Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Pinniger v Stone & Anor [2012] NSWCA 73 Hearing dates: 21 March 2012 Decision date: 21 March 2012 Before: Beazley JA Whealy JA Decision: Leave to appeal refused, with costs. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: LEAVE TO APPEAL - Application for grant of probate in solemn form of testator's will - challenge by executor - proper basis for ordering indemnity costs against unsuccessful executor - whether there was a miscarriage of the discretion to grant cost orders - House v R - leave to appeal refused. Cases Cited: - House v R [1936] HCA 40; 55 CLR 499 Category: Procedural and other rulings Parties: Wayne Jon Pinniger (Applicant) Karen Patricia Stone (First Respondent) Kerry Ann Drabsch (Second Respondent) Representation: Counsel: L. Ellison SC, K. Morrissey (Applicant) Ms J.M. Sandford (Respondent) Solicitors: Coode & Corry (Applicant) Matthews Williams Solicitors (Respondents) File Number(s): 2009/291134 Decision under appeal Citation: [2011] NSWSC 1148 Date of Decision: 2011-09-27 00:00:00 Before: Nicholas J File Number(s): 2009/291134 Judgment 1WHEALY JA - Ex tempore - on leave application: The proceedings in the Equity Division were an application by two executors for a grant in solemn form of the testator's will. The defendant was the third executor who maintained a cross-claim asserting that a document which had been prepared by the testator formed an alteration to or a partial revocation of the will. The defendant, who was the applicant in this matter, sought an order that probate of the will and part of the document to which I have made reference be granted to the three executors. 2These proceedings were heard before Nicholas J. On 29 July his Honour dismissed the amended cross-claim and ordered that there be a grant to the two plaintiffs of probate in solemn form of the will of the testator, which had been made on 2 May 2008. His Honour found that at all times the testator had well understood the distinction between his personal property and the assets owned by the two companies mentioned in the document. He had well understood, his Honour found, that the latter assets were not his to dispose of by will. Finally, his Honour found that the document amounted to a confirmation by the testator of his will. His testamentary intentions, accordingly, for the disposition of his personal estate, remained as stated in the will. 3His Honour reserved the issue of costs. That issue was taken up in a further hearing on 17 August 2011. On 27 September 2011 his Honour made the following orders: "(1) the defendant cross-claimant pay the plaintiff's cross-defendant's costs of the proceedings up to and including 31 August 2010 on the ordinary basis and thereafter on an indemnity basis; (2) to the extent the plaintiff's cross-defendant's costs are not wholly reimbursed by order 1, such costs on an indemnity basis to be paid out of the estate of the testator." I should say something briefly about his Honour's reasons. 4His Honour identified that whether some special costs order should be made in favour of the applicant was to be determined on the basis of whether there were circumstances which had afforded reasonable grounds for his opposition to the grant of probate, and for his maintenance of his claim that the document to which I have made earlier reference was of testamentary effect. His Honour first rejected the submission that the testator had caused the litigation. Secondly, in his Honour's view, Mr Buckley, the solicitor for the testator, had explained to the executors at a meeting the circumstances of the execution of the will and the making of the subsequent document. This was, in his Honour's view, an adequate explanation of the true situation. 5The information that the trust assets were not part of the estate had been confirmed in subsequent correspondence. The primary judge held that the cross-claimant's opposition to the grant of probate and his claim under the cross-claim were maintained essentially in furtherance of his personal interest to establish himself as a beneficiary. His Honour said: "Accordingly, I am unpersuaded that either the first or second exception to the ordinary rule on costs should apply. In the result the cross-claimant unsuccessfully opposed a grant of probate in solemn form of the will and unsuccessfully claimed that the document was testamentary. It follows that the cross-claimant must pay the plaintiff's costs of these proceedings." 6In relation to that aspect of his order that imposed costs on an indemnity basis from 1 September 2010, his Honour said: "From at least the time the proceedings were commenced, the cross-claimant was obliged to evaluate carefully his prospects of success or failure if the litigation continued. Success in his case required establishing to the satisfaction of the Court that the document was a testamentary document intended to govern the disposition of his property after death and thus attract the application of s 8 of the Act. In my opinion, had a reasonable evaluation of the strengths and weaknesses of his case been made after receiving Mr Buckley's affidavit, it would have become apparent that the cross-claimant was without any evidence to prove the grounds upon which his defence and cross-claim were based. In all the circumstances, I am satisfied that in maintaining his defence and cross claim after consideration of this affidavit he acted unreasonably in that he adhered to a position which was doomed to fail and thereby prolong the case. Such circumstances justify departure from the usual rule and the making of an order for indemnity costs." 7His Honour held that the weakness of the cross claimant's case should have been realised by him and his advisers within about a month of receiving the affidavit. It was on that basis that he selected 1 September 2010 as the date from which indemnity costs should run. 8Leave to appeal is sought on the basis that his Honour's discretion miscarried in terms of the principles enunciated in House v R [1936] HCA 40; 55 CLR 499. 9In my opinion, leave to appeal should be refused. It has not been demonstrated that his Honour failed to take into account all relevant matters; he has not been shown to have taken into account any irrelevant matters. The absence of offers of compromise or Calderbank letters was not relevant on the issue of indemnity costs in this particular matter. What was relevant was the unreasonable stance adopted by the applicant in maintaining his position after the facts revealed in Mr Buckley's affidavit were made known to him. 10In my opinion, it could not be said that his Honour's costs orders were so unreasonable as to connote error. Indeed, in my opinion, they fell within the range of a sound discretionary exercise. There was no error of principle involved. I would propose that leave to appeal be refused with costs. 11BEAZLEY JA: I agree with the reasons of Justice Whealy. Accordingly, the order of the Court is that leave to appeal is refused with costs. ********** 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. Decision last updated: 04 April 2012