Long v Long; Estate of Ethel Edith Long (No 2) [2004] NSWSC 1114

New South Wales Supreme Court

CITATION : Long v Long; Estate of Ethel Edith Long (No 2) [2004] NSWSC 1114 HEARING DATE(S) : 21/10/04 Written submissions on costs: 10/11/04, 12/11/04 JUDGMENT DATE : 19 November 2004

JURISDICTION: Equity Division Probate List JUDGMENT OF : Barrett J DECISION : Applications for costs stand over

CATCHWORDS : PROCEDURE - costs - proceedings for rectification of will to correct error made by solicitor - whether estate should be indemnified by solicitors for costs CASES CITED : Re Hodges; Shorter v Hodges (1988) 14 NSWLR 698 Taylor v Haygarth; Estate of Haygarth (unreported NSWSC, Hodgson J, 7 October 1994 Ernest William George Long - Plaintiff PARTIES : Gregory Ernest Long and Averil Ethel White - First Defendants Miranda Jane Long, Penelope Catherine Long, Tamara Margaret Onus and Dale Keith White - Second Defendant FILE NUMBER(S) : SC 106102/03 COUNSEL : Mr J.R. Wilson SC - Plaintiff Ms P.R. Nash - Defendant SOLICITORS : Ebsworth & Ebsworth - Plaintiff Craddock Murray Neumann - Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION PROBATE LIST

BARRETT J

FRIDAY 19 NOVEMBER 2004

106102/03 – ERNEST WILLIAM GEORGE LONG v GREGORY ERNEST LONG & ORS; ESTATE OF ETHEL EDITH LONG (NO 2) JUDGMENT 1 On 29 October 2004, I made an order for the rectification of the will of Ethel Edith Long who died on 20 October 2001. The order was made under s.29A of the Wills Probate and Administration Act 1898 on the application of Mrs Long's husband. The making of the order was opposed by Mrs Long's daughter, one of the second defendants. For ease of reference, I shall call her simply "the defendant". 2 In accordance with directions made when judgment was delivered, written submissions have now been filed as to the costs orders the court should make. 3 The defendant's position is that her costs, assessed on the indemnity basis, should be paid out of the estate and that there should otherwise be no order as to costs. The plaintiff, in submissions filed under cover of a letter from his solicitors, submits that there should be no order as to the defendant's costs and that the plaintiff's solicitors (being the solicitors who prepared the will) should be ordered to indemnify the plaintiff in respect of his costs. 4 The case is one in which it was found that certain words had been omitted from the will through an error made by the solicitors who drew it. They, as I have said, are the solicitors who acted for the plaintiff upon the application for a rectifying order. The plaintiff's contention, in relation to costs, is that this error was obvious from the documentary evidence, in that, first, the form of an earlier will from which the will in question was adapted, being a form which also omitted the words in question, led to an effect and operation that were irrational and perverse; and, second, the solicitors' letter to the client enclosing the final form of what became the will in question showed that the solicitor who had prepared it thought that it had the effect that it would have had if the missing words had been included. The defendant says that, because the central question under s.29A goes to the testator's intentions and evidence was given by the plaintiff relevant to a determination of those intentions, it was both necessary and appropriate that the defendant act as contradictor and test the plaintiff's evidence. 5 It is the contention of the plaintiff that the thrust of the cross-examination of the plaintiff by counsel for the defendant (which sought to test whether the testatrix had intentions regarding the content of her will independent of the intentions of her husband) was questionable having regard to the presumption that flows from the execution by a testator of a will apparently valid on its face. Reference was made to the ninth of the principles stated by Powell J in Re Hodges; Shorter v Hodges (1988) 14 NSWLR 698, namely: "unless suspicion attaches to the document propounded, the testator's execution of it is sufficient evidence of his knowledge and approval ( Guardhouse v Blackburn (1866) LR 1 P&D 109)." 6 Hodges was a case in which testamentary capacity was questioned. In cases under s.29A, where a plaintiff undertakes the twofold task of proving that the testator's intentions were not as reflected in the will and that the rectified version for which the plaintiff contends reflects the testator's true intentions, I am not sure that the same principles apply, at least where there is, on the face of the will, suspicion that there has been a drafting error. A plaintiff who sets out on that course puts in issue immediately the proposition that the duly executed will, in the form executed, has received the knowledge and approval of the testator. Such a plaintiff cannot then fall back on the principle referred to by Powell J when some other interested party seeks to test the evidence upon which the plaintiff relies to show that the will does not embody the testator's true intentions. 7 According to the general rules in Part 52A rule 11 of the Supreme Court Rules, there would be an order for costs in favour of the plaintiff and against the defendant, the plaintiff having been successful in the face of opposition from the defendant. But neither party considers that to be the appropriate outcome and neither seeks such an order. They are unanimous in the view that there should be a departure from the general rule but at odds as to what the departure should be. 8 The defendant considers herself entitled to be indemnified for costs out of the estate on the basis that it was, in the final analysis, the testatrix who caused the litigation by making a will which, as has been found, did not reflect her true intentions. This, it is submitted, brings the matter within the first exception to the general rule stated by Powell J at p.709 in Hodges, so that the defendant's costs should be paid out of the estate on the indemnity basis. The plaintiff's position seems to be that the defendant's role in the litigation was sufficiently valuable to merit relief from any order that she pay the plaintiff's costs but not so valuable that she have her costs out of the estate on the indemnity basis. 9 I accept that, in an abstract sense, the litigation was caused by the testatrix, in that she failed to record her testamentary intentions correctly. I say "in an abstract sense" because the failure was in reality a failure of the solicitors to whom the testatrix entrusted the preparation of the will. On my findings, the testatrix thought the will was in the form it has assumed as a result of the rectification order and was confirmed in that belief by the letter from the solicitors which described the effect of the will as if it were in the rectified form. Unbeknown to the testatrix and the solicitor who prepared the will, it was not in the form that the letter, in lay language, represented it to be. 10 I am not persuaded that the defendant acted in an unreasonable way warranting her being deprived of indemnity costs out of the estate in accordance with the first exception referred to by Powell J. At the same time, I do not think that the estate should, in the final analysis, bear that burden. The submissions forwarded on behalf of the plaintiff with the covering letter from the solicitors acknowledge that the appropriate treatment of the plaintiff's own costs is that they not be a charge on the estate and should be borne by the solicitors themselves. The case cited in support of such an approach is Taylor v Haygarth; Estate of Haygarth (unreported NSWSC, Hodgson J, 7 October 1994). That was a case in which an executor sought rectification under s.29A. The executor was the solicitor who had drawn the will which, through faulty drafting, failed to reflect the testator's intentions. Persons potentially entitled upon intestacy were defendants and opposed rectification. The orders made by Hodgson J were that the solicitor (plaintiff) pay the defendants' costs on the indemnity basis and that he not be indemnified out of the estate for either those costs or his own costs. 11 That is, to my mind, the appropriate outcome here also. But, in contrast to the case before Hodgson J, the solicitors who drew the will in this case are not parties to the proceedings and, while they have, by forwarding the plaintiff's submissions, acknowledged that the court may order that they indemnify the plaintiff against the plaintiff's own costs (which is to their credit), they have had no opportunity to be heard on the proposition that they should be ordered to protect the estate against the consequences of an order that the defendant's costs, assessed on the indemnity basis, be paid out of the estate. 12 There is power under s.76 of the Supreme Court Act for the court to make such an order but it is obvious that it should not be made unless and until the solicitors have had an opportunity to make submissions. 13 I therefore propose to stand over the applications for costs orders to a date to be fixed and to direct that a copy of these reasons be forwarded to the plaintiff's solicitors with a letter from my Associate inviting them to make, within fourteen days, either written submissions on the proposition that they be ordered to indemnify the estate against indemnity costs awarded to the defendant or a written request that the proceedings be restored to the list for oral submissions. **********