← All cases

[2021] NSWSC 882

Chant v Curcuruto; Chant v Curcuruto (No 2)

The Court in each proceeding: (a) Orders that the Plaintiffs pay the Defendants’ costs, calculated on the ordinary basis. (b) Orders that the Defendants’ costs, calculated on the indemnity basis, be paid, or retained, as the case may be, out of the estate. (c) Orders that any difference between costs calculated on the ordinary basis recovered from the Plaintiffs, and the costs, calculated on the indemnity basis, of the Defendants be paid out of the estate. (d) Makes no order as to the Plaintiffs’ costs, to the intent that they are to bear their own costs. (e) Orders that the Court Books be returned.

Catchwords

COSTS — Two contested Probate proceedings involving different will-makers (husband and wife) heard consecutively with the evidence in one being evidence in the other – Probate sought in respect of the last Will of the two different will-makers – Plaintiffs unsuccessful in propounding each of the Wills – Defendants succeeded in propounding the penultimate Will of each will-maker - Only outstanding issue for determination is whether the Plaintiffs’ costs of each proceeding should be paid out of the estate of each will-maker or whether they should pay the Defendants’ costs, calculated on the ordinary basis of the proceedings – Otherwise agreed that Defendants’ costs, calculated on the indemnity basis, be paid out of the estate of each will-maker

Cases cited

  • Brown v Guss (No 2)[2015] VSC 57
  • Chant v Curcuruto; Chant v Curcuruto[2021] NSWSC 751
  • Davies v Gregory (1873) LR 3 P&D 28
  • In Re Green[1969] WAR 67
  • In the Estate of Moyle: Moyle v Moyle (Supreme Court (NSW), Santow J, 18 June 1988, unrep)
  • Kostic v Chaplin[2007] EWHC 2909 (Ch)
  • Middlebrook v Middlebrook(1962) 36 ALJR 216
  • Mitchell v Gard (1863) 3 Sw & Tr 275; 164 ER 1280
  • Myers v Elman[1940] AC 282; [1939] 4 All ER 484
  • Nicholson v Knaggs [No 3 - Severance And Costs][2009] VSC 328
  • Norbis v Norbis (1986) 161 CLR 513;[1986] HCA 17
  • Pates v Craig (Estate of the late Joyce Jean Cole) (Supreme Court (NSW), Santow J, 5 September 1995, unrep)
  • Perpetual Trustee Company Ltd v Baker[1999] NSWCA 244
  • Re Plant [1926] P 139
  • Spiers v English [1907] P 122
  • Starr v Miller; Starr v Miller (No 2)[2021] NSWSC 685
  • Sydney Markets Credit Services Co-operative Ltd v Taylor (No. 3)[2015] NSWSC 1236
  • Tombling v Universal Bulb Company [1951] 2 TLR 289
  • Tsaousis v Tsaousis (a minor, by his litigation guardian Tsaousis)[2019] VSC 511
  • Twist v Tye (1902) P 92

Legislation cited

  • Civil Procedure Act 2005 (NSW)
  • Uniform Civil Procedure Rules 2005 (NSW)

Judgment

Introduction

  1. [1]

    HIS HONOUR: This is my judgment determining the appropriate order for costs arising out of the trial of two Probate proceedings, heard consecutively, in which I delivered reasons for judgment on 25 June 2021, which bear the medium neutral citation Chant v Curcuruto; Chant v Curcuruto [2021] NSWSC 751 (“the principal judgment”). Events and people are referred to in these reasons in the same way as they were in the principal judgment. For further background, the reader is referred to the principal judgment.

  2. [2]

    At the request of the parties, I did not deal with the costs of the proceedings in the principal judgment. However, the position that each party would, ultimately, adopt, on the question of costs, was made clear on the second day of the hearing: principal judgment at [166] – [168].

  3. [3]

    At the time I published the principal judgment, I stood both proceedings over for the hearing on costs, allowing some time for discussions to take place between the parties, in the hope that they might reach an agreement. Unsurprisingly, no agreement was reached by them. Hopefully, these reasons for the costs orders proposed to be made, will completely dispose of the two proceedings.

  4. [4]

    In summary, in the principal judgment, I concluded that:

    1. (1)

      Ken did not have testamentary capacity when he made the 2017 Will;

    2. (2)

      Irene did not have testamentary capacity when she made the 2017 Will;

    3. (3)

      Ken did not know and approve the contents of the 2017 Will;

    4. (4)

      Irene did not know and approve the contents of the 2017 Will; and

    5. (5)

      In light of the above conclusions, it was not necessary to decide if the conduct of either Karen or Jeffrey, gave rise to the application of the doctrine of suspicious circumstances. (There was no dispute that there were suspicious circumstances to be considered.)

  5. [5]

    In Ken’s proceedings 2018/117875, the Court made the following orders:

  6. [6]

    In Irene’s proceedings 2018/122543, the Court made the following orders:

  7. [7]

    It follows that in each proceeding the Plaintiffs were wholly unsuccessful in establishing the validity of Ken’s 2017 Will and the validity of Irene’s 2017 Will.

  8. [8]

    At the hearing of the costs application, Karen and Jeffrey sought an order that their costs, calculated on the ordinary basis, be paid out of the estate of each of Ken and Irene, and an order that Steve and Cathie’s costs, calculated on the indemnity basis, of the proceedings, be paid out of the estate of each of Ken and of Irene. (They accepted, therefore, that it was proper for Steve and Cathie to have challenged the validity of each of the 2017 Wills.)

  9. [9]

    Steve and Cathie, bearing in mind that they had succeeded in both proceedings, sought an order that Karen and Jeffrey pay Steve and Cathie’s costs, calculated on the ordinary basis; and an order that the Defendants’ costs otherwise, calculated on the indemnity basis, be paid out of the estate of the deceased, in both proceedings. In broad summary, they submitted that Karen and Jeffrey had commenced and pursued, unreasonably, the litigation to its very end, with the result that the estate of each of Ken and Irene has been diminished in value because of the costs of the proceedings that had been incurred.

  10. [10]

    Senior counsel for Steve and Cathie submitted that the Court should make no order as to Karen and Jeffrey’s costs, in both proceedings, to the intent that they should pay their own costs.

  11. [11]

    It can be seen from the above, that the sole issue to be determined relates to Karen and Jeffrey’s costs in each proceeding.

  12. [12]

    Neither party submitted as an alternative to the extreme position adopted, respectively, that Karen and Jeffrey should be ordered to bear their own costs of the proceedings and that Steve and Cathie’s costs, calculated on the indemnity basis, should be paid out of the estate of each of Ken and Irene.

  13. [13]

    Neither party read any evidence in support of their application for costs at the hearing. Counsel for each of the parties was, or were, content to refer to the principal reasons for judgment and the findings made. Somewhat surprisingly, one might think, no documents, being an Offer of Compromise, or correspondence containing a Calderbank offer, were tendered. Nor was any evidence given which would enable a gross sum costs order to be made.

  14. [14]

    The positions of the parties are diametrically opposed. The amounts at stake, whilst not disclosed to the Court, must be considerable, bearing in mind the duration of the proceedings and the hearing. Therefore, I decided to reserve my judgment and publish detailed reasons.

Submissions

  1. [15]

    Counsel for each party provided written submissions and made oral submissions at the costs hearing. I am most grateful to all of them for those submissions, which have enabled me to deal with the costs issue promptly.

  2. [16]

    Counsel for Karen and Jeffrey submitted that they had a fiduciary duty, as executors named in the 2017 Wills, to propound the last Will of each of Ken and Irene. Furthermore, even if the 2017 Wills had not been propounded by them, the Court would still have been required to conduct an inquiry into the validity of each of those Wills.

  3. [17]

    They also submitted that the following factors should lead the Court to make the orders sought by them:

    1. (1)

      Each of Ken and Irene executed about 20 Wills over the last 25 years of his and her life respectively, significantly changing beneficiaries from the previous one, reflecting the falling in to, and falling out of, favour of Ken and Irene, from time to time (principal judgment at [156]);

    2. (2)

      None of the parties had been named as a beneficiary in the 2014 (pre-penultimate) Will of Ken or Irene;

    3. (3)

      The familial relationship between Karen and Jeffrey and Ken and Irene was relevant. Karen was the younger brother of Irene and both had lived and vacationed with Ken and Irene over many years (principal judgment at [348], [379]). Besides a minor gift to Ken’s nephew in Wills created prior to 2002, Karen was the only family member to appear in either of Ken’s or Irene’s Wills;

    4. (4)

      The 2017 Will of each of Ken and Irene had been prepared at the request of Ken and Irene, directly to Ms Blackadder, who had initially attended upon them at Harbison Care for the purpose of dealing with his and her Powers of Attorney and Appointment of Enduring Guardian;

    5. (5)

      Irene and Ken had raised suspicions about the Defendants to Ms Blackadder, to Mr and Mrs King, to Karen and Jeffrey, to Steve and Cathie themselves, and to medical practitioners: principal judgment at [243], [340], [402], [491], [623];

    6. (6)

      Irene was unable to be examined by Dr Barnett, due to her distrust of medical practitioners and her generally unco-operative nature: principal judgment at [71]; Tcpt, 17 February 2021, p 738(17-39). Thus, the Court was required to consider the evidence of a number of lay witnesses, who were cross-examined, in order to determine whether Irene had testamentary capacity;

    7. (7)

      Irene, was described as the “controlling and outspoken personality” (principal judgment at [70]), who dictated to Ken her wishes, with which he abided as the “dutiful husband” because of his “mild and timid” personality (principal judgment at [69]);

    8. (8)

      Ken and Irene were childless and there were no natural claimants on the bounty of either of them, which, so it was said, gave rise to “an environment of contest and suspicion for the Shepherd’s affection”; and

    9. (9)

      Irene and Ken were “in effect, physically and socially isolated in their later years” living at Southdowns. This made them vulnerable and created an environment which “fuelled suspicions into the Curcurutos’ [sic] motives”.

  4. [18]

    Counsel for Karen and Jeffrey relied upon the decision in Perpetual Trustee Company Ltd v Baker [1999] NSWCA 244, in submitting that:

  5. [19]

    Counsel for Karen and Jeffrey noted that it could not be said that their actions had unduly extended the hearing of the matter or affected the orderly conduct of the matter.

  6. [20]

    He summarised his arguments as follows:

  7. [21]

    In his oral submissions, counsel for Karen and Jeffrey made the point that there was no evidence that the solicitor, Ms Blackadder, at the time of taking instructions for the Power of Attorney and the wills, was acting as anything other than the solicitor for Ken and Irene: Tcpt, 7 July 2021, p 02(19-22). Particularly, there was no evidence that Karen and Jeffrey had given instructions for the contents of the 2017 Will, and as he had submitted at the hearing, that any involvement of Karen and Jeffrey “was purely logistical”: Tcpt, 7 July 2021, p 02(40-44).

  8. [22]

    Ultimately, counsel for Karen and Jeffrey submitted (Tcpt, 7 July 2021, p 03(10 -11)):

  9. [23]

    Counsel for Karen and Jeffrey submitted that based on the evidence of Ms Blackadder and Mrs and Mr King, there was “fairly strong” evidence of the capacity of each of Ken and Irene at the beginning of the case: Tcpt, 7 July 2021, p 06(39-42), p 07(05-14).

  10. [24]

    He further submitted that there were no obvious reasons to doubt the motives, or truthfulness, of the evidence given by either Mrs King or Mr King. He added that “a legal practitioner is not to be the judge of credibility of witnesses or the validity of an argument (Tombling v Universal Bulb Company [1951] 2 TLR 289)” and that “[i]f the solicitor decides to believe their client, criticism cannot be made of that (Myers v Elman [1940] AC 282; [1939] 4 All ER 484)”.

  11. [25]

    Counsel for the Defendants put the case of Steve and Cathie quite simply:

  12. [26]

    They also pointed to a number of the Court’s findings in the principal judgment:

  13. [27]

    At the hearing, counsel for Steve and Cathie highlighted the relevance of the allegations of dishonesty made against Steve and Cathie, which was to be supported by evidence from Ms Boustani, whose affidavit was not read on the first day of the hearing: Tcpt, 7 July 2021, p 05(25-30). This was a relevant matter because in the principal judgment the Court found there was not one skerrick of evidence to support any allegations against the Steve and Cathie: principal judgment at [318].

  14. [28]

    Counsel for Steve and Cathie did not specifically submit that Karen and Jeffrey had acknowledged that there were suspicious circumstances (a matter mentioned in Karen and Jeffrey’s counsel’s submissions), with the consequence that they would have known that the onus was on them, as the Plaintiffs, to satisfy the conscience of the Court that each of Ken and Irene did know and approve of the contents of his and her 2017 Will respectively.

  15. [29]

    Counsel for Karen and Jeffrey, in reply, submitted that regardless of any evidence of Ms Boustani that might have been given, there was no actual pleading of dishonesty against Steve and Cathie: Tcpt, 7 July 2021, p 10(41-43), p 10(48-49).

  16. [30]

    However, as was pointed out in arguendo, evidence of dishonesty would have been relevant to the question of the allegations being made by Ken or Irene and whether the assertions said to have been made by them against Steve and Cathie were justified. In fact, this had been raised with counsel on the first day of the hearing: Tcpt, 2 February 2021, p 36(15 –16).

  17. [31]

    Referring to Sydney Markets Credit Services Co-operative Ltd v Taylor (No. 3) [2015] NSWSC 1236, counsel for Steve and Cathie finally submitted (Tcpt, 7 July 2021, p 05(50)-06(15)):

The Law

  1. [32]

    I have recently dealt with how costs in contested Probate proceedings are to be borne in Starr v Miller; Starr v Miller (No 2) [2021] NSWSC 685. Because of the recency of that decision, I shall not repeat what I wrote in that case. What follows, therefore, is merely by way of summary, emphasis and elaboration:

Determination

  1. [33]

    There are competing features in the proceedings to be borne in mind. The conduct of Karen and Jeffrey at the time of the instructions for, and the execution of, each of the two 2017 Wills must be taken into account in deciding the appropriate order for costs. Then, I must consider the reasonableness and the propriety of their conduct in commencing the proceedings, and then subsequently in seeking to propound, and maintain proceedings to establish the validity of each of Ken’s 2017 Will and Irene’s 2017 Will.

  2. [34]

    It is correct to submit that in these proceedings Karen and Jeffrey were seeking to propound the last Will in time of each of Ken and Irene, each of which was duly executed, and which apparently, was a valid document. Generally, if the last will of a will-maker is not to be admitted to probate, but an earlier one is, the last will has to be pronounced against and the earlier will (if there is one) pronounced for in solemn form or (if there is no earlier will) an intestacy declared.

  3. [35]

    The view that each of the 2017 Wills was a valid one was supported by the subsequent evidence given by Ms Blackadder, the solicitor who prepared each of the Wills. The evidence of Mrs and Mr King also appeared to support the validity of each of the Wills.

  4. [36]

    In relation to Ms Blackadder, it must have been clear that she had very limited experience in the drafting of Wills and the assessment of testamentary capacity, however, Karen and Jeffrey would not have been able to judge whether the evidence of each of those witnesses, at a hearing, would be accepted.

  5. [37]

    I must consider the facts that would have been known, or available, to Karen and Jeffrey going to the circumstances of the making of each of the 2017 Wills before the proceedings were commenced. They knew:

  6. [38]

    Karen and Jeffrey had co-existing interests as executors and as the sole beneficiaries in each of the 2017 Wills. The proceedings had all the hallmarks of contentious, adversarial, proceedings, in which they sought to advance their claims in their own interests. To all intents and purposes, as between them and Steve and Cathie, it was hostile litigation.

  7. [39]

    The proceedings were commenced in April 2018, a little over one year after each of the 2017 Wills was executed. There was no evidence of what, if any, investigations were carried out by, or on behalf of Karen and Jeffrey in that period. However, shortly after each of the Wills was made, there were proceedings in the NSW Civil and Administrative Tribunal (Guardianship Division) (NCAT). On 1 May 2017, NCAT made financial management orders in respect of Ken and Irene, in which the affairs of each were committed to the management of the NSW Trustee and Guardian as the Tribunal found that each was incapable of managing his and her financial affairs, respectively: principal judgment at [151]. On 6 June 2017, NCAT made guardianship orders in respect of each of Ken and Irene: principal judgment at [152].

  8. [40]

    It was in July 2017 that Karen and Jeffrey returned to Thailand: principal judgment at [345].

  9. [41]

    In relation to events that followed the commencement of the case several matters are relevant:

  10. [42]

    Initially, even if there were some justification for them to investigate the assertions of dishonesty and the other criticisms made by Ken and/or Irene against Steve and Cathie, for Karen and Jeffrey, unequivocally, to accept those serious allegations, without more, demonstrates a risk they were prepared to take in regards to the costs of propounding each of the Wills made. Particularly, in light of Ken’s and Irene’s age, frailty, physical health issues, and the medical evidence provided to them before the Wills were even prepared, that confirmed what they had been told about each of Ken and Irene suffering dementia.

  11. [43]

    I have, of course, borne in mind that each of the 2017 Wills was signed by Ken and by Irene respectively and that the signature of each on the 2017 Will was duly attested. However, by the time each Will came to be propounded, it made provision for only Karen and Jeffrey and only they would benefit by successfully propounding each 2017 Will. They, or at least Jeffrey, had participated in the events leading to the execution of each Will. Their conduct did nothing to dispel the doubts about the capacity of each of Ken and Irene. I am not satisfied that their actions were caused by the conduct of Ken and Irene in creating uncertainty and confusion as to his, and her, testamentary intentions so as to instil in Karen and Jeffrey a bona fide belief that they had been left the whole of each estate.

  12. [44]

    Whilst each of the 2017 Wills could not be suppressed or ignored, and they must have been made known to the Court, with its ruling upon validity obtained, Karen and Jeffrey, as persons whose interests were affected, had the choice whether, and how vigorously, they would participate in the process of establishing the validity of each of them, in circumstances where there was no dispute about the validity of each of the 2015 Wills. Karen and Jeffrey commenced, vigorously participated in, and persisted with, the proceedings to establish the validity of each of the 2017 Wills to the very end. By shortly after the commencement of the hearing, if not well before, they would have been acutely aware of the risks as to costs that were being taken.

  13. [45]

    Looking at the whole of the evidence in the case and all of the circumstances, some of which I have mentioned above, but also remembering my findings of fact in the principal judgment, the case appears to me to be one that was conducted by Karen and Jeffrey in order to receive the whole estate of Ken and of Irene. As a matter of reality and substance, they were seeking to establish themselves as the sole beneficiaries of the estate of Ken and of Irene. For the reasons I have stated, I decline to make an order in the terms sought by Karen and Jeffrey.

  14. [46]

    Steve and Cathie successfully defended the two cases brought by Karen and Jeffrey. They also succeeded on their Cross-Claim in each proceeding (about which there was no relevant dispute once the issue of the validity of each of the 2017 Wills was determined).

  15. [47]

    I note, also, that neither party gave any evidence of attempts to resolve the proceedings.

  16. [48]

    In my view, the contest in each proceeding does not fall within the principles that would justify the payment of Karen and Jeffrey’s costs out of the estate of Ken or the estate of Irene. To the contrary, the proceeding, in respect of the 2017 Will of each of Ken and Irene, bring it within the principle of costs following the event. The Plaintiffs should pay the Defendants’ costs, calculated on the ordinary basis, of each proceeding.

  17. [49]

    Even though there were two proceedings, there should only be one set of costs. Steve and Cathie should receive their costs, calculated on the indemnity basis. It is in my view, appropriate that the costs of Steve and Cathie, to the extent that they are not recovered from the Plaintiffs, be shared equally, between the estate of Ken and the estate of Irene.

  18. [50]

    The Court in each proceeding:

Unofficial copy. Source: NSW Caselaw. Refer to the official version for authoritative text.