New South Wales Supreme Court CITATION : Stanley v Mechler [2004] NSWSC 196 HEARING DATE(S) : 18/02/2004 JUDGMENT DATE : 24 March 2004 JURISDICTION: Probate JUDGMENT OF : Brownie AJ at 1 DECISION : The costs of the defendant, on a party and party basis, be paid out of the Estate of the deceased up until 23 January 2003, but not beyond that date. CATCHWORDS : Costs - The Calderbank principles may be applicable in probate proceedings. LEGISLATION CITED : Family Provision Act 1982 Wills, Probate and Administration Act 1898 CASES CITED : Calderbank v Calderbank (1975) 3 WLR 586; [1975] 1 All ER 333 PARTIES : Thomas Alexander Joseph STANLEY - Plaintiff Viola MECHLER - Defendant FILE NUMBER(S) : SC 115876/02 COUNSEL : J R Wilson SC - Plaintiff M S Willmott SC - Defendant SOLICITORS : The Argyle Partnership Lees & Givney IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION PROBATE LIST BROWNIE AJ WEDNESDAY, 24 MARCH, 2004 115876/02 Thomas Alexander Joseph STANLEY v Viola MECHLER JUDGMENT - Costs 1 HIS HONOUR: On 18 February 2004 I gave judgment, and invited submissions as to costs. After a brief discussion, I made orders as to costs. By notice of motion filed on 11 March 2004 the plaintiff sought a variation of those orders, and on that day I vacated the order for costs, in favour of the defendant, made on 18 February and heard debate as to what order should be made in respect of the defendant's costs. I now give a decision on that question, and take the opportunity to correct four errors in the reasons for judgment of 18 February. 2 First, in paragraph 3, I should have recorded that the present defendant's claim under the Family Provision Act has yet to be heard. It is the subject of separate proceedings. Secondly, in [17], 8th line, the word "had" has been mis-spelt. Thirdly, in [18], line 9, the sequence of words is incorrect. The sentence should read: "Ask Carolyn [Yarrington] if she could arrange to get witnesses". Fourthly, the last 9 words in the quotation at the end of [25] should be deleted – they represent a word processing duplication. The sentence should read: "I thought it was the best way to deal with it." 3 The plaintiff now seeks an order that the defendant pay the plaintiff's costs on and from 23 January 2003. On that day the plaintiff's solicitors wrote to the defendant's solicitors in these terms: "We refer to the conversation on 22 January 2003 between Lucille Lees and Gillian Edgar of our office in relation to progressing this matter. We understand that your client has recently sworn an affidavit (which is to be filed on the Probate application file with the Supreme Court of New South Wales) that, in effect, contests the present application for a grant of probate. As you may be aware, our client has previously attempted to resolve this dispute and avoid any unnecessary litigation, through discussions directly with your client and also when she was formerly represented by another solicitor. Our client remains willing to continue discussions to resolve the matter. In this regard, we enclose copies of correspondence (namely, our letters dated 109 July 2002, 1 August 2002 and 19 August 2002) sent to your client's former solicitors substantiating our client's continued efforts to resolve this matter amicably. We are now instructed to formally convey our client's proposal in a genuine attempt to resolve the matter and thus avoid incurring additional and heavy costs attributed to litigation. Without prejudice to our client's rights or admission of liability, our client makes the following settlement proposal. Conditional upon your client' agreement to co-operate in seeking an application for probate under s 18A of the Wills, Probate & Administration Act (the "Act"), our client proposes, that the named co-executors of the will administer the deceased's affairs, jointly, in a matter whereby your client receives an additional amount in the range of $20,000 to $30,000 in excess of her entitlements under the current will. Please promptly seek your client's instructions. Our client's offer will remain open for 30 days from the date of this letter. If a response is not received, we understand that this matter will inevitably be bought before the Court for determination. In the event this matter does proceed to litigation, we hereby place your client on notice that any costs incurred in undertaking such proceedings are in issue in accordance with the principles in Calderbank v Calderbank (1975) 3 WLR 586; [1975] 1 All ER 333. Our client will seek indemnity cost orders against your client for costs incurred by him or by the estate, if your client is successful in obtaining a grant under s 18A of the Act or, alternatively, if the older will is accepted to a grant and our client receives an additional amount from the estate as a result of a Family Provision Act claim. It is clear that in these circumstances, his actions were otherwise unnecessary and only conducted as a result of your client's actions or inactions." 4 The letter was marked: "Without prejudice, save as to costs." The letters of 19 July, 1 August and 19 August 2002, referred to in the body of the letter of 23 January 2003, are not in evidence. 5 The present application seems to me to raise an area of some doubt. On the one hand, although the letter of 23 January 2003 referred specifically to Calderbank v Calderbank, it did not explicitly and unmistakably make an offer to settle the entire litigation (i.e., the present case and the application or applications pending under the Family Provision Act). On the other hand, in a practical sense, it might be said that it did do this: It suggested that the application for a grant of probate of the informal will would succeed, and that whatever the fate of the Family Provision Act proceedings, the present defendant would not succeed except to the extent of, say, $20,000 or $30,000. The difficulty for the moment is that one cannot say what will be the fate of the proceedings under the Family Provision Act. 6 What has happened in relation to the present case has happened largely by reason of the conduct of the deceased himself. I do not say this critically of him. Rather, his conduct serves to explain the conduct of the defendant, and it is her conduct which should now be the focus of attention. On one view of the matter, she acted so as to attempt to give legal effect to a view that she reasonably held as to the deceased's actual intentions. On the other hand, she litigated the question whether s 18A of the Wills, Probate and Administration Act took effect, for reasons of self interest, and she prosecuted cross-claims that did not succeed. 7 The defendants submitted that the Calderbank principles did not apply in regard to litigation in the Probate List. Whatever might be said in relation to this proposition generally, the present litigation was restricted, in practical terms, to the actual division of the assets of the estate between the plaintiff and the defendant, and I see no reason, either in principle or by reference to authority, why the Calderbank principles should not apply. The difficulty in making a decision as to costs arises from the terms of the letter of 23 January 2003, and the application of the terms of that letter to the facts of the case. 8 The defendant pointed out that a good deal of the evidence upon which the plaintiff ultimately relied was not filed until after 23 January 2003. This is correct, but the defendant chose to dispute this evidence, and the defendant failed on these points. 9 I conclude that the proper result is that there should be an order that the costs of the defendant, on a party and party basis, be paid out of the estate of the deceased up until 23 January 2003, but not beyond that date. I make an order in those terms. *********************** Last Modified: 03/26/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.