In an earlier post, we discussed the rather uncommon occurrence of appellate probate litigation in the Australian High Court. On 15 August this year, the Court unanimously held that Homayoun Nobarani had an interest in challenging the handwritten will made by the late Iris McLaren in 2013 (“the 2013 Will”) and was denied procedural fairness. The denial of procedural fairness arose from altering the hearing, at short notice, from a hearing of the caveat motion to a trial of the claim for probate amounting to a “substantial wrong or miscarriage” because Homayoun was denied the possibility of a successful outcome.
The Court provided that the executrix Teresa Mariconte could apply within 14 days that the costs of
- the trial,
- the appeal to the Court of Appeal of the Supreme Court of New South Wales and
- the appeal to the High Court be paid out of the estate and on a trustee basis.
On 29 August 2018, Teresa brought an application. The general rule is that costs (including litigation expenses) properly and reasonably incurred by the executor in connection with the administration of the estate are payable from the estate.
In this matter, the High Court held there was no suggestion that Teresa acted other than reasonably and properly in seeking and obtaining a grant of probate, and then resisted appeals seeking to set aside that grant of probate. Notwithstanding that, on appeal to the High Court, the grant of probate was set aside due to a denial of procedural fairness at trial to Homayoun.
Homayoun objected to the order sought on the bases that
- Teresa is the sole beneficiary of the estate according to the 2013 Will, and
- Teresa failed to disclose that sometime between the trial and the appeal to the Court of Appeal, the estate was distributed to her; and that her solicitors pay the costs of the application on an indemnity basis.
Costs awarded on an indemnity basis are all costs, incurred by a party to litigation in undertaking proceedings provided they have not been unreasonably incurred or are not of an unreasonable amount and are usually awarded only in circumstances involving misconduct
The High Court believed that Teresa’s role as executrix and sole beneficiary under the 2013 Will does not detract from the reasonableness or the propriety of her actions, nor her defence of the appeal to the Court of Appeal and the appeal to the High Court as executrix; and ordered that Teresa’s costs be paid from Iris’s estate.
Additionally, no order was made to restrain distribution of the estate by Teresa following the grant of probate after trial but while an appeal was pending. That distribution was not improper. The High Court rejected Homayoun’s submission that it was a basis for an award of costs against Teresa’s solicitors personally.