Martin v Matthews

1. [1]

   HIS HONOUR: These reasons relate to the estate of Edwin Corbett York, (the deceased), who died on 31 August 2020, aged 82. They follow the hearing of a notice of motion, on 12 August 2021, to have a probate caveat cease to be in force. As that order was not made, the Court made an order dismissing the notice of motion, an order that the matter proceed by pleadings, and gave directions as appeared best for the just, quick and cheap determination of proceedings. These are the reasons for the making of the substantive orders.

2. [2]

   The deceased left a duly executed Will made on 27 April 2020. I shall refer to this Will as the 2020 Will without any prejudgment as to its validity. The original of the 2020 Will was delivered to the Court pursuant to directions made on 5 July 2021 and remains on the Court file.

3. [3]

   There are said to be other earlier Wills, and a codicil, made by the deceased, to which reference will be made later in these reasons. The validity of each is not the subject of dispute, other than each was said to have been revoked by a later Will.

4. [4]

   On 20 November 2020, Gregory John Martin (Mr G Martin) and Liam John Martin (Mr L Martin), to whom I shall refer, together, as the Plaintiffs, filed a Summons for probate, in which they sought probate of the 2020 Will. Notice of their application had been published on the New South Wales on-line registry website on 8 October 2020.

5. [5]

   Relevantly, the 2020 Will revoked all wills and testamentary instruments previously made (Clause 1); appointed the Plaintiffs as executors (Clause 2); made a gift of a motor vehicle to a person not a party to the proceedings (Clause 3); and then left the whole of the deceased’s residuary estate to the Plaintiffs “jointly in equal shares” (Clause 4).

6. [6]

   In the Affidavit of Executors affirmed on 17 November 2020, the Plaintiffs affirmed “We are not aware of any circumstances which raise doubt as to our entitlement to a grant of probate of the will of the deceased”.

7. [7]

   The deceased left property, most of which is in New South Wales. The Plaintiffs estimated the estate to have a total value of about $12.2 million. It is a large estate.

8. [8]

   On 18 November 2020, Conrad Ian Martens (Mr Martens) and Scott James Matthews (Mr Matthews), to whom I shall refer, together, as the Defendants, lodged a caveat. The caveat was one that may be described as a “general caveat”. It is the appropriate form of caveat to raise a ground of invalidity of a will or codicil, other than because of a want of due execution. A general caveat is one filed under Supreme Court Rules 1970 (NSW) Part 78 rule 66: Kyros v Stavrakis [2009] NSWSC 163 at [12] (White J).

9. [9]

   A fresh caveat, in the same terms, was filed by the Defendants on 17 May 2021. In this caveat, they asserted that whilst they were not beneficiaries named in the 2020 Will, they were devisees of real estate, situated at Whale Beach Road, Whale Beach, New South Wales (“the Whale Beach property”), in the penultimate Will, made by the deceased, on 22 July 2009. I shall refer to this Will as the 2009 Will.

10. [10]

    In the 2009 Will, the Plaintiffs were named as the instituted executors.

11. [11]

    For probate purposes, and in a legal sense, each of the parties to these proceedings is a “stranger” to the deceased, that is to say, is not a blood relation of the deceased, or a person who is entitled to make a claim either in intestacy or under the will: Nolan v Nolan & Ors [2004] VSCA 109 at [74] (Ormiston JA).

12. [12]

    Mr Trevor Butt, the Plaintiffs’ solicitor, who had prepared the original of that Will, deposed, in an affidavit read at the hearing of the notice of motion, that the 2009 Will was destroyed, at his office, after the 2020 Will was made. However, a signed copy of that Will is available.

13. [13]

    The Defendants wish to propound the 2009 Will. However, during the hearing of the notice of motion, it became clear that the Plaintiffs, as executors named therein, in the alternative to the claim for probate in solemn form of the 2020 Will, if they wished to, should propound a copy of the 2009 Will. They agreed to this course.

14. [14]

    The deceased had made an even earlier Will, in September 1992, with a codicil to that Will made on 6 November 1998. In view of there being no dispute about the validity of the 2009 Will, it is unnecessary to refer further to the 1992 Will and the 1998 Codicil. All that is required to be said about that Will is that Mr Martens was a devisee of the Whale Beach property.

The current dispute

1. [15]

   Faced with the caveat, the Plaintiffs could have waited for the caveat to lapse and, as long as the Defendants did not file a new caveat, or seek to extend the existing caveat, (a caveat lapses after 6 months), the grant could be made without Court proceedings. Similarly, the Defendants may have withdrawn the caveat as a result of negotiation between the parties.

2. [16]

   However, as the Plaintiffs must have considered that the Defendants did not have a legitimate interest, or that there was no doubt whether the grant of probate should be made, they filed a notice of motion to have the caveat cease to be in force pursuant to SCR Pt 78 r 71.

3. [17]

   The Plaintiffs filed the notice of motion on 25 May 2021. As well as seeking an order that the caveat cease to be in force, they sought an order for their costs.

4. [18]

   (Prior to the hearing of the notice of motion, it had been agreed that the notice of motion, as filed, referred to the earlier caveat that had been lodged by the Defendants, which had remained in force for 6 months. Without objection, at the hearing, the notice of motion was amended to insert the date of the second caveat, being 17 May 2021, in lieu of the date of the first caveat, as that was the caveat which had not lapsed.)

5. [19]

   In support of their notice of motion, the Plaintiffs, initially, relied upon an affidavit of Mr Butt, who annexed to his first affidavit affirmed on 25 May 2021, a copy of two letters from him to the solicitors for the Defendants requesting the removal of the caveat.

6. [20]

   The notice of motion was first returnable in the Succession List on 2 June 2021. On that date, both parties were represented by counsel.

7. [21]

   Despite the longstanding practice of the Court that, on the first return date of such a notice of motion, the caveator is expected to have available, and ready to be tendered, evidence "to show … in broad terms, that he had an interest to support the caveat and that he had a prima facie case of a ground of invalidity upon which he relied" (Nobarani v Mariconte (2018) 265 CLR 236 at [45]; [2018] HCA 36), and that in default of having such evidence available, the Court may have ordered that the caveat cease to be in force with the costs of the application being paid by the caveator (Azzopardi v Smart (1992) 27 NSWLR 232 at 238 (Powell J); D'Apice v Farrell (Supreme Court (NSW), Powell J, 15 May 1992, unrep)), the Defendants did not have available any such evidence.

8. [22]

   Without objection, the Court made directions for them to file and serve any affidavit material on which they intended to rely in opposition to the relief sought by the Plaintiffs in their notice of motion. The costs of the directions hearing were, however, reserved.

9. [23]

   (Despite, in this case, directions having been made for the Defendants’ evidence to be filed and served, it must be emphasised that a caveator should take steps, both before, and after, the lodgement of a caveat, to gather the necessary evidence to demonstrate, in broad terms, that he, or she, has an interest to support the caveat and facts raising a doubt, upon which reliance is to be placed. It should not be thought that there is an entitlement, on the first return date, to an adjournment to enable the caveator to gather, or file and serve, that evidence.)

10. [24]

    The Defendants complied with the directions and each made an affidavit on 21 June 2021. Their solicitor, Steven John Grant, also made an affidavit, sworn on 18 June 2021 upon which the Defendants relied.

11. [25]

    The matter was next listed on 5 July 2021 when a direction was made for Mr Butt, who by now, was known to have taken instructions for, and who prepared, the 2020 Will, to make an affidavit setting out the circumstances in which the 2020 Will was prepared, drafted, and executed. The direction was complied with and Mr Butt made an affidavit on 16 July 2021. This affidavit was relied upon in support of the notice of motion.

12. [26]

    Other than reading the Affidavit of Executors affirmed by the Plaintiffs on 17 November 2020, to which reference has been made, neither of the Plaintiffs made an affidavit that was read in support of the notice of motion.

13. [27]

    On 9 August 2021, the notice of motion was listed for hearing on 12 August 2021 as a matter of less than 3 hours duration. It proceeded on that date and was completed within that time. None of the deponents were cross-examined. At the hearing, Mr A Connolly of counsel again appeared for the Plaintiffs. Mr J E Armfield, counsel, again appeared for the Defendants.

14. [28]

    Mr Connolly made oral submissions, but Mr Armfield had prepared, and served, written submissions to which he briefly spoke.

Some matters regarding caveats

1. [29]

   Section 144(1) of the Probate and Administration Act 1898 (NSW) provides that any person may lodge in the registry of the Court a caveat against any application for probate or administration, or for the sealing of any probate or letters of administration under Division 5, at any time previous to such probate or administration being granted, or to the sealing of any such probate or letters of administration. In fact, “any person” means any person with an “interest”, as probate litigation is “interest” litigation: Poulos v Pellicer In the Estate of Culina [2004] NSWSC 504 at [10] (Windeyer J).

2. [30]

   It should be remembered that "a caveat is not a notice to any opponent in particular. The caveat does not commence any litigation. It is a notice to the registrar or officer of the Court not to let anything be done by anybody in the matter of the will, or the goods, of the deceased, without notice to the person who lodges the caveat. It is not looked at as commencing any litigation — it merely requests the registrar to tell the caveator if anybody stirs in this matter”: Moran v Place [1896] P 214 at 216 (Lindley LJ); In re Emery, Deceased; Emery v Emery [1923] P 184 at 187-188 (Sir Henry Duke P); Re Estates Brooker-Pain and Soulos [2019] NSWSC 671 at [60(5)] (Lindsay J).

3. [31]

   If the caveator is aware that any other person is making, or is intending to make, an application for the grant of probate or administration, in respect of the same estate, the caveator must, within 7 days after filing the caveat, serve a copy of the caveat on that other person.

4. [32]

   In The Estate of Robyn Alice May Linworth [2021] NSWSC 334, relevantly, at [25] – [32] and [37] – [57], I dealt with the principles relating to caveats. I wrote:

5. [33]

   In Estate of Theresa Katalinic; Vea & Katalinic v Katalinic [2020] NSWSC 805 I had written, at [70]:

6. [34]

   There may be a case for investigation even if all the facts are not yet known or alleged, but there is enough to base a decision to have the matter proceed to trial. As was put by the High Court in Nobarani v Mariconte at [45], “far less preparation is required for a caveat hearing than is required for the ultimate trial” and that it is reasonable to proceed “towards the caveat hearing without completing all of the preparation that would be required for trial”.

Background Facts

1. [35]

   I have taken the following facts from the affidavits as I consider that there is unlikely to be any substantial dispute about them:

The facts relied upon by the Plaintiffs

1. [36]

   Although he was not cross-examined, I shall refer to the affidavit of Mr Butt, sworn 16 July 2021, in which the following facts, so far as are relevant, are asserted. In setting these out, I treat what is set out as evidence that has not been tested:

2. [37]

   Although not specifically stated, the 2020 Will is a duly executed Will, having been executed by the deceased, and his signature witnessed by two witnesses, one of whom was the solicitor, Mr Butt. Accordingly, the Plaintiffs have the benefit of the presumption that the deceased had testamentary capacity and knew and approved of its contents.

The facts relied upon by the Defendants

1. [38]

   The Defendants pointed to the following evidence. Again, none of the deponents was cross-examined and I treat what is set out as evidence that has not been tested:

Determination

1. [39]

   At the risk of repetition, I note that the 2020 Will is the last testamentary document executed by the deceased. I note, also, that there is no dispute about the validity of the 2009 Will (other than its revocation by the 2020 Will).

2. [40]

   Even if the case presented by the Plaintiffs, with the evidence of Mr Butt, solicitor, at its heart, were regarded as strong, a grant of probate in solemn form is not inevitable. Reading all of the evidence, which has not yet been tested, and which is clearly incomplete on both sides, and hearing the submissions, result in me being satisfied that there is a doubt which warrants investigation going to the validity of the 2020 Will on the basis of a lack of testamentary capacity and a lack of knowledge and approval.

3. [41]

   In particular, I note:

4. [42]

   In the circumstances, I am satisfied that the matter should proceed to a hearing. However, I wish to make it clear, as I did during the hearing of the notice of motion, that the matters referred to above which in my view require investigation, should not lead the Defendants to be unduly optimistic about their ultimate prospects of success. Nor should they think that they will, necessarily, be entitled to their costs out of the estate even if they lose the substantive case.

5. [43]

   As I endeavoured to do at, and before, the hearing, I stressed that the practice of the Court in a case seeking a caveat cease to be in force is not to decide the ultimate issue as to the validity of the disputed will. Naturally, I have not undertaken such an exercise, and being satisfied that a doubt exists should not be taken to imply any judgment as to how any doubt is likely to be resolved at a final hearing. The Court is simply satisfied, based upon the current state of the untested evidence, that the Defendants have established that there are matters that should be investigated. The Court has not formed, and could not form, any view of either party’s ultimate prospects of success.

6. [44]

   It was also necessary for me to deal with the costs of the notice of motion. As earlier stated, the Plaintiffs, in the notice of motion, sought an order for costs. As a result of the matter proceeding in the way that it has, the administration of the estate has been delayed and costs have been incurred.

7. [45]

   In my view, the Plaintiffs did not make a realistic assessment of the Defendants’ case on the issue to be decided at the hearing of the notice of motion. During an early directions hearing, I referred counsel, perhaps presumptuously, to my decisions In Estate of Theresa Katalinic; Vea & Katalinic v Katalinic and in The Estate of Robyn Alice May Linworth, and reminded them of what was required to be determined by the Court on the notice of motion.

8. [46]

   Even during the hearing, I repeated, several times, the matters previously raised on the issue. The Plaintiffs, by counsel, persisted with arguments, which it seemed to me, went to the ultimate merits, rather than focussing on whether the Defendants’ evidence, if true, called for further investigation.

9. [47]

   It seems to me, depending upon the facts of the particular case, that, a person who files a caveat before making full enquiries has to make up his, or her, mind when he, or she, is doing so, that he will pay the costs of the caveat if he is not in a position to carry it further when an application is made for an order absolute, or if he, or she is otherwise unsuccessful. Similarly, a party who brings, and persists, with a notice of motion seeking to have a caveat cease to be in force, without considering, realistically, whether, on the evidence advanced by the caveator, a doubt exists, should also be prepared to pay any costs occasioned by that notice of motion should he, or she, be unsuccessful.

10. [48]

    In exercising the discretion on costs, and remembering that the successful party has a “reasonable expectation” of being awarded costs against an unsuccessful party, there is the underlying proposition that costs should be paid in a way that is fair, having regard to what the Court considers to be the responsibility of each party for the incurring of the costs.

11. [49]

    In the circumstances, I formed the view that as the determination of the notice of motion is a separate issue, which they have lost, the Plaintiffs, personally, should bear the Defendants’ costs of the notice of motion. The costs of the hearing of the notice of motion would not have needed to be incurred if the Plaintiffs, following receipt of the Defendants’ evidence, had consented to the matter proceeding by way of pleadings.

12. [50]

    At least some of the work that has been done by, or on behalf of, the parties, pursuant to the directions of the Court, will be relevant to, and, no doubt will be relied upon in determining, the question of the validity of the 2020 Will. This may reduce the quantum of costs that should be paid by the Plaintiffs, but that will be a matter for assessment, or agreement, in due course.

13. [51]

    Being satisfied that the caveators have an interest in the deceased’s estate and that there is doubt as to whether the grant of probate should be made of the deceased’s 2020 Will, the Court does not order that the caveat cease to be in force.

14. [52]

    The orders made at the conclusion of the hearing were:

    1. (1)

       Orders that the matter proceed by way of pleadings.

    2. (2)

       Orders that the Plaintiffs file and serve a Statement of Claim by 4:00 p.m. on Friday, 27 August 2021.

    3. (3)

       Orders the Defendants to file and serve any Defence and Cross-Claim by 4:00 p.m. on 10 September 2021.

    4. (4)

       Orders the Plaintiffs to file and serve any Defence to the Cross-Claim by 4:00 p.m. on 17 September 2021.

    5. (5)

       Directs the Plaintiffs to file and serve any further lay evidence in chief upon which it is intended to rely or in reply to affidavits served prior to 12 August 2021 by 4:00 p.m. on 10 September 2021.

    6. (6)

       Directs the Defendants to file and serve any further lay evidence in chief or in reply to affidavits served prior to 12 August 2021 by 4:00 p.m. on 10 September 2021.

    7. (7)

       Directs each party to file and serve any lay evidence in reply to affidavits served after 12 August 2021 by 4:00 p.m. on 24 September 2021.

    8. (8)

       Directs that:

    9. (9)

       Directs in the event that documents are produced, and the subpoenas Registrar is informed, in writing signed by the legal representative of each of the parties, that the lay evidence is complete and that there is no objection to general access being granted, that the parties have general access to the documents produced on subpoena.

    10. (10)

        Orders that the matter be referred to private mediation.

    11. (11)

        Appoints 7 October 2021 before Mr C F Hodgson as the date for the mediation.

    12. (12)

        Directs that in the event that an in-person mediation is unable to occur on that date, the mediation is to proceed remotely with the parties to appear by Skype, other form of video-conferencing, by telephone or as otherwise agreed.

    13. (13)

        Directs, in the event that the matter is resolved, that any original affidavits required to be read and not already filed, together with original signed Consent Orders in hard and soft copy reflecting the resolution of the proceedings, together with the settlement checklist and index of affidavits to be read, be delivered to the Chambers of the Succession List Judge by 4:00 p.m. on 13 October 2021.

    14. (14)

        Orders that the costs of the mediator and mediation room, initially be paid out of the estate of the deceased, with liberty to any party to seek an order for such costs to be paid otherwise.

    15. (15)

        Orders that the notice of motion filed 25 May 2021 (as amended) be dismissed.

    16. (16)

        Orders that the Applicants on the notice of motion (the Plaintiffs) pay the costs, personally, of the notice of motion.

    17. (17)

        Stands the matter over for further directions before the Succession List Judge on Monday, 18 October 2021.