CITATION: In the Estate of HRA deceased [2021] QSC 49
PARTIES: In the Estate of HRA deceased
CWK and BKC (applicants) v SD (respondent) FILE NO/S: SC No 5811 of 2020
DIVISION: Trial Division
PROCEEDING: Application
ORIGINATING
COURT: Brisbane
DELIVERED ON: 19 March 2021
DELIVERED AT: Brisbane
HEARING DATE: On the papers
JUDGE: Lyons SJA
ORDER: 1. The parties’ costs of and incidental to the proceedings up to 24 July 2020 be assessed on the indemnity basis and paid out of HRA’s estate.
2. The costs of the applicants from 24 July 2020 be assessed on the standard basis and be paid by the respondent.
3. Save to the extent that the costs of the applicants are ordered to be paid by the respondent, their costs be assessed on the indemnity basis and paid out of HRA’s estate.
4. The Reasons for judgment in these proceedings is to be anonymised to prevent the identification of the parties.
CATCHWORDS: PROCEDURE – CIVIL PROCEEDINGS IN STATE AND
TERRITORY COURTS – COSTS – GENERAL MATTERS – where application made for Letters of Administration on intestacy of the estate of HRA and the court ordered that they be issued to the applicants – where respondent was wholly unsuccessful in her defence – where applicants argue that costs should follow the event – where the respondent submits that her costs be paid out of the estate because exceptions to the
general rule on costs apply – whether these exceptions apply
Frizzo & Anor v Frizzo & Ors (No 2) [2011] QSC 177 J & D Rigging Pty Ltd v Agripower Australia Limited & Ors
[2014] QCA 23
Mitchell v Gard 164 ER 1280 Oreski v Ikac [2007] WASC 195 Singh v Singh [2008] NSWSC 715 SPM v LWA [2013] QSC 138
COUNSEL: C A Brewer and P J Coore for the applicants J I Otto and A D C Choy for the respondent SOLICITORS: Butler McDermott Lawyers for the applicants
Payne Butler Lang for the respondent
[1] The deceased HRA died in January 2020 at the age of 92. He had never married and had no children. His closest relatives at the time of his death were his niece CWK and nephew BKC. At the time of his death, HRA was living at a Nursing Home in regional Queensland and left an estate valued in excess of $1.6 million. That estate included a property valued at $350,000, another property valued at $200,000, a term deposit of $1 million, and over $128,000 in various bank accounts. [2] HRA died without leaving a properly executed will. He had however left an
informal document in the form of a letter dated 12 February 2010 which gifted the property that he lived in, to SD his de facto partner at that time. He did not otherwise dispose of his assets. CWK and BWC applied for Letters of Administration on intestacy
[3] SD sought a declaration that she was HRA’s de facto partner at the time of his death.
[4] HRA had been in a long-term relationship and had been living with SD, a widowed friend, for about 17 years. They had lived together from around 1995 until September 2012 when SD moved into a Retirement Village in a nearby town at the age of 75. HRA subsequently moved into a Nursing Home some 200 kilometres away.
[5] At the time of trial SD was 81 years of age and had lost capacity. She had limited contact with HRA in the seven years prior to his death due to his advanced dementia, her medical conditions and the distance between their residences.
[6] HRA’s financial affairs were being managed by the Public Trustee of Queensland as administrator at the time of his death. As he died without leaving a validly executed will his estate had not been administered at the time of trial.
[7] On 22 January 2021 I ordered that Letters of Administration on intestacy were to issue to the applicants. I was not satisfied that SD was the deceased’s spouse in the two years prior to his death. I further ordered that the parties were to make submissions as to the form of the orders and as to costs.
[8] On 2 February 2021, I made final orders in relation to the substantive proceedings. I also made further directions for the provision of sub missions in relation to costs. [9] On 29 January 2021 the applicants provided written submissions and the
respondents provided their submissions on 5 February 2021. The applicant’s submissions in reply filed on 11 February 2021.
The Applicants’ Submissions on Costs
[10] The applicants submit that costs should follow the event and that the respondent should pay the applicants’ costs on the standard basis up to 23 July 2020, and on an indemnity basis after 23 July 2020.
[11] The applicants argue that they are entitled to indemnity costs from that date because the solicitors for the applicants made an offer to settle the entire proceedings on 23 July 2020.1 That offer was that the respondent would receive the property that she had resided with HRA in prior to her move to the Retirement Village and the applicants would obtain Letters of Administration on intestacy and take the remainder of the estate. Each party would bear their own costs.2
[12] The applicants argue that it was unreasonable for the respondent not to have accepted the offer in circumstances where after trial the respondent has not been left with any part of the estate. If she had accepted the offer, she would have received real property valued at $350,000.3
The Respondent’s Submissions on Costs
[13] The respondent submits that her costs be paid out of the estate4 and argues that the usual rule that costs follow the event may be displaced at the discretion of the Court in this case. In this regard reliance is placed on the decision in Frizzo & Anor v
Frizzo & Ors (No 2) where Applegarth J held:5
“(a) Where the testatrix has been the effective cause of the litigation, such as where the state of her testamentary papers, or her habits and mode of life, or where her own statements have brought about the litigation, the costs of unsuccessful parties may be ordered to be paid out of the estate.
(b) Where the circumstances are 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…”
[14] There can be no doubt that courts have recognised in a long series of cases that there are some unique costs considerations which surround probate matters and that there are two exceptions as set out above. In the 1863 decision of Mitchell v Gard,6 Sir JP Wilde stated “It is of high public importance that doubtful wills should not pass
1 Submissions on Behalf of the Applicants as to Costs at [5]. 2 Submissions on Behalf of the Applicants as to Costs at [5](a)-(c).
3 Submissions on Behalf of the Applicants as to Costs at [7]; Affidavit of CWK, Exhibit “WKC” at 2. 4 Written Submissions on Behalf of the Respondent at [1](a).
5 [2011] QSC 177 at [27]. 6 (1863) 164 ER 1280 at 1281.
easily into proof by reason of the cost of opposing them.” There is however an important proviso that parties should not be “tempted into a fruitless litigation by the knowledge that their costs will be defrayed by others.” These two exceptions do however frequently overlap. As Barker J stated in Oreski v Ikac:7
“Due to the subjectivity of the test, no clear rules seem to have evolved from the many cases on point. Further, the large degree of overlap between the two exceptions has complicated the question. The most that can be said is that the exceptions, just like the general rule, provide a starting point for analysis and then the court is able to exercise its discretion as to costs in order to do justice between the parties.”
[15] In my view the deceased neglected to appropriately attend to his affairs in a timely way.8 Despite being specifically told by Dr Forster in July 2011 to make a will and organise an EPA, he failed to formalise a will and have it properly signed and witnessed. Whilst he had left a handwritten document among his papers which, whilst he described it as his only Will and Testament, did not dispose of all his property and did not appoint an executor. Whilst that document purported to leave the house he resided in with SD to SD, who he described in 2010 as his partner of ten years, they were no longer living together by the end of 2012, just two years later.
[16] I also accept the force of the submission that as HRA had been in a long term de facto relationship with SD, the absence of a formal will meant that there had to be inquiry into the relationship between the deceased and SD, as “the proper disposition of [HRA]’s estate could not be ascertained without the investigations made on [SD’s] behalf”.9
[17] I also consider that the factual background was complicated by the fact that SD lost capacity around the time of the deceased’s death and that SD was unable to give evidence during the proceedings due to her dementia. That circumstance meant that investigations into the history of her relationship with HRA, his circumstances prior to his death, the arrangements between them and her knowledge of the informal document all needed to be ascertained. That evidence also revealed that there was some recognition of SD’s status as HRA’s long term partner given the Public Trustee kept the respondent informed about the deceased’s financial affairs. The solicitor for SD had also asserted her status as HRA’s de facto on a number of occasions over the seven year period of their separation. Whilst I ultimately found that SD had not been involved in HRA’s life in any meaningful way for a long period of time, I consider that HRA’s failure to arrange his affairs led to the litigation. Therefore I consider it reasonable in these circumstances that the costs of all parties should be paid from the estate on the indemnity basis up until the time of the offer on 23 July 2020.
[18] What then are the appropriate orders as to costs after the offer was made on 23 July 2020? The applicants argue that the respondent should pay their costs on indemnity basis after that date given the refusal of the offer. The applicants maintain that it
7 [2007] WASC 195 (S) at 6 [13].
8 Written Submissions on Behalf of the Respondent at [5]-[8]. 9 Written Submissions on Behalf of the Respondent at [9].
was unreasonable for the respondent to refuse the Offer of 23 July 2020, as the extent of the respondent’s evidence, and therefore her claim, was known at that point in time.
[19] I accept the strength of the remarks of Young CJ in Singh v Singh where his Honour stated that, in disputes regarding wills, it is not always the case that the estate should cover the costs of the parties.10
[20] In my view, at the time that the offer was made, the evidence as to the relationship between HRA and SD was not strong as SD had visited HRA twice between 2013 and 2020. There was however some possibility that the evidence would reveal some ongoing interest in HRA due to some significant involvement by SD with HRA’s carers, medical practitioners or administrators. As the respondent was suffering from dementia, the position was not entirely clear and I accept that some objective evidence from bodies such as the Nursing Home, QCAT, the Adult Guardian and the Public Trustee may have revealed some further in formation in that regard after the date of the offer.
[21] In this regard I note in particular that whilst the offer was made on 23 July 2020, and was open until 6 August 2020, the evidence of both parties was not in fact due until 12 August 2020, and was not finalised until late in September 2020.11 As the Court of Appeal recognised in J & D Rigging Pty Ltd v Agripower Australia
Limited & Ors the stage of the proceeding at which the offer was received, among
other factors, is relevant to determining whether a party acted unreasonably12 and that “The refusal of an offer to compromise does not warrant the exercise of the discretion to award indemnity costs.”13 The respondent highlights this factor and submits that, at the time that the offer was received, “The strength of the competing claims was unknown…”14
[22] In those circumstances I consider that whilst the respondent should pay the applicants’ costs after 23 July 2020, it should be on the standard basis.
Non-identification Order
[23] The respondent sought an order that the judgment of the Court, and the electronic file concerning the proceeding be de-identified. The respondent argues that the
parens patriae jurisdiction of this Court is enlivened due to the respondent’s
dementia.15 The respondent noted the remarks of Henry J in SPM v LWA:16
“The order is more so sought for the protection of the individual's dignity and privacy…”
[24] The respondent submits that the primary Judgment in this proceeding contains private details relating to the relationship between HRA and the respondent, as well
10 Singh v Singh [2008] NSWSC 715 at [51]; Submissions in Reply on Behalf of the Applicants (Costs)
(amended) at [13].
11 Written Submissions on Behalf of the Respondent at [14]. 12 [2014] QCA 23 at [6].
13 [2014] QCA 23 at [5].
14 Written Submissions on Behalf of the Respondent at [14].
15 Written Submissions on Behalf of the Respondent at [17], relying on Re: JT [2014] QSC 163 at [38]. 16 [2013] QSC 138 at [4].
as their medical records, states of mind and financial affairs.17 It is submitted that the Judgment can be de-identified in a manner consistent with the principles of open justice.18 The applicants do not oppose such an order.19
[25] I am satisfied given the circumstances and the necessity to protect the dignity and privacy of both HRA and the respondent that the Judgment can be de-identified in a manner consistent with the principles of open justice, and such an order should be made.
Orders
[26] The orders for costs will be:
1. The parties’ costs of and incidental to the proceedings up to 24 July 2020 be assessed on the indemnity basis and paid out of HRA’s estate.
2. The costs of the applicants from 24 July 2020 be assessed on the standard basis and be paid by the respondent.
3. Save to the extent that the costs of the applicants are ordered to be paid by the respondent, their costs be assessed on the indemnity basis and paid out of HRA’s estate.
4. The Reasons for judgment in these proceedings is to be anonymised to prevent the identification of the parties.
17 Written Submissions on Behalf of the Respondent at [18]. 18 Written Submissions on Behalf of the Respondent at [18]. 19 Written Submissions on Behalf of the Respondent at [18].
