Temple v Temple (No 2)[2023] QDC 172

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   The applicant sought orders under Part 4 of the Succession Act 1981 for further provision for himself from the estate of his father, Kenneth Graham Temple. The trial proceeded before me on 24 and 25 July 2023, and on 21 August 2023, I made an order dismissing the application.^[1] The question of costs was adjourned for later consideration and each party has provided written submissions in this regard.

Theordersthepartiesseek

2. [2]
   The applicant submits that the appropriate costs orders are that each party bears their own costs, with the respondent being entitled to an indemnity for his costs from the estate. Alternatively, the applicant submits that, should the court seek to order the applicant pay some of the respondent’s costs, the appropriate order is:

1. No order as to costs up to 24 August 2021; and
2. The applicant pay the respondent’s costs on a standard basis from 24 August 2021 up to and including the conclusion of the trial.

3. [3]
   The respondent submits that the appropriate costs order are as follows:

1. The applicant pay the respondent’s costs, calculated on the standard basis up to and including 24 August 2021;
2. The applicant pay the respondent’s costs, calculated on the indemnity basis after 24 August 2021; and
3. Save to the extent that the costs of the respondent are ordered to be paid by the applicant pursuant to subparagraphs (a) and (b) above, and are actually recovered, the respondent’s costs of the proceedings be paid from the estate on the indemnity basis

General principles

4. [4]
   The general rule that applies to costs of litigation in civil matters is, of course, that costs follow the event. However, it is well established that that rule does not necessarily apply in cases of this kind.^[2] In Singer v Berghouse,^[3] also a case of an unsuccessful family provision application, Gaudron J said:

“Family provision cases stand apart from cases in which costs follow the event. Costs in family provision cases generally depend on the overall justice of the case. It is not uncommon, in the case of unsuccessful applications, for no order to be made as to costs, particularly if it would have a detrimental effect on the applicant’s financial position. And there may even be circumstances in which it is appropriate for an unsuccessful party to have his or her costs paid out of the estate.”

In Underwood v Underwood,^[4] Jones J said:

There was at one time a perception that a claimant’s costs, even an unsuccessful claimant, would be recoverable from the estate. That perception was dispelled a considerable time ago and now orders are commonly made, either disallowing costs for an unsuccessful applicant, or ordering such a claimant to pay costs. Costs in this jurisdiction have not been awarded on the traditional basis of “costs following the event", rather the question to be considered is whether the applicant’s pursuit of the claim was reasonable.

…

There is consequently a need to ensure that unreasonable behaviour on the part of any party, or the pursuit of claims which have no reasonable prospects of success, makes that party liable to some costs sanction.

Offerstosettle

5. [5]
   The following offers to settle were made by the parties:

6. [6]
   On 19 May 2023, the respondent made a formal offer to the applicant in the sum of $200,000.00. It was an all-inclusive offer and was open for acceptance for a period of 14 days. The parties accept the offer was a Calderbank^[5] offer. This offer was not accepted by the applicant.

7. [7]
   In Outram v Public Trustee of Queensland Brown J stated^[6]:

“Where Calderbank offers have been made, the critical question is whether the rejection of either offer was unreasonable or imprudent judged objectively in the circumstances existing at the time. The party seeking costs on an indemnity basis must show that the other party acted “unreasonably or imprudently” in not accepting the Calderbank offer.”

8. [8]
   In considering whether the applicant acted unreasonably or imprudently in rejecting the offer of 19 May 2023, I have had regard to the following factors:

1. By the applicant’s own admissions, he was estranged from the deceased for much of his adult life. This was unlike the two beneficiaries, being the Respondent and his own son, who both enjoyed a close and loving relationship with the deceased, and who both provided him with care and assistance.

2. The beneficiaries had raised strong competing claims in defence of the applicant’s application. Each are in financially necessitous circumstances and own assets which are considerably less than those owned by the applicant.

3. By the time of the offer of 19 May 2023, the applicant was aware of the above matters, including the personal and financial circumstances of the beneficiaries and their respective relationships with the deceased as set out in their affidavits filed prior to the making of that offer.

4. As at the date the offer was made, the estate had a value of between approximately $750,000.00 and $865,000.00. The offer therefore equated to approximately 25 per cent of the remaining estate. Under the terms of the deceased’s will, the applicant was to receive $5,000.00 for reasons that were set out clearly. The offer made by the respondent was therefore significantly better for the applicant.

5. The offer was made approximately two months before the trial listing, at a time when considerable costs had been incurred by both parties. The applicant was aware of the costs associated with the matter proceeding to trial and rejected the offer.

6. Whilst the applicant might have been acting reasonably in considering he had a moral claim, he must have known, at least from the date of the valuation of his property, that establishing a need for further and better provision out of the estate might prove challenging for him, particularly given the modest size of the estate.

9. [9]
   When considering the factors set out above, the applicant’s rejection of the offer made on 19 May 2023 was, in my view, unreasonable and imprudent.

10. [10]
    I have, however, come to the view that I should not order the applicant to pay the entirety of the respondent’s costs. The principal reasons for that are:

1. Attempts were made by the applicant to resolve the matter without the need for a trial;

2. The applicant’s rejection of the offers perhaps emanates from the brain injury he received as a young man which has resulted in the impairment of his executive functioning. The applicant is rigid and inflexible in his thinking and believes his parents were the cause of the estrangement between him and them; and treated him poorly and unfairly throughout his life;

3. The Calderbank offer from the respondent that the applicant rejected came at a stage when, I assume, a substantial amount of the costs had already been incurred.

11. [11]
    The applicant undoubtedly caused significant further costs to be needlessly incurred by the respondent. There is every reason to insist that parties endeavour to resolve claims, especially in modest estates such as this.^[7] It seems to me unjust that the beneficiaries bear the cost of the trial, or any costs incurred after the expiration of the offer made on 19 May 2023, being 2 June 2023.

12. [12]
    As noted, the estate is a modest one. The impact of the payment of the trial costs out of the estate would have a significant effect on the benefit that the beneficiaries receive from the estate. Given the relationship between the applicant and the deceased and the contrast with the relationship between the beneficiaries and the deceased, as well as the financial positions of each party as set out in my judgment, I consider it would be unjust for their benefit to be significantly reduced by the payment of the trial costs in circumstances where the matter proceeded to trial at the insistence of the applicant.

13. [13]
    My orders are as follows:

1. The applicant is to pay the respondent’s costs on the indemnity basis on and from 3 June 2023;
2. The respondent’s costs are otherwise to be paid out of the estate on the indemnity basis.