Shaw v Tane (No 2)[2023] QSC 19

SUPREME COURT OF QUEENSLAND

Jackson J:

1. [1]
   On 23 December 2022 the Court made orders pronouncing against the validity of an alleged will of the late Martin Joseph Tullemans (“testator”) dated 18 October 2019 (“2019 will”) and a typed letter dated 18 October 2019 and pronouncing in favour of the force and validity of the last will and testament of the late Martin Joseph Tullemans dated 6 May 2013 (“2013 will”). Probate of that will was granted.^[1]
2. [2]
   The defendant applies for an order that the plaintiff pay the defendant’s costs of the proceeding (being on the claim and counterclaim) to be assessed on the standard basis up to 28 July 2022 and to be assessed on the indemnity basis thereafter. 
3. [3]
   The plaintiff applies for orders that both the defendant’s and her costs be paid from the testator’s estate.  Alternatively, the plaintiff submits that the Court should make no order as to costs, leaving the parties to bear their own costs.
4. [4]
   The Court has a discretionary statutory power to order costs.^[2]  That power is affected by the rules of court.^[3]  The rules provide that the costs of a proceeding are to follow the event unless the Court orders otherwise,^[4] and that a party who sues or is sued as a trustee (which includes an executor) may be entitled to have costs of the proceeding that are not paid by someone else paid out of the fund held by the trustee.^[5]  As well, in a proceeding relating to a will the Court may take into account the value of the property the subject of the proceeding, whether costs have been increased because non-compliance with the rules or a practice direction, or there is litigation of unmeritorious issues, or failure to make prompt or appropriate concessions or admissions or unwarranted attention is given to minor or peripheral issues.^[6]  Unless the rules or an order of the Court provides otherwise costs are to be assessed on the standard basis.^[7]  However, the Court may order costs to be assessed on the indemnity basis.^[8]  One express basis to order indemnity costs in favour of a party is where the party sues or is sued as a trustee (including an executor).^[9]  Where a party sues or is sued as a trustee (including an executor) and is entitled to be paid costs out of a fund held by the trustee, the costs assessor must assess the costs on the indemnity basis unless the Court orders otherwise.^[10]
5. [5]
   The defendant submits that the usual rule that costs follow the event applies in a proceeding for probate.  That may be accepted as a general principle.^[11]  The defendant submits further that there are two established exceptions to the usual rule but that this case does not fall within either of them.  In my view, it should not be accepted that the Court’s discretionary power is limited by particular categories of exception to the usual order that costs will follow the event before another order can be made.^[12]
6. [6]
   The defendant submits that the plaintiff’s conduct of the litigation warrants an order that the plaintiff pay the defendant’s costs of the proceeding.  A number of detailed submissions were made as to that conduct.  It is not necessary to consider all of them in full.  Some brief observations will be enough.  In a general sense, unreasonableness is sometimes engaged in relation to a question of costs where the issue is whether a trustee or executor party should be ordered to pay costs personally.  And as previously noted, the litigation of unmeritorious issues is one of the factors to be taken into account in a proceeding relating to an interest under a will
7. [7]
   First, the defendant submits that the plaintiff filed a large number of “voluminous” affidavits which added considerably to the costs of the proceeding.  It is true that the plaintiff filed affidavits which substantially contained the evidence in chief sought to be led by the plaintiff at the trial.  That was done in circumstances where the plaintiff proposed to and did apply for an order that the evidence in chief of the witnesses to be called at the trial should be directed to be given by affidavit.  Ultimately, the plaintiff was unsuccessful in that application.  But it was not an application made unreasonably and I do not consider that the preparation and service of the affidavits which fully apprised the defendant of the evidence in support of the plaintiff’s case should be treated as unreasonable conduct. 
8. [8]
   It is true that the rules provide that subject to an order of the Court, for a proceeding started by claim the evidence is to be given viva voce whereas for a proceeding started by originating application the evidence in chief is to be given by affidavit.^[13]  However, it is common for directions to be made in many cases started by claim that the evidence in chief is to be given by affidavit including in cases on the equity side of the Court’s jurisdiction, proceedings on the commercial list or supervised case list and otherwise.
9. [9]
   Second, the defendant submits that many of the affidavits in the proceeding were entirely irrelevant, but gives only one affidavit as an example of that.  In my view, it is not a significant consideration.
10. [10]
    Third, the defendant submits that the plaintiff was unreasonable in seeking to prove the 2019 will in light of what was known to her at the time of starting the proceeding on 27 September 2021.  Reliance is placed on the plaintiff’s possession of the solicitor’s file note referred to in the reasons for judgment for the substantive decision.  However, the significance of that file note was not a matter particularly raised by the defendant as her case was conducted at the trial.  Further, the defendant relies on Deborah Phillips’ statutory declaration that she had not executed the will as a witness.  However, the reasons for judgment largely rejected Ms Phillips’ evidence.
11. [11]
    Fourth, the defendant relies upon the initial report given by the document examiner Mr Heath and his supplementary reports containing his opinion that the signatures of the deceased and Petras on the will were false.  However, as the reasons for judgment show, Mr Heath’s opinions were not necessarily accepted in full.
12. [12]
    In my view, however, the view of unreasonableness urged by the defendant may involve a degree of hindsight that the Court should be careful to avoid in relation to the conduct of a party who starts a proceeding before the evidence is all in and should also be cautious about it in relation to anticipated viva voce evidence to be given at a witness trial.
13. [13]
    Fifth, the defendant further relies upon the circumstance that the plaintiff was not a disinterested executor because she was the major beneficiary under the 2019 will and so should not necessarily be treated as a disinterested trustee or executor might be treated.  That point should be accepted. 
14. [14]
    As well, the defendant submits that the evidence of the plaintiff’s witnesses including the plaintiff, her husband, and her son, were significantly or largely rejected by the Court.  That too may be accepted. 
15. [15]
    But it should not be forgotten that the defendant did not conduct the proceeding on the footing that the 2019 will was a forgery or fraud and the plaintiff should not be dealt with on the question of costs as if that was what was found.  Accordingly, I reject the defendant’s submission that the plaintiff must have known that she was attempting to obtain the Court’s sanction of the 2019 will when she knew it could not be supported.  I am not prepared to make that finding as to the plaintiff’s state of mind.
16. [16]
    Nevertheless, in my view, the circumstances of the proceeding are such that this is a case where costs should follow the event.  Second, I also consider that having regard to the plaintiff’s personal interest in the proceeding and her conduct of the proceeding this is a case where the plaintiff should not be indemnified against the defendant’s costs by an order that those costs be paid from the estate.  Third, for the same reasons and having regard to the findings of fact that were made in the reasons for judgment this is not a case where the plaintiff’s costs should be ordered to be paid from the estate. 
17. [17]
    The remaining issue is whether the defendant’s costs should be assessed on the indemnity basis from 28 July 2022.  On that date, the defendant’s solicitors made a Calderbank offer to settle the case without prejudice save as to costs.  The offer was to pay the plaintiff the sum of $50,000.00 inclusive of costs in full and final satisfaction of all claims she had against the estate.  The offer was open until 11 August 2022.  It was stated in the letter that if the offer were not accepted it would be relied upon as a basis for an order that the plaintiff should pay the defendant’s costs to be assessed on the indemnity basis.
18. [18]
    The question is whether it was unreasonable for the plaintiff not to accept that offer by 29 July 2022 (or perhaps later within the acceptance period) to the extent that the Court’s power to order that the defendant’s costs be assessed on the indemnity basis from that date should be exercised. 
19. [19]
    On 1 August 2022, the plaintiff rejected the offer of settlement and acknowledged that in doing so there was a real risk that if her evidence were not accepted, she would personally be ordered to pay the defendant’s costs. 
20. [20]
    Not every case where an offer to settle is made without prejudice save as to costs that is substantially more favourable to the successful party than the ultimate result will lead to the conclusion that it was unreasonable for the unsuccessful party not to accept the offer.  In a contentious witness trial as to the primary facts it is not always easy for one party or the other to foresee where the litigation dust will settle. 
21. [21]
    It is true that in the present case important adverse credibility findings were made in relation to the plaintiff’s evidence as well as the evidence of her husband and son.  But it is another matter to conclude that the plaintiff was aware at all times that findings of the kind that were ultimately made were likely to be made or that the plaintiff did not personally have a belief that her claim was a proper one.  These sorts of considerations are possibly more important in circumstances where a plaintiff’s claim is not made solely on their own behalf but also for other people who stand to benefit as in the case of other beneficiaries under a will.  Such considerations also inform the rule that a validly appointed executor or trustee is ordinarily entitled to indemnity from the estate for expenses properly incurred including expenses of litigation. 
22. [22]
    It is also a relevant consideration that the existence of the 2019 will brought into question the continued validity of the 2013 will propounded by the defendant as executor by way of counterclaim.  The orders made in the proceeding included proof of the 2013 will and an order that the defendant be granted probate of that will.  On the counterclaim, the plaintiff was a proper defendant and did not dispute the 2013 will in the event that the Court did not find in favour of the 2019 will.
23. [23]
    In these circumstances, in my view, it is not appropriate to order that the plaintiff pay the costs of the proceeding on the indemnity basis. 
24. [24]
    For clarity, it should be ordered also that the defendant is entitled to be indemnified for her costs of the proceeding from the estate of the testator.