Blameworthiness in ordering costs for an estate dispute

Kerr v Kerr & Anor [2017] QSC 323

McMeekin J

The deceased died on 15 April 2017, on the same day the first defendant procured the deceased’s signature on a document purporting to be her final Will. The effect of that document was to gift a significant portion of the testatrix’s estate to the second defendant, the first defendant’s girlfriend.

The plaintiff, however, sought to obtain a grant of probate in respect of the deceased’s Will dated 31 October 1997. The first defendant later did not propound the 2017 Will and conceded the later Will. The plaintiff sought costs against the defendants on the standard basis and that the estate pay the difference between those costs and costs on the indemnity basis.

Determination

At the outset, McMeekin J stated:

[6] The answer to the dispute I think lies in the comment of Sir J. P Wilde (as Lord Penzance then was) in Mitchell v Gard:[1]

“The basis of all rule on this subject should rest upon the degree of blame to be imputed to the respective parties, and the question, who shall bear the costs? will be answered with this other question, whose fault was it that they were incurred?”

[7] The answer to that question here is that it is the first defendant’s fault that there has been litigation. It is only just that he bear the consequences of his actions. …

The first defendant’s conduct

Discussing the first defendant’s conduct leading to the present proceedings, his Honour stated:

[16] … three days after her mother died the first defendant took $81,000 from his mother’s bank account, the balance relating to funeral expenses. He put the monies into an account that he controlled. The first defendant defends his conduct saying that he had placed the monies into the deceased’s account in the first place. That may be so – there has been no proper accounting of what has gone on – but the first defendant had no business taking those monies.

[20] [The Plaintiff] had behaved perfectly properly as the named executor in her mother’s will. The first defendant had obtained her mother’s signature on a document in circumstances that were highly suspicious and purported to espouse that document as her mother’s last will and to the plaintiff’s disadvantage, had taken (and from the plaintiff’s perspective perhaps stolen is not too strong a word) $90,000 from the estate bank account, essentially all the cash available, and failed to divulge information about her mother’s affairs that he very likely possessed. If that was not enough he had indicated an intention to sue the estate and threatened her that she would get nothing from the estate if she did not do as he said. …

As to the plaintiff’s conduct in response, his Honour stated:

[31] … what was the plaintiff to do in the face of all this? I would have thought precisely what she did do – insist that there needed to be a proper examination of what has gone on, insist that the first defendant be removed as executor, and if she was not acceptable to her brother, insist that an independent person take charge of the estate.

[32] In my view the first defendant’s position is indefensible. He has created a great deal of mischief. He has not acted openly and honestly with the plaintiff. She has acted entirely properly towards him. She should be protected as to costs.

The second defendant’s conduct

The second defendant argued that it should not have been joined in the proceedings. Rule 62 of the Uniform Civil Procedure Rules 1999 (Qld) provides:

(1) Each person whose presence is necessary to enable the court to adjudicate effectually and completely on all matters in dispute in a proceeding must be included as a party to the proceeding.

His Honour ultimately found that it was justified for the plaintiff to include the second defendant in the proceedings. As to its costs, his Honour stated:

[42] … By the time [the second defendant] filed that defence the first defendant had indicated that he was not propounding the 2017 Will. Given that position and assuming she agreed, the second defendant would have been better advised to not enter any appearance and simply abide the order of the Court. The only reason that she has incurred any costs is her decision to defend a suit that she says she had no interest in defending. It is hardly the plaintiff’s fault she incurred those costs. …

Conclusion

In conclusion, his Honour stated:

[48] In my judgment the plaintiff has acted perfectly appropriately throughout. There is no reason at all why she should be deprived of her costs. Nor do I see why the estate should bear the costs. That is not to say that the plaintiff should not be indemnified by the estate if necessary. But the first defendant’s conduct has created this litigation. He is the one who involved the second defendant in his machinations. The plaintiff had no choice but to join her in the suit. In my view he should bear the costs of all the parties.

McMeekin J ordered that the first defendant pay the plaintiff’s costs on the indemnity basis and the second defendant’s costs on the standard basis.

David Cormack – Brisbane Barrister & Mediator

Related Posts

Recent Comments

    Categories