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Back to "Wills and Estates Newsletter - September 2020"


Warning: The ability of the Court to cap costs in Family Provision Claims

The parties’ costs in relation to the family provision claim alone were calculated to be $627,110.72 for the plaintiff and around $145,000 for the defendant.

UCPR r 42.1 provides that ordinarily, costs follow the event, unless it appears to the Court that some other order should be made.

Henry J referred to the discretion of the Court in the award of costs at [324] and went on to say:

“The Court recognises that it may be appropriate to make costs orders in family provision proceedings which deviate from the usual approach in accordance with the rules particularly as a feature of family provision cases is that they are concerned with the distribution of a fixed pool of assets and parties are often more concerned to vindicate their position than to resolve the dispute in an efficient and cost effective manner”. [325]

Her Honour referred to the Court’s power to cap costs in family provision proceedings and mentioned a number of factors relevant to the capping of costs, including the nature of the case, the size of the estate and the amount claimed.  The court may also have regard to the costs incurred by the other party, where reasonably the work required to be done would likely be equal.

Her Honour heavily capped the costs of the plaintiff at the amount of $125,000.  Her reasons for coming to that view are worth repeating:

“First, I am satisfied that the costs incurred by Adam in relation to the family provision claim are disproportionate to the success he has had.  His costs are around $627,000 significantly more than the provision of $350,000.  His costs are also in an amount that is relatively close to the value of the available cash assets in the estate, from which he accepted an order for provision should be made.

Second, Adam’s costs attributable to the family provision claim are significantly, more than four times, greater than the family provision costs incurred by Wayne of $145,000 (on an indemnity basis).

The significant disparity between the costs incurred on behalf of Adam compared to Wayne is inexplicable…

Third, I have also had regard to the estimates referred to by Slattery J in Wilson at [43].  His Honour referred to a standard family provision case conducted over two days with a handful of witnesses on each side costing around $70,000 to $80,000 and a complex four day case incurring costs of $120,000 to $140,000.  This case completed in two and a half days with only four witnesses.  Even allowing for some inflation cost sine October 2017, the recovery of costs capped at $125,000 does not seem unreasonable”.  [333] to [336].

Given that the defendant was the only other beneficiary of the estate, as well as the executor, Her Honour felt it unnecessary to make an order that Wayne be entitled to indemnity out of the estate for his costs of the proceedings.

The final orders provided the Plaintiff provision of a lump sum payment in the sum of $350,000 in lieu of the provision made in the will and his costs of the proceedings on an ordinary basis and capped in the sum of $125,000

For those interested in reading the decision of Slattery J referred to above, head to Wilson v Porada, The Estate of Peter Wolfgang Porada, late of Pericoe (no 2) [2017] NSWSC 1362.

Rebecca Tidswell, Special Counsel

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