04 Jan Challenging a Will in NSW: How and Who Pays the Costs?
Not just anyone can bring a claim against the estate of someone who has died. Firstly, there are strict legal pathways for challenging a Will, and the applicant must prove that they have “standing” – that is the legal right to start litigation.
Challenging a Will, on any pathway, is a very different beast to other forms of litigation and cost implications can play a big role in choosing to take estate litigation forward.
So what are the pathways to challenge a Will?
Challenges to the Validity of a Will:
To challenge a Will on the basis that something is wrong with it, the applicant must be able to show that there are reasonable grounds to show that the:
- Testator lacked mental capacity;
- Will was made through fraud;
- Testator was under undue influence at the time of making the Will;
- Will or signature was forged;
- Testator did not know or approve the contents of the Will.
If any of those grounds are appropriate, the only people entitled to bring litigation include those named in the current Will, those named in a previous Will, or those who would be a beneficiary under the rules of intestacy.
Challenges relating to Reasonable Financial Provision:
This type of litigation is often referred to as a “Family Provision Claim’ and they are often sought by people who have either been left out of the Will, or who feel that they haven’t received an adequate share of the deceased’s estate. In order to bring a Family Provision Claim the applicant must fit within the classes of eligible persons which include a spouse, de facto partner, child, former spouse, a dependant or someone living in a close relationship with the deceased.
The applicant must also be able to satisfy the Court that “adequate provision for the proper maintenance, education or advancement in life” of the applicant has not been made by the deceased person in their Will.
What about costs?
Justice Gaudron in Singer v Berghouse summarized the position of costs in these types of cases:
“family provision cases stand apart from cases in which costs follow the event…costs in family provision cases generally depend on the overall justice of the case. It is not uncommon, in the case of an unsuccessful applicant, for no order to be made as to costs, particularly if it would have a detrimental effect on the applicant’s financial position. And there may even be circumstances in which it is appropriate for an unsuccessful party to have his or her costs paid out of the estate”.
The main thing to remember, is that the Court has wide discretionary powers when it comes to awarding costs, and such orders can range from:
- Defendant’s costs associated with defending a claim are to be paid from the estate;
- an unsuccessful plaintiff’s costs are to be borne by them;
- a successful plaintiff’s costs are to be paid from the estate;
- an unsuccessful plaintiff also to pay the defendants costs; or
- any other order that the Court sees fit.
In exercising their discretion, the Court will take a number of factors into account such as the size of the estate, the merits of the claim, any genuine attempts to settle the claim, the role of the parties in acting reasonably and in good faith, and not unnecessarily engaging in litigation (or prolonging it).
This latter point can be seen in Carey v Robson & Anor and Nicholls v Robson & Anor in which the Judge was mindful of poorly drafted affidavit evidence presented by the plaintiffs which unduly wasted Court time and increased legal costs. This undoubtedly supported the Court’s decision to award costs against the Plaintiff in respect of the affidavit, and on a party/party basis in relation to the defendant’s costs
When deciding whether or not to challenge a Will, individuals need to be aware that there are no guarantees when it comes to costs. They may find they have their own costs to pay even if they are successful and of course possibly other parties’ costs where their challenge is unsuccessful.
To discuss this further contact Solari and Stock Miranda on 8525 2700 to make an appointment with one of our Wills and Estates team or click here to request an appointment.