Wills and Probate Case Update November by Carol McOmish and Nathan McOmish

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1 Wills and Probate Case Update November 2013 by Carol McOmish and Nathan McOmish Advice and directions of the Court Re Davis [2013] VSC 232 Executors sought Court approval of their decision to pay the legal costs of Family Court proceedings out of the estate. The Family Court proceedings had sought parenting orders in relation to the deceased s infant daughter, the beneficiary of the estate, pursuant to a statement of wishes made by the deceased on the same day that she made her will that her daughter remain in Australia and be provided with a Jewish education. The deceased s estranged domestic partner and daughter s father left Australia with the daughter. One of the executors, a blood relative of the daughter, instituted Family Court proceedings seeking the daughter s return to Australia and parenting orders. The deceased s will conferred on the executors the power to apply income or capital for the maintenance education or advancement or benefit of beneficiaries. The executors submitted that the term advancement meant any use of funds that would improve the material situation of the beneficiary, that the term benefit had a very broad meaning and entitled them to spend trust funds for anything they considered to be reasonably for the benefit of the beneficiary, and that there was no limitation on the benefit power provided it was in some way rationalisable as being for the benefit of the child. McMillan J, after a review of the authorities, concluded that the power to apply money for the advancement or benefit of a beneficiary extends to any use of money that will improve the material situation of the beneficiary, and that the payment of legal costs for a legal proceeding can, in certain circumstances, be a valid exercise of that power. Her Honour referred to the role of the Court pursuant to r (c)(i), i.e. that the court's role is not to consider the wisdom of the trustee's exercise of discretion but to grant the trustee's application for an order approving the trustee's agreement to the compromise, if the court is satisfied of the propriety of the application. That involves considering whether: (a) (b) (c) (d) the trustee's decision to agree to the compromise was within power; there was any impropriety in the trustee's decision; the trustee exercised its discretion in good faith; and the trustee gave fair consideration to the relevant issues Her Honour dismissed the application, not being satisfied that the executors gave fair consideration to the issues relevant to the exercise of their discretion, and it not being possible

2 for her to ascertain whether the Family Law proceedings would materially benefit the beneficiary (it being impossible to assess what the Family Court might determine would be in the beneficiary s best interests). Her Honour considered relevant considerations to be, inter alia, the dissipation of estate assets pursuant to the Family Court proceeding, the fact that the deceased s wishes were not binding, and the fact that the deceased s wishes could still be met if the beneficiary remained with her father. The executors were denied their costs of the application from the estate in In Re Davis (No 2) [2013] VSC 357. McMillan J considered that the prudent approach was for the executors to seek legal advice before initiating the Family Court proceedings, or as soon as practicable afterwards (they had incurred more than $47, in litigating the Family Court dispute). Her Honour considered that the executors, although not acting dishonestly, had not properly considered the interests of the trust, which interest would not be subordinated to their fear of personal liability for costs. Cody v Cody [2013] VSC 274 Two executors sought orders against the third executor that the executors take all steps to effect the sale of an apartment at Falls Creek, which apartment was an asset of the residuary estate. The will set up five discretionary trusts for the benefit of each of the families of the deceased s five children, each of which had a one fifth share in the residuary estate. The order for sale was sought due to disagreement between the children as to the use and enjoyment of the apartment. The application was adjourned so that the parties could mediate. The mediation resulted in a document entitled Binding Heads of Agreement, which provided that the apartment was to be placed on the market for sale at the end of the 2014 ski season unless a majority of family members agreed to retain it. The agreement also provided for the defendant to be paid his entitlements to share in the capital of a family trust earlier than was provided for in the trust. The agreement was subject to and conditional upon the parties executing Terms of Settlement embodying these Heads of Agreement and the parties will in good faith take all steps to enable preparation thereto. The parties could not reach agreement in relation to terms of settlement. The plaintiffs sought an order under Order 54 of the Rules giving effect to the agreement to sell the apartment. The defendant argued that the sale of the apartment and the trust matters were interdependent and that the plaintiffs were seeking specific performance of part only of an agreement, which the court generally will not order, and so the application was not properly made under Order 54. McMillan J first considered the relevant principles as to whether a settlement agreement is binding and enforceable in order to resolve the issue of specific performance. Her Honour

3 held that the agreement was a precursor to a final binding agreement, as it was subject to the execution of settlement terms by the parties, and not a binding agreement between the parties. As such there was no agreement to which the Court could give effect and specific performance was not open on the facts to either party as specific performance is not ordered unless a subsisting contract enforceable at law is established. Her Honour considered that the application was properly made under Order 54, as the Court was being asked to make an order approving any sale (the will authorized the executors to sell estate property) or directing any act to be done in the administration of the estate as opposed to making an order approving a compromise, and that it was not an application for specific performance of part only of a settlement. There was evidence of deep and protracted divisions between the children and discussions relating to the administration of the estate had not been fruitful. Her Honour ordered that the apartment be sold pursuant to Order 54. Cody v Cody [No 2] [2013] VSC 401 The plaintiffs sought indemnity costs based on a Calderbank offer that sought to sell the apartment promptly by auction. The defendant rejected the offer, replying that a trustee cannot purchase trust property (as the offer suggested it could), preferring that all estate and family trust issues in dispute be resolved together and that rules had been agreed concerning use of the apartment. The plaintiffs argued, inter alia, that they could not have done anything more to resolve the dispute and that the defendant had agreed to sell the property at mediation, but then reversed his position. The defendant argued, inter alia, that the offer was an offer to capitulate, not a genuine offer to compromise, and that it was made early in the proceedings. McMillan J found the evidence of the defendant to be inconsistent, as discussions regarding the entire estate and the family trust had not been fruitful and rules had not been agreed for the lodge. In fact, the relationship between the executors had deteriorated to such an extent that they were unable to work together. Her Honour found that it was not unreasonable for the defendant to reject the offer; it was made only 2 weeks after proceedings commenced, it was only open for 5 days, and it was prior to the filing of all affidavit material. It also contained some shortcomings in relation to whether a trustee is permitted to purchase trust property. Her Honour however considered that the defendant s persistence in resisting an order that the apartment be sold, even after the mediation, resulted in an improper expense to be incurred by the estate, and that therefore it was appropriate to depart from the usual costs order indemnifying trustees where a trustee

4 applies to court for advice or directions. The order was that the defendant be entitled to his costs up to and including the mediation but bear his own costs on an indemnity basis thereafter. Testamentary capacity In Le Bon v Lili [2013] VSC 431 there was a seven week gap between giving instructions for the will and execution on 3 November The propounders conceded that it was probable that the testator, who was 95, did not have full testamentary capacity on the date that she signed the will, but submitted that provided that she had testamentary capacity at the date of giving instructions all that was necessary at the date of execution was that she at least understood that she was being presented with a will for her signature that had been prepared to give effect to her intention. Macauley J, in considering that the law does not require both testamentary capacity and due execution to co-exist at the same time, followed and applied the principles of: (a) Norris v Tuppen, i.e. for there to be testamentary capacity there must be: 1. awareness and appreciation of the significance of the act which the testator is embarking upon; 2. awareness in general terms of character, extent, and value of the estate with which the testator is dealing; 3. awareness of those who might reasonably be thought to have claims upon the testator s bounty; and the basis for and nature of those claims; 4. the ability to evaluate and discriminate between the respective strengths of those claims; and (b) Parker v Felgate, i.e. that if a testator has given instructions to a solicitor to make a will and the solicitor prepares it in accordance with those instructions all that is necessary to make a valid will is the testator s ability to understand, and to believe, that he or she was signing a will that had been prepared by the solicitor to make disposition of his or her property in accordance with instructions given by him or her on an earlier occasion. The will left $1,000,000 to the testator s sister, and the balance of the estate, worth approximately $2,600,000, was essentially left to charities. An earlier will, made in 2005, gave various pecuniary legacies totaling $105,000 and the residue to the testator s sister. The testator had suffered from dementia from 2006 and had experienced cognitive decline since. Medical evidence was of limited value, as her treating doctors were unable to provide a concluded view as to her testamentary capacity in The solicitor who prepared the will

5 considered that she understood and approved of the will as it was read to her and that she had explained the reason for the reduced gift to her sister, but expressed doubt as to her testamentary capacity. When he attended her for the will s execution she did not at first recognize him as her solicitor, appeared to recognize him when it was explained to her, and, and appeared to understand that he had brought her will for the purpose of having it signed. His file notes recorded that after she signed the will it was difficult to have a rational conversation with her and it was not clear that she understood the distribution of her estate or the extent of her assets. His Honour refused the grant of probate. He was satisfied that the testator had testamentary capacity when giving instructions (not without hesitation and having considered evidence that satisfactorily explained the significant differences between the two wills), but not satisfied that she had the requisite understanding described in Parker v Felgate. Informal Wills Rowe v Storer [2013] VSC 385 concerned an application to have an unsigned draft will admitted to probate. The deceased had provided written instructions to a solicitor, who prepared a will and sent it to the her, with a covering letter recommending that the will be signed at his office and requesting that she advise before attending to sign the will of any amendment required. The will was not on precisely the same terms as the written instructions; the instructions specified that the propounder was to receive the house and contents and residue whereas the will left the propounder the residuary estate that was on trust for sale. There was no response to a follow up letter advising the deceased that the will has no effect until it has been properly signed The solicitor s secretary subsequently rang the deceased, who had been diagnosed with cancer some months before giving instructions. Upon being told by the deceased that she was unwell the secretary offered to have the solicitor attend her at her home to sign the will. The deceased declined that offer and said that she would call later to arrange an appointment. There was evidence that the deceased had complained that she had visited the solicitor s office to sign the will but was told to come back another day due as there no one in attendance to witness the will. The solicitor said he did not believe that that had happened.

6 There was also evidence that the deceased had said that she would go to the solicitor s office to sign the will, but was unable to as she was incapacitated by a stroke. McMillan J dismissed the application. Her Honour was not satisfied that the evidence put before the Court by the propounder established, on the balance of probabilities, that the deceased intended the draft will to be her will. She considered that there was no evidence that the deceased intended to sign the draft will in its current form, that she was aware that the document would have no effect unless she signed it, and that she was presented with an opportunity to sign the draft will but had declined to do so. intention to sign that particular draft of the will, and the fact that the deceased had not signed the draft will when she had the opportunity. Her Honour considered the case before her to differ significantly from cases where an informal will had been admitted to probate, such as cases where there was clear evidence that a deceased had demonstrated his or her satisfaction with a draft will and had made arrangements to sign it but death had intervened. The propounder unsuccessfully sought costs from the estate in Rowe v Storer (No 2) [2013] VSC 635. There had been a Calderbank offer that retained minor legacies from the draft will and offered her an equal share of the balance of the intestate estate with the next of kin. McMillan J considered the probate litigation exceptions to the usual loser pays costs orders, i.e. that costs will be paid from the estate where the testator is the cause of the litigation and where an investigation is reasonably called for, but if the unsuccessful party has not acted reasonably he or she will pay the costs. In her Honour s view the unreasonable rejection of a Calderbank offer was relevant in assessing whether costs should be borne by the estate in probate litigation. Her Honour ordered that the propounder bear her own costs of the application on the basis that she had not acted reasonably; the propounder s evidence had gaps fatal to her case, and so the propounder was not reasonable in deciding to make the application and the rejection of the Calderbank offer was unreasonable. That being the case the usual order as to costs would have applied but for the fact that the defendant had not sought costs against the propounder. The propouder was also ordered to bear her own costs of an unsuccessful pendente lite application brought by the defendant because of the informal will application. Her Honour was of the view that the defendant had acted reasonably in bringing the application and ordered that her costs in both applications be paid from the estate on an indemnity basis. Re Will of Rosaro (deceased) [2013] VSC 531

7 State Trustees Limited sought a grant of probate to a statutory declaration made by the deceased in In the declaration the deceased stated that she do solemnly and sincerely declare this as being my Last will, appointed an executor, and gave her estate to a university hospital in Italy. The sole witness to the statutory declaration had not been located as the signature was illegible. State Trustees had acted as the deceased s administrator and had found the document after its appointment in A State Trustees employee attended the deceased, explained that there could be problems with the declaration as a will, and invited the deceased to make another will. The deceased declined, and was quite insistent that she did not want to make another will. Genealogical research established that the deceased had a brother in Italy. immigrated to Australia in She had McMillan J referred to the need, in probate cases, given the consequences of findings made and the inability to hear evidence from the deceased person, to evaluate the evidence with great care in accordance with the principles set out in Briginshaw v Briginshaw. McMillan J was satisfied that the declaration was testamentary in nature. It dealt with the disposition of the deceased s estate, and the he deceased had told the executor nominated in the will, who authorized State Trustees to apply for probate, in the late 1980 s that she wanted her to be the executor of her will. Her Honour firstly considered whether the deceased intended the declaration to operate without more as her final will at the time the declaration was made. There was no evidence as to the circumstances in which the declaration came into being, how and why it came to be in the form of the declaration, and whether it was prepared or written by the deceased or on her instructions. Her Honour considered the suggestion that the deceased had consulted someone to draw the declaration up in a formal manner significant (it used legal expressions that would not ordinarily be used by a lay person and it was not in the deceased s handwriting) but was ultimately of the view that State Trustees, given the lack of contemporaneous evidence, had not put forward persuasive proof that the deceased had wanted the declaration to be her final will and did not want to make any changes to it. Her Honour then considered whether the deceased intended the declaration to be her will at a later date, it being necessary to consider whether the requisite intention arose at some time after the declaration was signed. She held that the evidence did not establish that deceased intended the declaration to take effect on her death; she was made aware by State Trustees that there would be problems with the declaration being proved as her will, she was not troubled by that, and had stated that she did not want to make another will.

8 Enforcement of Terms of Settlement Barratt v Foran [2013] VSC 420 The proceeding was commenced because of a disagreement as to whether the deceased s penultimate will or a later informal will should be admitted to probate. The parties executed terms of settlement agreeing that letters of administration with the informal will annexed be granted to the plaintiff and that the plaintiff pay the defendants the sum of $710,000 out of the estate. Letters of Administration with the informal will annexed were granted to the plaintiff, who subsequently failed to pay the $710,000. The plaintiff alleged that the defendants removed valuable items from the home of the deceased, including a 1930 penny worth $730,000, and that they tricked her at mediation into believing that the items formed part of the estate and that she would take possession of them. She said that she had not listed the items in an inventory of chattels that she prepared prior to the mediation, without the assistance of a lawyer, as she had mistakenly believed that she only had to list items that would be subject to official or legal transfer procedures. She argued that it would be unconscionable to enforce the terms of settlement because she thought that the items would be included in the estate. The terms of settlement had provided that she and the defendants could select from the chattels and other belongings of the deceased. Applying the Bringinshaw standard requiring proofs to survive careful scrutiny, McMillan J found that the plaintiff should comply with the terms of settlement. Her Honour s reasons were, firstly, because there was no evidence that prior to the mediation the plaintiff believed the valuables formed part of the estate, and, secondly, because the plaintiff s actions prior to the execution of the terms of settlement were inconsistent with the current allegations that the deceased owned a number of items of substantial financial value. The plaintiff had failed to mention the items at any point prior to the mediation, or on the day after when she inspected a self-storage facility containing the deceased s belongings. In any event, the plaintiff s allegation that the defendants improperly took valuable items from the deceased estate was without foundation and there was no persuasive evidence that those valuable items ever formed part of the deceased s estate. Rectification of a will Trust Company (Australia) Ltd v Schoenmakers [2013] VSC 556 An application for an extension of the six month time limit from a grant of probate in which an application for rectification of a will must be made.

9 The will gave the net sale proceeds of the principal residential property owned by the deceased at the date of his death to his brother. The deceased s principal property at the time was a unit in a retirement village. The unit was sold approximately a year later by the deceased s attorney under power when the deceased moved into a nursing home. The brother sought an order rectifying the will to provide that he was entitled to the net sale proceeds of the unit, on the assumption that the deceased had capacity at the time the unit was sold. The deceased s care manager, upon becoming aware that the deceased did not have a current will or any powers of attorney, arranged for a solicitor from the plaintiff to attend the deceased and take instructions. Solicitors attended the deceased and took instructions with the aid of the deceased s care manager, who provided a Dutch-English translation (the deceased came to Australia from the Netherlands in 1949, and although he could speak English was more comfortable communicating in Dutch in his later years). File notes recorded that the proceeds of unit and proceeds of house were to go to the brother, if he predeceased to his wife, and the balance of the estate to other siblings. A draft will was prepared that provided that the net proceeds from the sale of the principal residential property owned by the deceased at the date of his death was go to the brother from the residue, and that the remainder of the residue was to go to other siblings. A file note recorded that the deceased had read and understood the documents (an enduring power of attorney was prepared as well) and was happy with them. The care manager ed the solicitor on the same day to say that the deceased had read and understood the draft will and power of attorney and was happy to go ahead with them. The solicitor attended the deceased and the will and enduring power of attorney were signed. The care manager gave evidence that the solicitors had not explained to the deceased that the gift to the brother would fail if the unit was sold and fall into residue and thus be divided between his other siblings, and that, based on conversations she had had with the deceased, he intended, understood, and believed that his brother would receive the net sale proceeds of the unit regardless of whether he owned it at the date of his death, and that they would not go to other siblings unless his brother and his brother s wife predeceased him. The brother gave evidence that the deceased had told him that he had changed his will making him a beneficiary. The plaintiff submitted that time should not be extended on the basis that the application had no reasonable prospects of success. McMillan J referred to the relevant legal principles for an application under s. 31 of the Wills Act, as considered by Whelan J in Re Provost:

10 1. Before the power of rectification can be exercised the Court must be satisfied that the will was so expressed that it failed to carry out the testatrix's intentions, and also what it was that the testatrix did intend concerning the part of the will which is to be rectified. 2. What must be shown is what the testatrix's actual intention was, not what her intention probably would have been had she thought about the matter. 3. Although the standard of proof is on the balance of probabilities, clear and convincing proof is required. 4. It is not sufficient for rectification to establish that the testatrix would not have wished for an intestacy, or would not have wanted her property to go in a way that, in the events which have happened a particular clause results in the property going. 5. If there is not evidence to show what the testatrix's intention was in the event of certain things happening, the Court cannot rectify the will. In her Honour s view the deceased s instructions were clear; he wanted the proceeds of unit or proceeds of house to pass to his brother, or if he predeceased, to his brother s wife. There were no instructions that the proceeds were to be tied to the unit being owned by me at the date of my death, whereas the drafting of the will restricted the gift to the brother to those circumstances, and for that reason her Honour considered that the will failed to set out the deceased s instructions in relation to the gift to his brother. Her Honour held that the brother was entitled to orders extending the time for making the application and rectifying the will so that notwithstanding the sale of the deceased s principal place of residence the brother was entitled to receive that part of the estate of the deceased that represented the net proceeds of the sale of the unit. Testator s Family Maintenance Extension of time Fanning v Harding [2013] VSCA 208 The deceased left her modest estate of $126,000 entirely to her son. The applicant was the 83 year old sister of the deceased. She supported the deceased in her later years, providing a loan of $35,000 so the deceased could maintain her property. The deceased moved in with her sister during her final 18 months so that she could provide care to her as she had terminal pancreatic cancer. The originating motion seeking provision under Part IV of the Act was filed in the County Court 44 days after the expiration of the 6 month time limit. Despite being on notice, an application for an extension of time under s 99 of the Act for a further 14 months. The delay in lodging an application for an extension of time was caused by the applicant s solicitor s computer error and also a period of negotiations between the parties.

11 At first instance, King JA held that taking the best possible view of the plaintiff s evidence, I am not satisfied that the plaintiff has an arguable case. Her Honour considered the modest size of the estate, the strong relationship between the deceased and her son, the difficulty the applicant had in demonstrating financial need given she was 83 and had an income of $650 pw and funds of $185,000 and that ordinarily a sibling relationship will not give rise to a moral duty. Her Honour also applied Stanley v State Trustees in deciding that the costs of continuing proceedings were disproportionate to the size of the estate given that the applicant s prospects cannot be characterised as strong. On appeal, Hansen and Tate JJA found that the applicant should not have been burdened by delay caused by her legal representatives (per Jackamarra v Krakouer). Providing 24 hour care for the deceased at the most vulnerable time of her life supported an arguable case that a special relationship developed beyond a normal sibling relationship. Further, the applicant suffered multiple health concerns typical of an 83 year old, which may require regular nursing and personal care in the future and therefore a financial need in order to fund such care. The Court of Appeal also found that Stanley s case was distinguishable as the applicant s case was not weak nor so lacking in force that it would be wrong to diminish the estate and thereby prejudice the beneficiary. The applicant was granted an extension of time, with the Part IV application remitted to the County Court. In order to reduce costs, the appeal was heard on the papers. Costs were reserved. Bankruptcy Poesch v Grosvero [2013] VSC 588 The deceased died intestate, with letters of administration subsequently granted to the deceased s parents (the defendants). The plaintiff claimed to be the deceased s domestic partner. Her caveat against the grant of letters of administration lapsed, resulting in a costs order against the plaintiff. The plaintiff then commenced Part IV proceedings, after which she was declared bankrupt as a result of the unpaid costs order. The plaintiff was therefore an undischarged bankrupt. When the summons came on for hearing in the Part IV directions list, the Plaintiff s trustee in bankruptcy appeared and sought time to make an election under s 60 of the Bankruptcy Act as to whether to take over the conduct of the proceeding. Under s58 of the Bankruptcy Act, the property of the bankrupt is vested in the Official Receiver. Under s5 of the Act, property is defined to mean real or personal property of every description. The definition extends to choses in action. The question is then whether a statutory right to make application under Part IV is a personal or a bare right. If it is a chose in action it is vested in the Trustee in Bankruptcy.

12 Derham AsJ reviewed the relevant authorities, noting they were all one way since the judgment of Sholl J in Coffey v Bennett [1961] VR 264: the right to apply for relief under Part IV is a personal, or bare, right, and as such it cannot vest in the official receiver. The legislative changes in 1998 do not affect this analysis, as the relevance of moral duty and proper maintenance and support remain. These factors are wholly personal to the applicant. The proceeding was therefore not stayed under s 60 of the Bankruptcy Act. His Honour distinguished the position of personal representatives on death of the applicant from under the Bankruptcy Act. A claim validly commenced before the death of the applicant survives, but obviously limited to the provision that would have been appropriate up to the claimant s death (e.g. costs of proceeding may be allowed). Substantive proceeding Trapani v Ciocca [2013] VSC 462 The deceased died at 52, leaving a life interest in his $468,000 estate on trust to meet the needs or comforts of the plaintiff, his 23 year old son. The trustees were the deceased s sister and her daughter. The remainder of the estate was left to 23 nieces and nephews, to whom the deceased owed no obligation. The plaintiff suffered from schizophrenia and psychosis, probably associated with long term marijuana use. He lived with his mother, who was his full time carer and litigation guardian. His parents divorced long ago. The main issue in the proceeding was whether the trust made adequate provision for the proper maintenance of the plaintiff. While the plaintiff was seriously ill, the prospect remained that he may recover or at least manage his illness in the long term. The plaintiff also alleged that the trustees were not suitable. There were arguments between the plaintiff s mother and the trustees over whether the trust should fund very expensive medical care ($30,000 for a 3 month stay) and a new car for the plaintiff, as well as the plaintiff s mother s mortgage. Daly AsJ held that the deceased s will was well motivated but misconceived, in that a life interest under the management of his aunt and cousin did not meet his needs now or his needs in the future, particularly in the event that he recovers and has a family. As the deceased had no obligation to provide for any other person, apart from his son, it was not appropriate to deprive him of an absolute interest in the assets of the estate, subject to appropriate safeguards. As this was not an application to remove a trustee, there was no reason for her

13 Honour to make findings that the executors should be disqualified from being trustees by reason of misconduct or incompetence. She held that the cash assets of the estate were to be managed impartially by the Senior Master s office to avoid conflict and because the office has the experience and expertise to assess and address the needs of someone as severely disabled as the plaintiff. Lewis v Every [2013] VSC 445 The deceased left a life interest in his $700,000 estate to his only daughter, his wife having pre-deceased him. The residuary beneficiaries were nephews and nieces. His daughter suffered ill health and was profoundly deaf from childhood. For 22 years she and her husband lived in a house purchased by the deceased and his wife. Her husband had retired 10 years earlier to become her full time carer after she had a heart attack. Part IV proceedings were commenced by the deceased s daughter and her husband for the entire estate. After the proceedings commenced the plaintiff daughter died, leaving the plaintiff son-in-law to continue the proceedings. The plaintiff son-in-law got by on a government pension and had no funds for a rainy day. He could not afford essential repairs to the house, which he continued to live in. The remaindermen nieces and nephews had varying relationships with the deceased and financial positions. Daly AsJ found that the plaintiff s claim could be classified as more than a carer s case. There was an enduring positive family relationship and financial dependence over several decades. She found that proper provision to him was a life interest in the house, with flexibility to enable him to secure alternative accommodation if necessary, plus setting aside $210,000 on trust to supplement his pension and to pay for repairs to the House. This left $260,000 to be divided between the beneficiaries, with $130,000 awarded to a niece who had a close relationship with the deceased and was in a precarious financial position. The other nieces and nephews were awarded $32,500 each. Lewis v Every (No 2) [2013] VSC 493 The Plaintiff sought the usual order for the costs of all parties to be borne out of the estate. Given that a life interest and a fixed capital sum had been awarded to the plaintiff, this meant the costs would be borne by the beneficiaries. The beneficiaries submitted that the plaintiff should pay their costs on an indemnity basis after the date of a Calderbank offer. The letter offered to transfer the house absolutely to the plaintiff, plus $100,000 absolutely plus costs of $30,000. This offer was valued at $250,000 in total. This was compared to the outcome at trial, being a life interest in the house plus a life interest in $210,000. Based on life tables, this outcome was valued at $166,000.

14 Daly AsJ found that the rejection of the offer was unreasonable. In determining what was just, Her Honour balanced the competing considerations of promoting early settlement against the potential injustice to the impecunious plaintiff. She ordered that the plaintiff s costs be paid out of the estate, but only insofar as the costs exceeded the costs already paid to the plaintiff s solicitors from the distribution already made to the plaintiff s deceased wife from the estate. The executor received his costs from the estate as he was required to participate in the proceedings. If it was not necessary for the executor to be present, then this should have been made clear prior to the trial.