Sydney woman who went to court over $3m estate faces huge legal bill

“Given the size of the property and the competing claims to it, the assets cannot be considered ‘usable’,” the judge said. “The court also does not take into account: [the daughter] “If additional funds are not provided for his retirement, he will remain poor.”

The judge ordered the woman to pay about 70 percent of the bailiff’s total legal costs, which were estimated at more than $120,000 at the start of the case. The remainder of the executor’s expenses will be released from the estate.

Mary-Ann de Mestre, principal of Sydney law firm M de Mestre Lawyers, is a lecturer in probate law at Macquarie University.

He said that in this case the court noted that the woman had very little assets and relied on state support.

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“This fact may influence costs decisions… but it did not prevent the court from ordering the applicant to pay part of the costs within his rights,” De Mestre said.

He said it was an important decision on costs “because it reinforces that the court will not automatically shield an unsuccessful applicant from costs orders just because they are financially disadvantaged”.

“This also shows that the costs can be split: some will be paid by the applicant from his rights and some will be paid from his estate.”

De Mestre said some applicants in the past seeking family provision orders “assumed the expenses would be paid from the estate.” But recent cases in NSW, including this one, have suggested that courts are more willing to “order unsuccessful claimants to pay their share of the costs”.

“In many decisions, NSW judges have signaled a cultural shift, stating: de Mestre said the era of ‘open cut’ family provisions litigation, with the estate paying the costs, was over.

“The court expects merit-based applications consistent with financial need and moral obligation, not speculative claims spurred by costs financed by inheritance.”

“There has been a significant increase in the number of family assistance applications lodged with the Supreme Court of NSW [from 655 in 2005 to 996 last year]he said.

“Factors contributing to this trend include more blended and broken families, greater awareness of family provision rights and economic pressures motivating claimants to pursue modest estates.

“With more lawsuits being filed, judicial awareness of the cumulative cost burden on estates is also increasing. Courts have repeatedly expressed concern about the ‘estate swallowing’ of litigation costs, particularly on estates under $1 million.”

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The court will now encourage or direct parties to participate in mediation at an early stage to encourage pre-trial resolution of cases, and will refuse to make family provision orders in some cases where “the potential benefit is overshadowed by the costs.”

The court also had the power to make an order capping the legal costs that a successful party could recover from the estate or the opposing party, or in some cases the costs that could be incurred.

“The purpose is to encourage parties to keep legal expenses commensurate with the size of the estate,” De Mestre said.

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