Johnson v Krishnan [2008] NSWSC 665

New South Wales Supreme Court

CITATION : Johnson v Krishnan [2008] NSWSC 665

HEARING DATE(S) : 30 June 2008

JUDGMENT DATE : 30 June 2008

JURISDICTION : Equity Division Probate List

JUDGMENT OF : Palmer J

EX TEMPORE JUDGMENT DATE : 30 June 2008

DECISION : Leave to discontinue granted; all parties to have costs out of estate.

CATCHWORDS : COSTS – DISCONTINUANCE – Whether circumstances of case justified departure from ordinary rule that discontinuing party must pay opponent's costs.

CATEGORY : Procedural and other rulings

PARTIES : Rejina Johnson (Plaintiff/Cross Defendant) Vincent Surend Krishnan (Defendant/Cross Claimant)

FILE NUMBER(S) : SC 102506/06

COUNSEL : M.K. Rollinson (Plaintiff/Cross Defendant) P. O'Brien (Sol) (Defendant/Cross Claimant)

SOLICITORS : Worthington Williams (Plaintiff/Cross Defendant) Harris & Co (Defendant/Cross Claimant)

LOWER COURT JURISDICTION : Compensation Court

102506/06 Estate of Parvati Krishnan: Johnson v Krishnan

JUDGMENT – Ex tempore 30 June, 2008

1 This is a dispute as to the terms upon which the Defendant should have leave to discontinue his Cross Claim. The Plaintiff says that the Defendant should have leave only on terms that he pay the Plaintiff's costs of the suit. The Defendant says that both his and the Plaintiff's costs of the suit should come out of the estate which gave rise to the proceedings. 2 The facts are very unusual. As the proceedings concern the members of a family, I will, for the sake of brevity and without intending any disrespect, refer to the parties by their first names. 3 The Plaintiff ("Regina"), is one of the eight surviving children of Parvati Krishnan who died domiciled in New South Wales on 4 July 2003. Parvati left a will dated 26 November 1993 whereby she appointed Regina as executor. I will call this the First Will. The First Will was granted probate on 20 May 2005. The Defendant ("Vincent") claimed that Parvati had made a Second Will dated 25 January 2002 under which he was appointed executor. I will call this the Second Will. 4 Under the First Will, Parvati's estate was divided equally amongst her eight surviving children. Under the Second Will two of the children received no share, their share being given to another child, Edward, who received a three-eighths share of the estate. Vincent received a one-eighth share of the estate under both wills. 5 Because Vincent was in possession of a purported will made after the First Will, of which probate had already been granted, Regina, through her solicitors, required him to commence proceedings for revocation of the grant of probate of the First Will and to prove the Second Will. 6 There was some delay on the part of Vincent in doing so. Accordingly Regina commenced these proceedings by way of Summons in February 2006, in which she sought an order that Vincent file a Statement of Claim seeking probate of the Second Will. In addition, she sought that an account be taken of the dealings of Vincent with the estate of his mother and with the estate of his brother, Eric. Eric had been domiciled in British Columbia at the date of his death. He pre-deceased Parvati. As Eric was unmarried and died intestate his estate, comprising some apartments, passed to Parvati and his father, if his father survived him. It is not presently known whether the parties' father is still living. 7 In response to Regina's Summons on 5 June 2006, Vincent filed a Cross Claim in these proceedings in which he sought a grant to him of probate of the Second Will and a consequent revocation of the grant of probate of the First Will. 8 In a Defence to the Cross Claim filed on 13 June 2006, Regina denied that the Second Will was the will of Parvati, said that the purported signature of Parvati on the will was not her signature and said that, in any event, Parvati did not know and approve of the contents of the Second Will. 9 Both sides prepared affidavit evidence. Regina's solicitors procured a report from a forensic document examiner which was provided to Vincent's solicitors in early 2006. That report strongly suggested that the signature of Parvati on the will was a forgery. 10 Affidavits from seven other deponents, including Regina, were obtained. Amongst them was an affidavit from Edward dated 5 July 2006 in which he expressed surprise at the existence of the Second Will and that his mother would have wished to change the provisions of the First Will. 11 In response, Vincent swore an affidavit in May 2006 and his solicitors procured affidavits from six other witnesses, two of whom swore that they had witnessed Parvati's signature on the Second Will and that she had understood its contents. 12 On 12 December 2007, this matter was fixed for trial to commence on 30 June 2008 for seven days. On 6 May 2008 at pre-trial directions I was informed that the parties were engaged in settlement discussions. By consent, I referred the matter to mediation. The mediation was unsuccessful. 13 Shortly before the trial was due to commence, Vincent's solicitor advised my Associate that Vincent would seek leave to discontinue the Cross Claim, which would effectively bring the whole proceedings to an end, and that the only question for debate was costs. 14 Mr Rollinson of Counsel, who appears for Regina, says that by virtue of UCPR 42.19(2), Vincent, as the party discontinuing a claim for substantial relief, must pay Regina's costs of the suit, "unless the Court orders otherwise" and Vincent has not demonstrated any ground for departing from the usual course. 15 Mr O'Brien, solicitor, who appears for Vincent, says that the facts of the case and, in particular, the somewhat strange circumstances in which Vincent seeks discontinuance, justify not only a departure from the usual costs rule on discontinuance but, indeed, warrant an order that Vincent's costs be paid out of Parvati's estate. The facts upon which Mr O'Brien relies are as follows. 16 During 2007 the parties had been endeavouring to negotiate a settlement under which either all beneficiaries other than Vincent bought out Vincent's share of the estate or else Vincent bought out the shares of the other beneficiaries. 17 There was a difficulty in that, while Vincent believed that his father might still be living in India, the other beneficiaries believed that their father was dead. If the father was living, he was entitled to a half share of Eric's estate and Parvati's estate would be diminished accordingly. Regina's solicitors were purporting to act for all beneficiaries other than Vincent in these negotiations. It is significant that they purported to act for Edward who was the principal beneficiary under the Second Will. 18 On 12 June 2007 Vincent's solicitor wrote to Regina's solicitors making a certain offer to buy out the shares of the other beneficiaries in the estate. However, they said: "Please clarify whether you act for all of the other beneficiaries. If not your client should indemnify our client against any claims to be made by them. In any event there should be a general indemnity given by your client(s). … If you are not acting for all beneficiaries, your client must indemnify our client against any claim to be made by any such beneficiaries."