as to costs filed by the plaintiff executor (the applicant did not file any submissions initially), it appeared to the Court that there were a number of conduct issues that needed to be addressed before a decision could be made. The applicant niece’s solicitor was added as a non-party for the purpose of addressing any potential breach of the Civil Procedure Act (“CPA”).
It is well known that costs are in the discretion of the Court, and unless an exception applies (which it sometimes does in probate proceedings), the unsuccessful party pays the successful party’s costs. Generally, this is on a standard basis amounting to approximately one half to two thirds of the actual costs incurred. Indemnity costs of a higher amount can be awarded where the proceeding exhibits special or unusual circumstances such as misconduct or the like.
This judgment dealt with an application by the plaintiff executor for an order for indemnity costs.
The Court recognised that an order for costs on a standard basis would leave the estate out of pocket because of the shortfall between the plaintiff executor’s standard costs and those actually incurred by the plaintiff executor for which he was entitled to a full indemnity out of the estate. This would unduly burden the beneficiaries of the 2008 Will.
Relying on deficiencies in the applicant niece’s substantive claims combined with instances of failing to comply with Court Rules, the late filing of material and lack of response to correspondence, the Court ordered the applicant niece to pay the plaintiff executor’s costs on an indemnity basis. As the Court considered that the applicant’s solicitor had pursued some of the claims by the applicant (lack of testamentary capacity and undue influence) which did not have a proper basis (as prohibited by s18 of the CPA), and because the Court was satisfied that the solicitor did not use reasonable endeavours to ensure that costs were reasonable and proportionate to the issues in dispute nor did he seek to narrow the issues in dispute (as required by ss23 and 24 of the CPA), the Court further ordered that the applicant’s solicitor indemnify the applicant as to 30% of those costs.
This case illustrates why it’s important for both applicants in Wills disputes, and practitioners advising them, to ensure that their claims are reasonably founded.
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