I read with interest the recent decision of DW v RW.
The background to the matter is below:
1. DW made a family provision claim against RW, the Executor of the Estate of JW (Deceased).
2. The Executor of the Estate (RW) offered to pay DW $8,000.00 plus indemnity costs on 13 November 2012;
3. DW, who was contesting the Estate, countered the above offer by making an offer to settle for $120,000.00 plus costs fixed at $32,000.00 on 30 November 2012 (at a time when the Estate was worth approximately $350,000.00).
4. During the trial, the judge indicated to the parties that:
- Even during the trial both sides should continue to attempt to resolve the dispute;
- The value of the Estate was small at about $375,000.00 (excluding the Executor’s legal costs);
- The costs for DW were already around $75,000.00 prior to trial, while the costs for the Executor RW were already at around $94,000.00, and these costs were likely to increase if the trial runs its full length, diminishing greatly the value of the estate
5. On 19 July 2013 the Court awarded that the Estate pay DW an amount of $50,000.00 in relation to DW’s family provision claim against the Estate.
Who pays the legal costs of disputing a will?
In addition to the amount of $50,000.00, the court considered how the costs for each party should be paid. Some of the considerations of the Court when determining this included:
- The failure by both parties to settle the matter during trial, despite the Judge’s strong suggestions to do so;
- The amounts left in the Estate after any payment to DW and any other beneficiaries;
- Whether the amounts claimed for costs by each side were reasonable;
- The fact that the matter was complicated and involved the examination of partnership documents and books of account, which had not been provided in full;
- The Court’s wide discretion to award costs in such matters.
The Court found that:
- The Executor’s legal costs should be capped at $80,000.00 and should be paid by the Estate, even though they were considerably higher;
- The Claimant’s legal costs should be capped at $80,000.00 and should be paid by the Estate, even though were also considerably higher; and
- The above awards should not be indicative of the awards for costs which parties will receive when making a family provision claim or disputing a Will.
There is very big lesson to be learnt from this. If you are contesting a Will, it is important that you consider and understand:
- The costs consequences for yourself and the Estate during negotiations when contesting a Will, prior to trial, and at trial;
- The value of the Estate;
- The Court’s discretion to make the Estate pay for the costs of both sides, or for one of the parties to pay the costs for both sides. It is dangerous to assume the Court will order the Estate to pay every parties costs
If you would like to discuss costs when disputing a Will or are thinking of contesting a Will, please do not hesitate to contact me.
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