PERT v NORRIS-SMITH & ANOR [2008] NSWSC 57

New South Wales Supreme Court

CITATION : PERT v NORRIS-SMITH & ANOR [2008] NSWSC 57

HEARING DATE(S) : 26, 27 & 28/11/2007

JUDGMENT DATE : 18 February 2008

JUDGMENT OF : Bryson AJ at 1

DECISION : The plaintiff's application for an order for her costs out of the estate is dismissed.

CATCHWORDS : Costs - in [2007] NSWSC 1427 - Family Provision application by de facto failed - Court refused to order plaintiff to pay costs - plaintiff applied for order for costs out of estate under FPAct s.33(1) - application refused on discretionary considerations.

LEGISLATION CITED : Family Provision Act 1982, s 33

CASES CITED : Singer v Berghouse (1993) 114 ALR 521

Helen Mary Pert - Plaintiff PARTIES : Penelope Anne Rhoades (previously Norris-Smith) - First Defendant Cassandra Jane Herbert - Second Defendant

FILE NUMBER(S) : SC 4551/2004

COUNSEL : Ms A. Cotter-Moroz - Plaintiff Mr C. Harris SC - Defendants

SOLICITORS : G.A. Guthrie (Woolgoolga) - Plaintiff Clinch Neville Long - Defendants

LOWER COURT DATE OF DECISION : 11/12/2007

LOWER COURT MEDIUM NEUTRAL CITATION : [2007] NSWSC 1427

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BRYSON AJ

18 February 2008

4551/2004 PERT v NORRIS-SMITH & ANOR JUDGMENT 1 HIS HONOUR: These reasons relate to the application made orally by the plaintiff's counsel for an order that her costs be paid out of the estate, and that they be paid on the indemnity basis. In my judgment [2007] NSWSC 1427 on 11 December 2007 I dismissed the plaintiff's Summons, and decided that no provision additional to that made in the testator's will should be ordered for the plaintiff. Counsel for the defendants then asked me to make an order that the defendants' costs be paid by the plaintiff. Such an order would be the ordinary course in the application of UCPR 42.1 but as that rule shows the Court has a discretion to act otherwise, and for reasons stated on that day I decided not to make a costs order against the plaintiff. There have been earlier instances where the Court has declined to make costs orders against unsuccessful claimants, particularly widows and persons in similar situations, and it was recognized by Gaudron J in an interlocutory judgment in Singer v Berghouse (1993) 114 ALR 521 at 522 that cases like these do not always follow the usual course now indicated by UCPR 42.1. I had regard among other things to the plaintiff's resources, which although adequate to her needs are limited. The greater part of the estate passed under the will to the testator's daughters who are, generally, in better economic circumstances than the plaintiff; their circumstances differ among themselves. The testator did no more than conform with his moral duty in making provision for them. 2 The plaintiff's application now is an application for an order that the costs of the proceedings on the indemnity basis be paid out of the estate of the testator. The plaintiff was altogether unsuccessful in the litigation, and it would plainly be wrong, if confined to acting within the limits of UCPR 42.1, to make a costs order against the defendant executrices. The plaintiff relies however on a different basis in s 33 of the Family Provision Act which deals with payment of costs not by opposing parties but out of the estate. I set out ss 33(1) and (3). 33(1) Except as provided in subsections (2) and (3), the Court may order that the costs, charges and expenses of or incidental to proceedings under this Act in relation to the estate or notional estate of a deceased person be paid out of the estate or notional estate, or both, in such manner as the Court thinks fit. (3) The Court shall not order that the whole or any part of the costs, charges and expenses of or incidental to proceedings in respect of an application in relation to a deceased person made by an eligible person be paid out of the estate or notional estate of the deceased person by reason only of the fact that the eligible person is a person described in paragraph (a) or (b) of the definition of "eligible person" in section 6(1) or the fact that the Court has made an order for provision in favour of the eligible person on the application. 3 Subsection 33(2) does not relate to the plaintiff's circumstances. The plaintiff is an eligible person under s 6(1)(a) and subs. 33(3) shows that that of itself is not a sufficient ground upon which to order her costs out of the estate. The legal power granted to the Court by s 33(1) is very wide, but it is discretionary, and should only be exercised where there is some sound positive ground or good reason, relevant to the purposes for which s 33(1) was enacted, for requiring payment of costs, charges and expenses of a party out of the estate, to the disadvantage of the persons otherwise entitled to the residue. 4 It is not unusual in Equity business relating to deceased estates, particularly applications for probate, that there are circumstances which lead the Court to order payment out of the estate of the costs of an unsuccessful party. It sometimes happens that conduct of the testator, or doubts or uncertainties created or left unresolved by the testator make litigation a necessary or reasonable step for establishing the rights of parties so as to enable administration to proceed on a proper basis. Recurringly there are instances where the testator made a will or purported will in circumstances which raise doubt about its effectiveness, or in terms which call for judicial interpretation. In the present case there are no analogous circumstances. The testator made provisions which were altogether clear and, as I earlier determined, adequate to the plaintiff's needs, and he explained his reasons in documents which were expressed moderately and stated reasons which were not shown to be inaccurate or unduly influenced by personal feelings. The testator made dispositions which were careful and just. The plaintiff's claim was principally based on a wrong view by her of her needs and circumstances. There is in my opinion no analogy with cases where the testator is treated as having made some contribution to the need for litigation. 5 In support of the exercise of discretion the plaintiff's counsel has referred to a number of circumstances of the plaintiff, her tutor and her litigation, which do not in any respect involve impeachment of any action of the testator, the defendants or the residuary beneficiaries. The matters put forward revolve around the plaintiff's disability; I found to the effect that she has a disability with respect to understanding her affairs and situation and that it was altogether appropriate for her to be represented (as she was) by a tutor. The plaintiff's counsel pointed to the need for her to be represented by a tutor, and to the duties which fall upon the tutor to act as if a trustee in the conduct of the litigation, so as to bring out her case fully. Submissions outlined the difficulties confronting the tutor responsible for the interests and affairs of a litigant who cannot be responsible for them herself; the difficulties of the tutor include the unavailability of reliable prediction of the outcome of the case. I summarise the submissions by saying that they were to the effect that having regard to the evidence available to the tutor, it was reasonable to bring the proceedings and obtain the Court's adjudication. 6 If the plaintiff was to make a claim, it was necessary that there be a tutor and that the tutor attend fully to the preparation of the case and the adduction of the evidence. However I do not see this as a circumstance which would make it just that the executrices or the residuary beneficiaries, who had a completely good case supported by the merits when the facts were found, should bear the burden of the plaintiff's unsuccessful claim. I see no ground on which it could be said that the tutor acted unreasonably, but the position plainly is that when fully examined, the plaintiff's case did not establish that she had been left without adequate provision, and she failed for that reason. Cases referred to by counsel in which a tutor for infants has been indemnified out of the assets of infants do not assist me where the claim is that the tutor should in effect recover costs from other persons. The situation of the plaintiff is a hard one, made more so by litigation which according to my decision it was unnecessary for her to bring. However the circumstances do not in my opinion make it just or otherwise appropriate, under s 33(1), to make an order imposing the burden of her costs upon the defendants or the residuary beneficiaries. They have already been significantly disadvantaged by having to bear their own costs of the litigation; it would not in my judgment be just to add to this. 7