I often have clients asking me if their costs for bringing a family provision application will be paid from the estate if their claim is unsuccessful. I have previously written about legal costs when disputing a Will. I was interested to read a new decision of the Supreme Court of Western Australia which concerned an adult son who made an application for further provision from his late father’s estate.
Background of the case
The background of the case is as follows:
- Mr D’s application for further provision from his late father’s estate was dismissed;
- The Judge, in dismissing Mr D’s application, also made orders which allowed the defendants to make written submissions regarding what costs orders should be made;
- There were six defendants, all of whom were beneficiaries of the estate. Only three of the defendants made an application for costs as the other three did not take an active part in the proceedings;
- In the course of the family provision proceedings, the defendants had made settlement offers to Mr D on 31 August 2012 and 21 August 2013. Neither of these offers were accepted by Mr D;
- Mr D applied for an order that his costs for bringing his application for further provision be paid from the estate;
- The Executor of the estate applied for Mr D to pay her costs:
- On an indemnity basis; or
- On a party and party basis to and including 31 August 2012 or 21 August 2013 and, after these offer dates, for him to pay her costs on an indemnity basis;
- The second and third defendants sought orders that Mr D should pay their costs:
- On an indemnity basis; or
- On a party and party basis until 31 August 2012, or until 21 August 2013, and after these offer dates, for him to pay their costs in an indemnity basis.
What are the usual principles a Court will consider when awarding costs in family provision applications?
The Judge considered the following principles relating to awards of costs in family provision proceedings:
- That any award is at the discretion of the Court;
- The Court will generally order that the successful party should recover their costs;
- Section 14(6) of the Family Provision Act 1972 (WA) provides that the Court may make any order as to costs in family provision proceedings which it deems just;
- The power of the Court depends on the consideration of whether or not the Will maker has failed to make adequate provision for the proper maintenance and welfare of the applicant;
- Beneficiaries who have existing interests under the Will to protect are usually entitled to their costs on a party and party basis regardless of the outcome of the application, provided they have acted reasonably in the proceedings; and
- Every application must be considered on a case by case basis.
What did the Judge consider in this case?
The Judge considered the following circumstances of the case in making the order as to costs:
- The claim by Mr D was speculative and adventurous and had little or no real merit;
- Although Mr D was in difficult financial circumstances, he had equity in assets which he could sell to pay his debts and have enough funds remaining to live in comparative comfort and security;
- The offer dated 31 August 2012 never became capable of acceptance and so did not result in the application of the Calderbank doctrine;
- The offer dated 21 August 2013 was specific and capable of immediate acceptance, and so the failure of Mr D to accept this offer did give rise to the application of the Calderbank doctrine;
- The defence of Mr D’s claim by the Executor was proper and proportionate.
What did the Judge decide?
The Judge found that Mr D must pay the costs of the defendants as his persistence in his claim after the 21 August 2013 offer showed how unreasonable his pursuit of the litigation was. The Jude made the following orders as to costs:
- That Mr D pays the Executor/the first defendant her costs of the proceedings on a party and party basis to 6 September 2013, and after this date, on an indemnity basis;
- That Mr D pays the second and third defendants their costs on a party and party basis to 6 September 2013, and after this date, on an indemnity basis;
- Notwithstanding the first order as to costs, the Executor will be entitled to be paid her costs on an indemnity basis and these cots are recoverable from the estate.
I am an Executor and have been notified of a family provision application – what should I do?
If you have received notice that someone is contesting a Will of which you are the Executor, you should contact an experienced estate litigation lawyer. Please contact me should you require assistance or advice.