ADT v LRT (No 2)[2014] QSC 188

SUPREME COURT OF QUEENSLAND

[1] On 6 August 2014 I gave judgment in this matter.  I refused the applicant’s application for leave under s 22 of the Succession Act 1981 (“the Act”) to apply for an order under s 21 of that Act.  On that occasion I gave a preliminary indication that an appropriate order as to costs may be that both of the applicant’s and respondent’s costs be paid out of the assets of the testatrix on an indemnity basis.  The parties have now provided written submissions as to costs.

[2]  The applicant seeks the following orders:

(a)That the applicant’s costs of and incidental to the proceeding on an indemnity basis be paid out of the assets of the testatrix.

(b)That the respondent’s cost of and incidental to the proceeding including any reserved costs except in respect of the hearing on 10 July 2014, be assessed on the standard basis and be paid out of the assets of the testatrix. 

(c)That the respondent pay the applicant’s costs of and incidental to the hearing on 10 July 2014 on an indemnity basis.

[3] The respondent agrees that the applicant’s costs of and incidental to the proceeding should be paid out of the assets of the testatrix on an indemnity basis. The respondent however submits that a similar order should be made in respect to the respondent’s costs including any reserve costs without exception. 

[4] The applicant was unsuccessful in obtaining the relief sought. Ordinarily costs would follow the event and as a general rule the applicant, as the unsuccessful party, would be ordered to pay the successful party’s costs.  This is what occurred in Re: Keane; Mace v Malone (No 2) [2011] QSC 98.  The court considered the question of costs in respect to an unsuccessful contested statutory will application.  The order that was made was that the applicant pay the respondent’s costs, including any reserved costs, of and incidental to the application, to be assessed on the standard basis. 

[5] In the particular circumstances of this case however, I consider it appropriate that each party’s costs should be paid out of the assets of the testatrix on an indemnity basis.  The primary reason for the applicant being unsuccessful was because of an exercise of curial discretion pursuant to s 24(e) of the Act.  As I found at [56] of the judgment, the applicant had satisfied the “core test” stated in s 24(d).  Accordingly I found that the proposed codicil (with amendments) is or may be a codicil that the testatrix would make if she were to have testamentary capacity.  It was entirely understandable that the applicant, as the husband of the testatrix, sought leave to apply for authorisation to alter the 1998 Will. 

[6] I accept the respondent’s submission that if I was to make a different costs order with respect to the respondent then this would have the illogical consequence that the unsuccessful party received a more favourable costs order than the successful party.  There is simply no basis for differing cost orders. 

[7] The application made on 10 July 2014 was one which the applicant had to bring.  The application itself, which was filed on 10 July 2014, sought that the originating application be set down for trial on the first available date.  The application also sought an order that the costs of that application be reserved to the trial judge.  These orders were the orders that were in fact made.  

[8] The application of 10 July 2014 was supported by an affidavit of Dr Linton.  The applicant submits that given the clear opinion stated in that report concerning the testatrix’s precarious state of health it was, or should have been, obvious to the respondent that an urgent hearing date was required to be fixed for the hearing of the statutory codicil application.  Accordingly the applicant submits that the respondent acted unreasonably in opposing the application of 10 July and should not be allowed the costs of that application.  This submission however ignores that the applicant had made two previous attempts to have the originating application determined urgently.  The first was before P McMurdo J on 17 June 2014.  The applicant attempted to have the matter heard in the applications’ list and be dealt with within two hours.  This was always unrealistic and I note that the trial before me ultimately took one and a half days.  The second “urgency application” was before Philippides J on 3 July 2014. This ultimately failed for lack of any evidence of urgency.  Whilst Dr Linton’s affidavit referred to the fact that the testatrix could die at any time, his actual prognosis was that she would not reasonably be expected to survive in her present state for another six months.  I note that at the time of delivering judgment, namely 6 August 2014, the testatrix was still alive.  In those circumstances it cannot be said that the respondent’s opposition to the orders sought on 10 July 2014 was sufficiently unreasonable so as to warrant a costs order against the respondent, let alone costs on an indemnity basis. 

[9] The applicant submits that the respondent’s costs of the proceeding should be ordered on the standard basis rather than an indemnity basis.  This is because the respondent resisted the application for the statutory codicil on the grounds that the requirements of both s 24(d) and s 24(e) of the Act were not met.  The applicant further submits that the calling of four witnesses for the purpose of cross-examination did not materially advance the respondent’s case in relation to either s 24(d) or s 24(e).  This submission should be rejected.  It was through the calling of these witnesses that it was made clear that the draft proposed codicil required extensive amendment.  It was also as a result of the oral evidence that it was discovered that the one share in the son’s company held by the testatrix was held on a bare trust.  The oral evidence also clarified that a number of the gifts which the testatrix had left to the respondent were no longer in existence.  As I stated at [84] of the judgment, if I had been minded to grant leave and authorise the making of a codicil, I would have required the proposed codicil to be redrafted so as to exclude any reference to the one share and to gifts that were no longer in the possession of the testatrix. 

[10] Nor can it be said that the respondent, in resisting the application in respect to the requirement of s 24(d) of the Act, added significantly to the length of the hearing. Many of the factual circumstances relevant to the test under s 24(d) generally informed the discretion to be exercised under s 24(e).

[11] Counsel for the applicant at paragraph 11(c) makes a relevant observation as to whether the costs should be assessed:

“It is appropriate for the order to be framed so as to require assessment of the respondent’s costs that are to be paid out of [the testatrix’s] assets (as in Re: Keane; Mace v Malone (No 2)), because [the testatrix] is an incapacitated person who is not represented in this proceeding, and is not in a position herself to voice any concern as to the reasonableness of the respondent’s costs.”

[12] This observation applies not only to the respondent’s costs but also to the applicant’s costs. 

[13] The order I therefore order as follows:

1. The applicant’s costs of and incidental to the proceeding be assessed on an indemnity basis and be paid out of the assets of the testatrix.
2. The respondent’s costs of and incidental to the proceeding including any reserved costs, be assessed on an indemnity basis and be paid out of the assets of the testatrix.