Wills and estates: February 2019

Harbinger of new approach to costs in family provision claims

The Court of Appeal dismissed the appeal in Harris v Harris [2018] NSWCA 334 (Basten JA, Macfarlan JA and Simpson AJA). The trial judge (Ward CJ in Eq) had dismissed the application for family provision because her Honour was not persuaded that inadequate provision had been made for the plaintiff, the testator’s son. If her Honour had found otherwise, the judge would have made provision for $15,000. The estate was valued at about $8,000. A joint interest in a retirement village lease and a reversionary pension may have been designated as notional estate. They had a combined value of $600,000. The total costs of the hearing were $130,000. Basten JA (with whom Macfarlan JA expressly agreed and Simpson AJA implicitly agreed) observed that the costs at trial exceeded 20 per cent of the potential notional estate and was 10 times the trial judge’s possible award (at [8]).

The judge made these comments which suggest the Court’s future approach: ‘The Court’s willingness to entertain comparatively expensive litigation of this sort may well have encouraged the pursuit of such claims. Consideration should be given in such cases to orders capping the costs of both parties at an early stage of the proceedings. Further, the applicant son failed to attend a mandatory settlement conference. There should be procedural sanctions which apply in such cases where adverse costs orders have no practical deterrent effect’ (at [18]-[19]).