\u201cGiven the size of the estate and the competing calls upon it, the assets cannot be considered as \u2018available\u2019,\u201d the judge said. \u201cThe court also does not consider that, if [the daughter] is not provided further provision for her retirement, she would be left destitute.\u201d<\/p>\n
The judge ordered the woman to pay about 70 per cent of the executor\u2019s total legal costs, estimated at the start of the trial at more than $120,000. The remainder of the executor\u2019s costs will be taken out of the estate.<\/p>\n
Mary-Ann de Mestre, principal of Sydney law firm M de Mestre Lawyers, is a lecturer in succession law at Macquarie University.<\/p>\n
She said that, in this case, the court noted the woman had few assets and relied on government support.<\/p>\n
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\u201cThat fact may influence cost orders \u2026 but it did not prevent the court from ordering the applicant to pay a portion of costs from her entitlement,\u201d de Mestre said.<\/p>\n
She said this was a significant decision on costs \u201cbecause it reinforces that the court will not automatically protect an unsuccessful applicant from cost orders simply because they are financially disadvantaged\u201d.<\/p>\n
\u201cIt also demonstrates that costs can be split: part to be paid by the applicant out of their entitlement, and part by the estate.\u201d<\/p>\n
Historically, some applicants seeking family provision orders \u201cassumed costs would be paid from the estate\u201d, de Mestre said. However, recent cases in NSW, including this case, suggested courts are more willing to \u201corder unsuccessful plaintiffs to pay costs from their own share\u201d.<\/p>\n
\u201cIn several decisions, NSW judges have signalled a cultural shift, noting that the era of \u2018open slather\u2019 family provision litigation at the estate\u2019s expense is over,\u201d de Mestre said.<\/p>\n
\u201cThe court expects merit-based applications aligned with financial need and moral obligation, not speculative claims encouraged by the prospect of estate funded costs.\u201d<\/p>\n
\u201cThere has been a marked increase in the number of family provision applications filed in the NSW Supreme Court [from 655 in 2005 to 996 last year],\u201d she said.<\/p>\n
\u201cFactors contributing to this trend include more blended and fractured families, greater awareness of family provision rights and economic pressures motivating claimants to pursue even modest estates.<\/p>\n
\u201cWith more claims being filed, there is heightened judicial awareness of the cumulative cost burden on estates. Courts have repeatedly expressed concern about litigation costs \u2018devouring the estate\u2019, especially in estates under $1 million.\u201d<\/p>\n
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The court would now encourage or direct the parties to attend mediation at an early stage to encourage resolution of cases before a trial and would refuse to make a family provision order in some cases where \u201cthe likely benefit is overshadowed by costs\u201d.<\/p>\n
In addition, the court had the power to make an order capping the legal costs that could be recovered by a successful party from the estate or from the opposing side, or in some cases the costs that may be incurred.<\/p>\n
\u201cThe purpose is to incentivise parties to keep legal expenditure proportionate to the size of the estate,\u201d de Mestre said.<\/p>\n