Costs – Family Provision

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Costs – Will Disputes & Family Provision Claims In NSW

This page provides information relating to costs of Will Dispute and Family Provision matters.
Costs 
Costs relating to Family ProvisionCosts Affidavit/EvidenceAwarding Costs
Costs relating to Family Provision
Determination of Costs
  • If a successful claim has been made out by the claimant, then that person will receive most of their costs out of the estate.
  • Costs are usually awarded to Plaintiff’s that are successful on a party/party basis. It is rare that the Court would not allow the Plaintiff to recover its costs.
  • If the claimant is unsuccessful than that person may expect to pay all their own legal costs as well as any costs of the estate by virtue in defending the claim.
  • The costs of the executor defending the proceedings are usually ordered to be paid out of the estate on an indemnity basis as usually the executor has no choice but to incur these costs in defending the estate and these costs are paid from the estate as they are incurred.
  • The Succession Act 2006 (NSW)
    • Court has wide discretion in relating to awarding costs in Family Provision Proceedings.
  • Possible outcomes in a Court order may include:
    • the losing party pays the costs of the winner (party to party), in addition to their own costs (solicitor/client);
    • each side pays their own costs;
    • payment of a part of the other side’s costs they incurred on a particular issue;
    • costs of one or both sides may come out of the estate, or
    • no costs are paid out of the estate
    • other – “in such manner as the Court thinks fit
What factors impact on costs
  1. Whether a litigant has given any kind of settlement offer to their opponent, that is whether a party made an offer of compromise to bring the matter to an end, and if so what happened.
  2. How genuine was the offer?  Was it refused?  If so was it unreasonable in the circumstances?
  3. Matters such as the willingness of each party to compromise and what efforts did they go to in order to avoid a court hearing may come into it.
  4. Whether the person starting the legal action acted reasonably in doing so.
  5. Whether the defending party acted reasonably in defending their position.
  6. In reference to point 2 above, whether the claim was frivolous, vexatious, made without any reasonable chances of success.
  7. Whether the applicant was guilty of some improper conduct during proceedings.
  8. Whether the estate was a small one; such as where the amount available for distribution is less than $500,000. In these cases, the Practice Note (see above) states that the Court may cap costs.
  9. However just because an estate is small, does not excuse unreasonable or uncooperative conduct of a party – if so they may find themselves up for costs.
  10. In circumstances of modest estates with beneficiaries of modest means, where each person’s claim taken together may be way out of proportion to the size of the estate.
Significance of the Practice Note
  • The Practice Note for Family Provision Claims must be adhered to as not only a guideline but also as a means of shielding oneself from costs.
  • The case of Carey and Robson emphasised the importance of adhering to the Practice Note so as to facilitate a justice, quick and cheap resolution of the REAL issues in dispute.
  • If any affidavits include irrelevant material, the court may order that the party responsible for that affidavit pay:
    • His/her own costs of preparing the affidavit and any time spent dealing with the affidavit in court
    • The indemnity costs of other parties to the proceedings in responding to the affidavit.
  • In Carey and Robinson, it was held:
    • The first Affidavit of the Plaintiff was 62 pages in length with 237 pages in annexures attached to that Affidavit. His honour observed the following:
      • Money was spent on expert reports that were otherwise unnecessary;
      • A valuation of the land in question was ultimately agreed upon both parties and this should have been the case from the start;
      • A detailed building report was unnecessary, irrelevant and ultimately disallowed.
Proportionality of Costs
  • The High Court has said that claims for family provision types of cases are different to others when it comes to considering costs, where costs follow the event.
  • Instead, costs will depend on the overall justice of the case.
  • This means that the Court won’t necessarily follow the usual rule in civil proceedings where costs follow the event. Costs following the event means that the successful party or “winner”, has their costs paid for by the losing party.  It may not cover all of the winner’s costs.
Costs Affidavit/Evidence
What is a Costs Affidavit?
  • Under the Practice Note, the following are standard directions following any mediation. The timetable is to include provision for filing and service of a costs affidavit and any updating affidavit of any party or beneficiary:
    • The plaintiff’s final affidavit as to costs and disbursements should identify the costs and disbursements calculated on the indemnity basis and those costs and disbursements calculated on the ordinary basis and the amount, if any, already paid on account of costs and disbursements. If there is any uplift factor included in the calculation of the plaintiff’s costs, or any agreement that provides for such an uplift factor, the quantum thereof and the terms of any such fee agreement should be identified in the costs affidavit.
    • The administrator’s affidavit as to costs and disbursements should identify the costs and disbursements calculated on the indemnity basis and the amount, if any, already paid out of the estate, or otherwise, on account of costs and disbursement
Importance of getting it right
  • If any of the Affidavits that have been filed and served include irrelevant material, the Court under its discretion may order that the responsible party for that Affidavit pay:
    • Their own costs of preparing the Affidavits and any time spent dealing with that Affidavit in Court;
    • The indemnity costs of other parties to the proceedings in having to respond to that Affidavit.
  • If the Court in its discretion deems that one party is financially well-off relative to the other party, then the Court may consider awarding not only the Plaintiff pay their own costs but also the Defendants costs on a party/party basis.

 

Awarding Costs
Capped Costs
  • Under the Practice Note, orders may be made capping the costs that may be recovered by a party in circumstances including, but not limited to, cases in which the net distributable value of the estate (excluding costs of the proceedings) is less than $500,000.
Who pays for costs
  • The losing party pays the costs of the winner (party to party), in addition to their own costs;
  • Each side pays their own costs;
  • Payment of a part of the other side’s costs they incurred on a particular issue;
  • Costs of one or both sides may come out of the estate, or
  • No costs are paid out of the estate
  • other – “in such manner as the Court thinks fit”: see section 9 of the Family Provision Act 2006 (NSW) on costs. 
How are costs awarded
  • Costs are awarded based on the discretion of the Court (section 99 Succession Act), however, there may be two common scenarios on how costs are awarded:
    • It is common for the unsuccessful party, to be ordered to pay the costs of the successful party. These costs are in addition to the party paying their own costs.
    • Where a costs order is made and that order will have a detrimental effect on one party financially then the Court may make no order as to costs to an Applicant in the proceedings.
  • In New South Wales legislation giving power to the courts regarding costs is given by the Civil Procedure Act 2005 (NSW).  The applicable legislation for family provision matters is Chapter 3 of the Succession Act 2006 (NSW).
  • The Succession Act2006 (NSW) gives the Court a discretion to order that costs of family provision proceedings including mediation costs be paid out of the estate, notional estate or both, in “such manner as the Court thinks fit”: ‘Costs’, section 9 of the Family Provision Act 2006 (NSW).