•

IN RE HERBERT; ELDERS TRUSTEE AND EXECUTOR COMPANY LIMITED and anor -v- LAURENCE CHEONG AH TOY

Court of Appeal of the Northern Territory of Australia. Gallop, Kearney and Martin JJ.
2-6, 9 and 10 April; 28 August 1990.

APPEAL - review of findings of fact - function of appellate court when findings based on credibility of witnesses

COSTS - probate actions - principles applicable to exercise of discretion - costs usually follow event - exceptions - where suspicion that wills did not reflect true will of testators is caused by conduct for which beneficiary responsible - applicable principle to be determined on facts

COSTS - probate actions - significance in award of costs of number of counsel briefed and extent of examination of suspicious circumstances - sanction for excessive effort.

COSTS - probate actions - unsuccessful plea of undue influence - costs of this issue follow event except where reasonable to press the issue

PROBATE AND ADMINISTRATION - probate actions - costs - when costs of losing party may be paid out of estate - beneficiary responsible for suspicious circumstances which reasonably required enquiry
UNDUE INFLUENCE - requirements for presumption of undue influence to arise

Cases followed:
Nock v Austin (1918) 25 CLR 519
Wintle v Nye (1959) 1 All E.R. 552; (1959) 1 WLR 284
In the Estate of Fuld, dec'd (No.3) (1968) P.675 Tanner v Public Trustee (1973) 1 NZLR 68
Barry v Butlin (1838) 2 Moo.P.C. 480; 12 E.R. 1089
Tyrrell v Painton (1894) P.156
Fulton v Andrew	(1875) L.R. 7 H.L. 488

Westpac Banking Corporation v Spice (unreported, Federal Court (F.C.), 4 April 1990)

Chordas v Bryant (Wellington) Pty. Ltd. (1988) 20 FCR 91 Johnson v Buttress (1936) 56 CLR 113
Whereat v Duff (1973) 1 ALR 363 Child v Osment (1914) P.129
Goodacre v Smith (1867) LR 1 P&D 359
Mitchell v Gard (1863) 3 Sw.Tr.275; 164 E.R.1280
Orton v Smith (1873) LR 3 P&D 23
Smith v Smith (1866) LR 1 P&D 239 Wilson v Bassil (1903) P.239
Middlebrook v Middlebrook (1962) 36 ALJR 216 Spiers v English (1907) P.122
Brown v McEncroe (1890) 11 L.R. (NSW) Eq.134 Stanley v Phillips (1966) 115 CLR 470
Howell v Marsh (1906) 23 WN (NSW) 17
Liffe v Hedderwick (1922) 31 CLR 148

Cases referred to:
Norbis v Norbis (1986) 60 ALJR 335
Public Trustee v Hall (1937) S.A.S.R. 252
Woolf v Burman (1940) ALJ 431
Cretazzo v Lombardi (1975) 13 S.A.S.R. 4
Levy v Leo (1909) 25 TLR 717
Churchill v Badenochs Transport Ltd (1971) 1 SASR 63

Cases distinguished: Twist v Tye (1902) P.92

Summerell v Clements (1862) 2 Sw & Tr 35; 164 ER 1184; 32
L.J.	33, Prob.
Dwyer v Vindin (1906) 4 CLR 216
In re Cutcliffe's Estate (1959) P.6

Cases not followed:
Page v Williamson (1902) 87 L.T. 146

Counsel for the appellants:

Solicitor for the appellants: Counsel for the respondents:
Solicitor for the respondents:

B.M. Debelle Q.C.,
A.J. Besanko Cridlands
G.K. Downes Q.C.,
Bracher Mildrens

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•

IN THE COURT OF APPEAL OF THE NORTHERN TERRITORY OF AUSTRALIA

No. AP24 of 1989

ON	APPEAL	FROM	THE	SUPREME	COURT OF THE NORTHERN TERRITORY
BETWEEN:
ELDERS	TRUSTEE	AND	EXECUTOR COMPANY		LIMITED		and		RICHARD
GILMORE	HOWARD as executor	of the Estate of ALICE MARIE HOWARD
First Appellant

AND:
THE	PUBLIC	TRUSTEE	OF	THE NORTHERN TERRITORY OF AUSTRALIA
Second Appellant

AND:
LAURENCE CHEONG AH TOY
First Respondent

AND:
KOOLPINYAH STATION PTY LTD
Second Respondent

No. AP25 of 1989

BETWEEN:
IN	THE	WILLS	OF	OSCAR	SCHOMBURGK

HERBERT		and HERBERT	both

EVAN	SCHOMBURGK
late	of	Koolpinyah

Station Via Darwin in the Northern

Territory	of Pastoralists, Deceased

Australia,

AND	IN	THE	MATTER	of	the
Administration and Probate Act
BETWEEN:
ELDERS	TRUSTEE	AND	EXECUTOR COMPANY		LIMITED		and		RICHARD
GILMORE	HOWARD as executor	of the Estate of ALICE MARIE HOWARD
Appellant

AND:
LAURENCE CHEONG AH TOY
Respondent

CORAM: DATE: PLACE:

Gallop, Kearney and Martin JJ. 28 August 1990
Darwin

ORDERS OF THE COURT

The appeals against the judgment of 24 July 1989 in the two probate actions Nos. 118 and 119 of 1980 and in the inter vivos action No. 211 of 1985 are dismissed, and that judgment is affirmed.

The appeal against the judgment of 27 November 1989 in respect of the costs of the two probate actions Nos. 118 and 119 of 1980 is allowed, the orders made on that day with respect to the costs of those actions are set aside, and in lieu thereof.the following order is made:-

The respondent and the appellants are awarded their costs of the two probate actions out of the estates, to be assessed on indemnity basis.	Both respondent and appellants certified for more than one counsel.

The order made on 27 November 1989 that the costs of the trial be apportioned 50% to the two probate actions and 50% to the inter vivos action, is affirmed.

The order made on 27 November 1989 that the appellants pay the respondent's costs of the inter vivos action No.
211 of 1985, including reserved costs, is affirmed. Certified for more than one counsel, for the respondent.

The appellants are ordered to pay 50% of the respondent's costs of the appeals.	Certified for more than one counsel, for the respondent.

2.

REASONS FOR JUDGMENT
(Delivered 28 August 1990)
GALLOP J:

These appeals demonstrate the truth of the old aphorism "where there's a will, there's a relative".

On l October 1972 Oscar Schomburgk Herbert and Evan Schomburgk Herbert made identical wills appointing  the respondent and the testator's brother as Executors and trustees, and bequeathing their respective estates both real and personal to the trustees upon trust for the  brother for life, and upon the death of that brother for the use of the respondent absolutely. The wills also contained clauses investing the trustees with certain
powers	and	a	precatory	clause	that	the	trustees	and
beneficiaries should continue to carry on the pastoral business upon Koolpinyah Station under the business name  of Herbert Bros. for as long as may be practicable. Subsequent to the execution of the wills, the testators made certain dispositions which were intended to implement what was then known as a "Bray scheme".

Two actions were brought by the respondent for probate of the respective wills in solemn form of law and another action was brought by the Executors of the Estate of the late Alice Marie Howard and the Public Trustee of

the			Northern		Territory		to  set		aside	the		dispositions	made by	the	testators		as  the implementation of		the	Bray scheme and		for		consequential	orders.	The three actions were heard together				in	the	Supreme		Court		of		the		Northern			Territory. On			24			July		1989	the		learned	trial		judge		(Nader J. J granted  decrees  of  probate  in  solemn  form  of  law  of   both wills  and entered  a  verdict   for  the  respondent   in   relation to the dispositions inter vivos.

The Executor Marie	Howard	and	the Territory	have		appealed made.

of the Estate of  the  late Alice Public  Trustee  of   the   Northern  to this Court against the orders

At  the	trial		of the actions	the	two  wills	were contested				in			accordance		with	the		pleadings	on the	grounds of	lack		of		testamentary		capacity,	lack	of		knowledge		and approval		of	the wills by the respective testators and undue influence			and fraud	on the	part	of  the  present	respondent. In	the	third		action	the			inter vivos transactions were challenged on the grounds of fraud, undue influence and unconscionable  conduct  on  the  part  of  the  present respondent.   Whether   the   allegation  of  fraud  was pursued   at the  trial  is  relevant  to  the   question   of   costs.   It   was never  expressly  abandoned.   On   the    hearing  of  the  appeals to this Court the  only  challenge  in  relation  to  the  will actions  was  on  the  grounds of  lack   of   knowledge   and approval   by  the   testators.   In the appeal   in   relation  to the inter vivos transactions the challenges on the grounds

of	undue	influence maintained.

and	unconscionable	conduct	were

The  trial		of  the actions	extended	over		some		30 sitting	days	and	involved	a	vast		amount	of	oral	and

documentary	evidence.

In	his	reasons	for	judgment	the

learned	trial	judge	reviewed	all	the	evidence	and	made appropriate and relevant findings of fact.

Included	in			his		findings	were		the		significant events		in	the	respective	lives		of  the  testators,	including their	medical		histories.		He	traced		the		circumstances		in which	the		respondent		was introduced	to	the	testators	and recounted	generally,		and as		to		some	matters		particularly, the relations between them. He dealt in detail with the involvement of  the  respondent  in   the   testators'   business and legal affairs. HisHonour's findings were:

"On 23		March	1970,	Laurence		Cheong		Ah		Toy,	an accountant	practising		in Darwin,	was engaged		by		Evan as	accountant		to	replace  Frederick	Barry who	had		been admitted	to		hospital		and could		no longer	carry	on as the		Brothers'			bookkeeper.		In	March,	Richard			Charles Ward		(Ward),			a  solicitor and senior  partner  in   the firm of  Ward Keller  and  Rorrison,  telephoned  Ah  Toy and asked him to  act  as  accountant  for  the  Brothers. Ward was well regarded and liked by the Brothers and enjoyed  a  good reputation   in   the   community   in general.    He   was    active  in  polities.    He   later  became a judge  of  the  Supreme  Court  of  the  Northern Territory.   His name   is   now   integrated   in  the  history of the Northern  Territory. A  main  road  in  Darwin  has been named after  him:  Dick  Ward  Drive.  Later,  there was a time when the Brothers intended  making  Ward  the sole  residuary  beneficiary   under   their  wills.   I  have no  doubt  that,  for  Ward to  have  commended  Ah  Toy   to the brothers,  he  held  him  in   high  regard  both  as  to his  ability and  honesty:  two   qualities   that   Ward would have understood to be indispensable in the

s.

person who was to take care of financial matters for the Brothers.	It is likely that this respect had been earned  by Ah Toy.			Having an accountant to whom they were		referred		by		Ward,			and		who		came	to	show	such interest in their affairs, would certainly have been a matter of comfort and assurance to  the Brothers.		It is	vital		to a proper	understanding		of this case to remember	that		Ah		Toy		had	come	to		them	on	Ward's recommendation.			The fact tends to show that Ah Toy was		a	person		of		good			character,			and it tends to explain why the Brothers would have placed such faith in him. That, on 26 March 1970, the Brothers authorized Ah Toy to invest $40,000 on their behalf and handed to him a cheque for that amount to invest exemplifies their confidence."

The significant findings of fact were that the respondent became progressively more intimately involved in the business affairs of the testators and Koolpinyah

Station.
consultant.

He		became	the	brothers'	financial	adviser	and In financial		matters they came to rely upon

him	and	he	also	helped	them	in	respect	of	things	not associated with their financial affairs.

Ah	Toy	discovered	that	the	brothers	had	made

wills	in	1948. subject were:

His	Honour's	findings	of	fact	on	this

"On 24 March 1970, Ah Toy asked the Brothers whether they had current wills. It transpired, when the facts became known concerning the circumstances of the Brothers, that the question was timely and prudent. On 31 March 1970 the Brothers, at Ah Toy's request, authorized him in writing to inspect their wills held by the ES&A  Bank, Smith Street, Darwin. The authorities included a requirement that, after inspection, the wills be replaced in sealed envelopes and handed back to the bank for safe keeping.

Ah Toy discovered on inspection that the residuary beneficiary in each Brother was one, Pauline Murray (the Brothers' sister) who was then deceased. There is no evidence explaining why Ward had not himself discovered that fact: he was the Brothers'

lawyer and close friend. He knew one of them to be  old and frail, and both possessed of considerable property. That  it was Ah  Toy who made the discovery is to his credit, and must have created a favourable impression of him on the Brothers.

At the meeting with the Brothers on 2 April, Ah Toy, unprompted, raised the subject of their wills. After questioning them, he told them that they did not have 'effective wills' and that they should have wills drawn up as a matter of urgency. The Brothers had  made wills on 18 March 1948, each appointing the other as executor  Each left a life estate in all property to the other and the remainder to their sister Pauline. On 22 February 1960 the Brothers made codicils to their wills, substituting Ward as the executor in place of A.B. Newell, who had died."

There was a large body of evidence concerning the respondent's introduction of the testators to one Richard Kemp, who was a partner in the firm of Ward Keller and Rorrison, solicitors of Darwin, the legal advice given to the testators by Kemp at Koolpinyah Station on  10 May 1970, and their instructions in regard to the preparation of their respective wills. In the end the wills drafted by Kemp in accordance with those instructions were never executed. The trial judge could not determine whether it was because the testators could not decide on the ultimate beneficiary of their estate or because Ward did not want the responsibility of running a cattle station. He found that the brothers changed their minds between 10 May 1970 and 16 July 1970.

The draft wills contained provisions appointing Ward and his wife as trustees, authorising the surviving brother to manage and control the pastoral business during

his	lifetime	and		bequeathing		the	testator"s personal	property		to		Ward		and		his		wife	as common.		There	was	also	a	precatory	clause

real
tenants that

and
in the

pastoral	property	be	carried	on	for as long	as possible under the name "Herbert Brothers Koolpinyah Station".

The brothers were given independent legal advice at the suggestion of Kemp and  there was a meeting with Ward at the station on 28 June 1970.

The trial judge found that the respondent frequently concerned himself with the personal affairs of the brothers and was constantly  at hand to help them. They, for their part, valued the help and encouraged his propensity to interest himself in all their concerns. He found that the respondent was being drawn well into a vacuum of the personal and domestic lives of the brothers and that they had developed a sense of reliance on him. This sense of reliance, as His Honour found, did not amount to a sense of dependance. The respondent was willing and able to give assistance when required and it was more convenient to turn to him for help than elsewhere.

The respondent reminded the brothers of the need to make effective wills in writing on 16 July 1970 and orally on 19 September 1970 and some time after 6 October 1970. At their request he instructed a Darwin solicitor by letter of 28 October 1970 to obtain advice from his Adelaide office in respect of the brothers' estates and

a •

estate planning. Following a phone call by the respondent on 17 February 1971 the advice dated 26 February 1971 was received by the respondent and he gave them a copy of it when Evan next visited the respondent's Darwin office.

In April 1971 Oscar became ill. The respondent arranged for an appointment with Dr Lo, a friend of the respondent's family. Oscar was admitted to hospital. The respondent suggested that a solicitor be instructed to draw simple interim wills and at the brothers' request agreed to be executor and trustee.

At the respondent's request a firm of solicitors prepared wills urgently. Evan Herbert's will was signed in the respondent's office on 19 April 1971 and Oscar's, which was in the same terms, was signed at hospital on 20 April 1971. The respondent was present on  both  occasions. Evan's will appointed Oscar, Ward and the respondent as

executors and Oscar as sole beneficiary. in reciprocal terms.

Oscar's will was

The close relationship between the respondent and the brothers continued. The trial judge was satisfied that it was the respondent's practice to provide the brothers with copies of all letters and other documents that concerned them. Indeed, significant documents, including the two wills under challenge, were found in the brothers' desk at the homestead after their deaths in 1974. His Honour found that by October 1971 the respondent's prime

relationship with the brothers had become that of universal assistant, including accountant and financial adviser. He continued to be closely involved in the relationship between the brothers and their solicitors and they sought his advice constantly about many matters. They sought his help to compensate for those disabilities that were functions of their age and poor health.

Much of the correspondence and diary entries by the brothers are reviewed in the reasons for judgment. His Honour found that by about the middle of 1972 Evan Herbert was visiting the respondent in Darwin up to three times a week. During 1972 it was the respondent's practice  to visit the station at least once a month in relation to cattle sales and at least another visit during the month when special circumstances warranted it.

Against circumstances	in

that	background	His	Honour	traced	the which	the	brothers	executed	their

respective wills on 1 October 1972. He found  that in August 1972 the respondent, prompted by the fact of Evan's recent illness, raised again with Evan the matter of the brothers' wills. He reminded  Evan that the brothers had not made wills other than those made early in 1971, that they ought to consider the matter and talk to a solicitor about it. Evan requested the respondent to arrange for a solicitor to go to the station. The respondent suggested one Peter James, who was already acting for the brothers in commercial matters. He arranged for James to visit the

station on 10 August 1972, where there was considerable discussion  with  the  brothers  about  the  matter  of  wills.   rt  is  unnecessary  to  trace  in  detail   the   correspondence between James and the brothers,  the  further  consultations which His Honour found to have taken place and the advice given to the brothers by James.

His Honour found that on 22 August 1972 a meeting was  held  at  the  station  in  relation   to   the   pastoral business of the brothers. After the meeting  the  respondent asked the brothers whether  they  had  considered  any  more about  their  wills  and  who  their  beneficiary   was  to   be. They told him for the first time that he was to be their beneficiary.

The		respondent		informed	James		of	what	had happened		and		that he had told the brothers that  they  should see	James	independently	so		that	he could	satisfy		himself that		they		truly		wished	to	leave			the	estate		to	the respondent.				On	30		August		1972	the		respondent	and James visited	the brothers at the station. James  said  to  the brothers, in the presence  of  the  respondent,  "You  have chosen Lawrence  to  be  your   beneficiary.   I  need   to   talk  to you about it to make sure that that is what you wish". The respondent suggested it might  be  better  if  he  left  the meeting, which he did and wandered around  elsewhere  for  a while. He was not  present  when  James  received  instructions for the  wills  directly  from  the   brothers.   James   confirmed that they wanted the respondent as their ultimate

beneficiary and discussed other possible beneficiaries, such as the Howards and certain charities.

Oscar told James that they had dismissed the thought of making the Howard family their ultimate beneficiary because none of them had shown any interest in
the property and they could not rely on them to carry it on as a pastoral property. James spoke to the brothers about further stages of their estate planning and told them that he was giving consideration to a Bray scheme. He indicated to the brothers that he would prepare the wills as instructed, change the ownership of the real estate from joint tenancy to tenancy in common and proceed with further probate planning.

By letter dated 22 September 1972 James provided the respondent with a draft service agreement and a draft will for Oscar, which accorded in substance with the instructions received by James on 30 August 1972. It appointed the respondent and Evan as trustees, left the whole of Oscar's estate real and personal upon trust for Evan for life and after Evan's death upon trust for the respondent absolutely. The remaining two clauses of the draft will provided powers to the trustees.

It is unnecessary to set out the terms of the draft service agreement. It was supposed to reflect James' instructions that the respondent was to be employed as the manager of Koolpinyah Station on a part time basis during

•
12.

the joint lives of the brothers and on a full time basis during the life of the survivor of the brothers. The agreement is badly worded and it is doubtful whether that was the effect of the draft. It was a further term of the draft agreement that the brothers would execute wills substantially in the form annexed to the agreement. The respondent was not involved in any way in the drafting of the agreement, either its content or even its existence.

On 24 September 1972 the respondent took James' letter and the enclosures to the station and showed them to the brothers. In the course of discussing the documents on
24 September 1972 (or perhaps 27 September 1972) Evan told the respondent that they did not need the service agreement, that he was their accountant and they wanted him to continue in that capacity. The brothers noticed and remarked upon the omission from the draft will of an expression of their wish that Koolpinyah Station be continued as a pastoral property after their deaths. As a result of that intimation the respondent replied to James by letter dated 28 September 1972. He informed  him that the brothers had decided not to proceed with the documents, suggested certain minor amendments to the draft wills and proposed the precatory clause about the property being carried on for as long as possible under the name Herbert Bros. The respondent gave a copy of the letter to James to the brothers.

James regarded the respondent as agent for the brothers for almost everything. He asked  the respondent who the brothers' doctor was because he wanted a medical practitioner who was treating the brothers to witness the signing of the wills after speaking to them to ensure that they were fully aware of what they were doing. The main reason for this was that they were two old fellows, one of
86 and one of 68. The respondent suggested Dr Cox and said that he had treated both Evan and Oscar, whereas two other named doctors had treated only Oscar. James told the respondent that he wanted a doctor to witness the wills so that if they were challenged he would be able to make a declaration as to their mental competence. James told the respondent that he also wanted Dr Cox there because of the unusual situation of an accountant inheriting the brothers' estate and the large value of the estate. In answer to a direct question by the respondent, James told the respondent that he should get Dr Cox to go to the station on 1 October 1972 when the wills were to be executed. The respondent arranged for Dr Cox to attend accordingly.

The
evidence	of

learned	trial the	respondent,

judge James,

then		reviewed	the Dr	Cox	and	one

Watson-Brown

concerning	the execution

of the wills by the

brothers. wills	were

All those persons executed.	James

were was

at the station when the there	as	the	solicitor

acting for the brothers in connection with their wills.  Cox was there in his role as a medical practitioner to form some opinion as to the mental state of the brothers. In

fact he formed the opinion that both brothers were in full possession of their faculties and fully aware of the implications of the event. Watson-Brown was on a social visit to the station, but His Honour derived some assistance from the testimony of Watson-Brown, although he was not in the vicinity when the wills were signed, nor was the respondent.

His Honour found that a comparison of the testimony of the respondent with that of Cox itself dispelled any suspicion raised by the fact that Cox and the respondent were friends of long standing that Cox's evidence might have been in some way crafted to assist the respondent. He was convinced that it was not. Having considered all the evidence on the subject of the signing of the wills, His Honour concluded that the lack of agreement in many respects between the versions of the witnesses who were at the station on the occasion of the signing of the wills dispelled any suspicion that any two or more of them might have put their heads together to present an account favourable to the respondent.

In his carefully considered reasons for judgment the trial judge reflected upon his own natural suspicion, "indeed a strong one", throughout the hearing and for some time after it,about the respondent's motivation. He set  out the following factors pertaining to the respondent as being relevant to the creation of suspicion:

'

he was closely involved in bringing the wills into existence;
he was the accountant and financial adviser to the brothers as well as their universal assistant;
the brothers had become reliant on him in many
ways;
he urged the brothers to make the wills;
he had "enmeshed" himself into the very fabric of the solicitor/client relationship;
he was the sole beneficiary;
he	received	what	by	any	standard	was	a	huge bequest;
he made the arrangements	for the signing of the wills;
( i) he arranged  for Dr Cox instead  of Dr Bartlett,  who might arguably have been a more natural choice, to make a declaration as to the mental competence of the brothers;
Dr Cox believed he was there to witness the wills only as a friend of the respondent;
the respondent gave advice to the brothers in the nature of legal advice;
on request the respondent was able to borrow from the brothers sums of $10,000 and $15,000, which were substantial sums in 1971, with no documents and no security;
it appears that the respondent did not inform James of a letter from Thomson &  Co.,  solicitors, dated 26 February 1971 which at least

'

had	a	proposal	closer	to the	brothers'	desires than the ultimate wills and the Bray scheme;
the respondent acknowledged that the brothers did not receive independent advice "throughout the will matters"; and
the existence of the management agreement.

All those matters were considered by the trial judge and taken into account  on the issue of suspicion. But all the countervailing factors were also taken into account. Some of them, as found by the trial judge, were:

the brothers approved of what the respondent was
doing for them;
the brothers positively desired that the Howards should not benefit under their wills;
the brothers	themselves	requested	the respondent to instruct a solicitor for them;

( d)		the	respondent	was for		the	brothers,

the		help	constantly	at hand to	whom	little	considerate

attention was given by anyone else;
) he was not motivated by anything  more than good business practice  and  there  may  have been an added mixture of nobler motive spiced with the satisfaction of knowing that  his efforts were helping two old men  who  were having great difficulty helping themselves, and whom no one else was readily available to help;

,,  •	17 .

he passed to the brothers all letters and other documents concerning them;
James, as well as Richard Ward of Messrs Ward Keller, solicitors, was the solicitor for the brothers;
( h) the loan transactions show the respondent to be neglectful and lacking sense of good business practice rather than as dishonest;
) James saw the brothers on 10  August  1972; they discussed, inter alia, death duty and wills;
James wrote a long letter of advice to the brothers on 11 August 1972; the original letter was with the brothers' important documents, including copies of their wills, at Koolpinyah Station at the times of their deaths;
on 21 August 1972 the brothrs volunteered  to  the respondent that they wanted him to be their "beneficiary";

( l)		any	lack respondent

of	independence	of did	not	affect

James	from the	quality

the or

integrity of James' advice to the brothers;
the brothers were under no undue pressure to use the respondent as a conduit to their solicitors; they would have told the respondent if they had thought he was interfering;
on 30 August 1972 the brothers, at a meeting at which the respondent was not present, gave instructions for their wills direct to James,

including instructions that the respondent was to be their beneficiary;
( o) the respondent was not involved in any way with the draft management agreement, either its contents or even its existence;
Dr Cox had treated both brothers;
the respondent was not motivated by a desire to inherit the brothers' estate;
the fact that the respondent raised the subject of wills with the brothers a number of times was understandable;
) James was a person of personal  and professional integrity;
the brothers read the wills themselves;
the wills were prepared by their solicitor;
the changes made to the draft wills were, if anything, detrimental to the interests of the respondent;
a copy of the respondent's letter of instructions asking James not to proceed with the management agreement and requiring amendments to the wills was given to the brothers;
the wills were explained by James to the brothers;
copies of the wills were given to the brothers;
the	brothers	kept	their	wills	in	a	prominent place in the homestead;
(aa) the brothers were given other documents describing the contents of their wills, such as

the letter of 28 September 1972 and the opinion of Adams QC, which they kept;
(ab) both known previous wills which the brothers had made, namely the wills of 1948 and 1971, or had contemplated making, namely the draft will of 1970:-
benefited one ultimate beneficiary or family;
excluded the church and Aborigines;

( ac) the	wills	executed	on	1	October logical, simple wills;

1972	were

(ad) the	brothers	made	many	diary	notes	relating	to their wills.

Having considered all those facts tending to establish suspicion on the one hand and its removal on the other, the trial judge expressed his ultimate conclusion about suspicion in the following terms:

"I have no suspicion that the brothers did not know the effect of the instruments they were signing, or that they did not fully approve of them; in short, I am left with no suspicion that the instruments do not represent the true wills of the brother1,;. 11
His Honour's judgment read as a whole has the hallmarks of a careful and close consideration of the entirety of the evidence in the case. It demonstrates much thought and is the product of proper assessments of veracity and reliability of the various witnesses. The person upon whom suspicion fell was the respondent and the trial judge expressed his assessment of the respondent and

the other witnesses present at the time of the execution of the wills in the following way:

"Having observed Ah Toy in the witness box for several days,		for		much	of			which	he	was	most	searchingly cross-examined, and		having	since		read	several	times and considered his evidence, and having related it to the evidence	of other witnesses, I  am confident	not only that he did his best to answer questions honestly but  also that, during	the happening				of the relevant events,		he behaved	properly according to the measure of	his		understanding		of		his		obligations	in		the situations	in which  he was placed:			an understanding that was in truth somewhat limited.		It is easy to be critical		now, but I think it wrong, when considering his		credit			generally, to use as a yardstick sophisticated rules of conduct devised by the legal profession for lawyers. He must be judged in this respect by ordinary standards. Such persons not unreasonably expect to be guided by  legal practitioners of good repute. Ward Keller and Rorrison, and its member James, were such legal practitioners. The actions of Ah Toy giving rise to suspicion were largely the result of his not having been told that it was inappropriate for him to involve himself in the Brothers' affairs at certain critical times. I have already referred to James' behaviour in this regard. However, it is proper to say that,  having observed James in the witness box, I have no doubt of his personal and professional integrity in the matter. He was truthful, and I rely on him in respect of matters he could remember and matters he said he was sure about. Because James was not in the habit of taking notes, there are matters which he had forgotten: in such cases his lack of memory was manifest by his show of confusion and his expressed lack of recollection. Cox and Watson-Brown were clearly honest and reliable witnesses.''
Before turning to consider the knowledge and approval challenge to the execution of the wills, it is convenient to refer to the legal principles by which the trial judge was guided on that subject. He relied upon the High Court authority of  Nock  v.  Austin  and  Anor  (1918) 25 CLR 519 and the cases therein cited. In particular he cited the relevant law as succinctly set out

in	the	judgment	of	Isaacs	J.	at	p.52-8. passage in his judgment reads:

The	relevant

"The (1918) 25
down	by
[1894]	P
suspicious

High		Court		(Nock	v	Austin	and	Another CLR	519	at	p.--;5:-,2"3""°);-----a'--p-p----'rc..co.::cv.::ce..::d-;:-.:.::....w""'h---'a::.:tc:..::._w_a.:..,s=c,:1:.:.a i=d
Lindley   LJ   (Tyrrell   v    Painton at p.156) about a will executed under circumstances:

the	proper	question	for	a	Judge	to	ask

himself in view of such elements of suspicion is this: "Do the defendants affirmatively establish to my satisfaction that the testatrix knew what she was doing when she executed this will?": per Barton and Gavan Duffy JJ.

Their Honours (ibid, at p.542) quoted with  approval from another authority in probate relevant to this case:

... we may as well quote the terse statement of  the principle by Sir Samuel Evans  in the case of In the Estate of  Osment,  [1914]  P  at  p.132: "It is well established that if a party writes or prepares a will under which he takes a benefit, that is a circumstance that ought generally to excite the suspicion of the Court and cause it to be vigilant and jealous in examining the evidence in support of the instructions for the will; it ought not to pronounce  for the document  unless the suspicion is removed, and it is judicially satisfied that the paper propounded does express the true will of the deceased. That is the principle "'

In Nock, instructions were taken  by one executor, the will was drawn by the other, both of whom were large beneficiaries in proportion to the whole of the estate.
Isaacs J (ibid, at p.528) said:

'The	relevant	law	is	not	doubtful. thus stated:-

It	may	be

)      In   general,   where   there appears  no circumstance   exciting   suspicion that   the  provisions  of  the  instrument  may not have been fully known  to  and  approved  by the testator, the mere proof of his capacity and  of the fact of due execution of the instrument creates an assumption that he knew  of  and assented to its contents

(Barry	v	Butlin	2	Moo F u l t o nc:.._v..:_ A n d r e=w LR 7 HL 488)

PCC	at	p.484;

)  Where  any  such  suspicious circumstances exists, the assumption does not arise, and the proponents have the burden of removing the suspicion by proving affirmatively by clear and satisfactory proof that  the testator knew and approved the contents of the document (Baker v Batt 2  Moo  PCC  317  at p.321;  Tyrrell  v Painton  [ 1894]  P  151; Shama  Churn  Kundu   v Khettromoni   Dasi   LR 27 Ind App 10 at p.16)

If in such a case the conscience of the tribunal, whose function it is to determine the fact upon a careful and accurate consideration of all the evidence on both sides, is not judicially satisfied that the document does contain the real intention of the testator, the Court is bound to pronounce its opinion that the instrument is not entitled  to  probate  (Baker  v  Batt  2  Moo PCC at p.320; Fulton v Andrew LR 7 HL 448)

The circumstance that a party who takes a benefit wrote or prepared the will is one that should generally arouse suspicion and call for the vigilant and anxious examination by the Court of the evidence as to the testator's appreciation and approval  of the contents of the will (Barry v Butlin 2  Moo  PCC  480,  and  Fulton  v  Andrew LR 7 HL 448; per Lord Shaw in Low v Guthrie [1909] AC 278 at p.284)

( 5)	But	the	rule	does	not	go

further	than

requiring	vigilance		in seeing			that fully	proved.		It	does		not disqualification	(per	Lord	James Guthrie [1909] AC at pp.282-283)

the case is introduce	a
in	Low	v

(6) Nor does the rule require as a matter of law any particular species of proof to satisfy the onus (Barry v Butlin 2 Moo PCC at p.484)'''

The submission on behalf of the appellants was that the trial judge misdirected himself as to the burden of proof on the proponent of a will where there is suspicion as to whether the testator knew and approved the contents of the will. The correct test, so it was submitted, is that the proponent of a will bears the onus

'

of proving that the testator had testamentary capacity and knew and approved the contents of the will. As  to knowledge and approval, where there are no suspicious circumstances, the mere proof of testamentary capacity and of the fact of due execution of the will, creates an assumption that the testator knew and assented  to the will. Where, however, suspicious circumstances exist, the assumption of knowledge and approval does not arise and the proponent has the burden of removing the suspicion by proving affirmatively by clear and satisfactory proof that the testator knew and approved the contents of the document.

This challenge to the trial judge's directions to himself must fail.			That he applied the proper principles as	to	burden	of	proof	and		standard		of	proof		where suspicious circumstances exist is apparent from his citing relevant passages		from the judgments of the High Court in Nock		v.		Austin		above,	which	refer	to	relevant	earlier authorities.

Next it was submitted that the trial judge failed to direct himself that the degree of suspicion will vary with the circumstances of the case but in all cases the court must be vigilant and jealous; that according to circumstances, a very heavy burden might have to be discharged; that if the conscience of the court, after careful and accurate consideration of all the evidence, is not judicially satisfied that the document contains the

real	intention	of		the		testator,		the	court	is		bound	to decide that the will is not entitled to probate; and that the court should not grant probate without full and entire satisfaction	that	the	instrument	is	the	freely	expressed will of the testator.

In	support	of	this	submission	counsel	for	the

appellants	relied	upon

Wintle

v.	Nye

(1959)

1	AER

552;	( 1959)	1	WLR	284;

In	the	Estate	of	Fuld

(1968)

p.675 and Tanner v. Public Trustee (1973) 1 NZLR 68.

Wintle v. Nye was  a  case  concerning  a will and codicil by an elderly woman unversed in business. She signed a will and subsequently a codicil prepared by her solicitor, who was not an intimate friend. The solicitor was named as sole executor, and after provision had been made for various legacies and gifts, he was to take the residue, which amounted to the bulk of her large estate. The will was complex; she was not independently advised, and no copies of the documents were given to her. The validity of the will and codicil was challenged on the ground that she did not know or approve of the contents but no allegation of fraud was made in the pleadings.  There was no evidence but that of the solicitor as to the instructions given by the testatrix. Counsel for the appellants relied particularly upon the following passage from the speech of Viscount Simonds where his Lordship approved of the principles enunciated by  Parke  B. in Barry v. Butlin (supra) and went on:

"It is not the law that in no circumstances can a solicitor or other person who has prepared a will for a testator take a benefit under it. But that fact creates a suspicion that must be removed by the person propounding the will. In all cases the court must be vigilant and jealous. The degree of suspicion will vary with the circumstances of the case. It may be slight and easily dispelled. It may, on the other hand, be so grave that it can hardly be removed."

In the Estate  of  Fuld,  Scarman  J.,  as  he  then was, referred to the two types of safeguards in will cases. He said the first type of safeguard is part of the substantive law - the requirements of proper form and due execution. He said they are the first line  of defence against fraud upon  the  dead.  He then went on to discuss the second type of safeguard as the second  line  of  defence. He said:

"It is invoked where there are circumstances which give rise to suspicion; it is the safeguard of strict proof. In cases where no suspicion reasonably arises the court will allow inferences - presumptions as they are sometimes called - to be drawn from the regularity of a testamentary instrument upon its face, or the fact of due execution. But if there are circumstances, whatever be their nature, which reasonably give rise to suspicion, the court must be on its guard. It must ensure that the burden of proof rests upon the party propounding the will: and 'he must satisfy the conscience of the court that the instrument so propounded is the last will of a free and capable testator'.''

In Tanner v. Public Trustee the New Zealand Court of Appeal followed the above cases and the principles set out therein, which it described as well settled rules of law.

It is not apparent from the trial judge's reasons for judgment that he misdirected himself in that he failed to be "vigilant and jealous". The above cases lay down the principles of law and there are several passages in the reasons for judgment which demonstrate that he did decide the matter by the correct approach in applying those principles.   First,  he incorporated  passages  from cases
using the phrase "vigilant and jealous" as set out above.

He	cited	Barry	v.	Butlin	in	the

passage

from	the

judgment	of	Isaacs	J.	in	Nock	v.	Austin.	In
Barry  v.  Butlin,  Parke  B.  said  that  the  first  rule is that the onus probandi lies in every case on the party propounding the will. The second is that if a party writes or prepares a will, under which he takes a benefit, that is a circumstance that ought generally to excite suspicion and calls upon the court to be vigilant and jealous in examining the evidence in support of the instrument. He referred also to the need for clear proof of the knowledge of the testator of the contents of the will by additional evidence, meaning evidence independent of the person on whom the burden is cast. It is quite clear that the trial judge applied those principles and went on to say that commonsense itself demanded a careful examination of the facts to see whether the continuation of the suspicion was justified. He referred to his own strong natural suspicion throughout the hearing and for some time afterward, and determined that the suspicion had been entirely dispelled after taking into account all the relevant facts.

Tyrell			v.			Painton			and			Fulton		v. Andrew	(both		cited			by		the	High	Court			in		Nock		v. Austin)		relied		upon		by	counsel		for		the	appellants	are examples			of	the	operation	of		the		rule		in	Barry		v. Butlin.		They do not lay down any new principles. The failure of the trial judge to refer to them expressly did
not amount to a misdirection, provided he did require additional affirmative evidence to remove the suspicion which  he found  to exist.   Wintle  V.   Nye   was likewise an example of the operation of the principles laid down in Barry v. Butlin with the added proposition  that  the degree of suspicion will vary with the circumstances of the case; it may be slight and easily dispelled; it may, on the other hand, be so grave that it can hardly be removed.

The appellants' submission that, having found suspicion, his Honour decided that the suspicion was removed on the evidence of the respondent alone and the drawing of inferences from that evidence does not bear examination. He required additional affirmative evidence and was satisfied to the requisite degree after examining that evidence vigilantly and jealously as he was required to do.

Amongst relevant findings were that James had already acted as a solicitor for the brothers at the time the respondent suggested that they should consult him about their wills in August 1972. The initial choice of James as a solicitor in commercial matters was made by Ward, not the

respondent. The respondent spoke to James and arranged for him to visit the Station on 10 August 1972 and he did so on that day. James took instructions from the brothers about
their wills and gave them certain oral advice, which was reviewed in his Honour's judgment.
His Honour considered a submission on behalf of the appellants that James lacked independence from the respondent and concluded that James was not totally independent. He was satisfied, however, that the lack of independence did not diminish the brothers' understanding or approval of their testamentary actions; that James had no actual interest to assist the respondent to become the brothers' beneficiary, and indeed would have preferred a different decision by the brothers. His Honour had no  doubt that any lack of independence of James from the respondent did not operate to affect the quality or integrity of James' advice to the brothers.

His Honour next considered in close detail the explanation of the terms of the wills by James and the evidence of Dr Cox based upon his observations and conversations with .the brothers that they knew what they were about and were able to execute wills and were fully aware of the implications of the event. He concluded that James and Cox saw each will signed and that a comparison of the testimony of the respondent with that of Cox should itself dispel any suspicion raised by the fact that Cox and the respondent were friends of longstanding, that Cox's

•	29•

evidence might have been in some way crafted to assist the respndent.	He was convinced that it was not.

His Honour made positive findings that the brothers read the wills themselves before  executing them and that James gave them copies of their wills. His conclusion that suspicion was removed was fortified by the fact that the copy wills and other  important documents  were found at the Station after the brothers' deaths. He deduced that, copies of the wills having been left, the brothers were able to discuss the wills with Ward or anyone with whom they wished to confide.  Later the copy wills  were taken away and came into the possession  of  Mrs Howard. Thus there was considerable evidence additional to the respondent's to displace the suspicion.

It was further submitted on behalf of the appellants that the onus of removing the suspicion  could not be discharged if the evidence of Ah Toy was  not accepted and he should not be accepted, so the submission went, as a witness of truth. It was submitted tnat in the circumstances of this case, this Court could reach its own conclusion as to his credit. A number of submissions were put as to why he should not be so accepted.

This submission fails in limine. The well established principles  by which an appellate court should be guided in reviewing findings of fact based upon the credibility of witnesses as found by the trial judge has

30.

recently been reviewed by the Federal Court in Westpac Banking   Corporation   v.   Spice   (unreported  judgment
delivered	4	April	1990).	In  that case, as  in the case
under review here, the demeanour of the witnesses and the manner of giving their evidence were of importance. The very submission on behalf of the appellants is founded upon a recognition of the importance of credibility of the witnesses at the trial. Wilcox and Burchett JJ. recapitulated the relevant principles:
11 For Australian courts, the fundamental decision is Paterson v. Paterson (1953) 89 CLR 212. There Dixon C.J. and Kitto J. reviewed the authorities,
citing at 222 the warning of Lord Sumner in S.S. Hontestroom v. s. s. Sagaporack  [1927]  A.C.  37  at 47:

'Of course, there is jurisdiction to retry the case on the shorthand  note    None the less,  not to have seen the witnesses puts appellate judges in a permanent position of disadvantage as against the trial judge, and, unless it can be shown that he has failed to use or has palpably misused his advantage, the higher Court ought not to take the responsibility of reversing conclusions so arrived at, merely on the result of their own comparisons and criticisms of the witnesses and of their own view of the probabilities of the case. The course of the trial and the whole substance of the judgment must be looked at, and the matter does not depend on the question whether a witness has been cross-examined to credit or has been pronounced by the judge in terms to be unworthy of it. If his estimate of the man forms any substantial part of his reasons for his judgment the trial judge's conclusions of fact should, as I understand the decisions, be let alone.'

Their		Honours	also		cited	at		224	three from	the	speech	of	Lord		Thankerton Thomas v. Thomas [1947] AC 484 at 487-488:

propositions in	Watt	or

'I. Where a question of fact has been tried by a judge without a jury, and there is no question of misdirection of himself by the judge, an

,.
31.

appellate court which is disposed to come to a different conclusion on the printed evidence, should not do so unless it is satisfied that any advantage enjoyed by the trial judge by reason of having seen and heard the witnesses, could not be sufficient to explain or justify the trial judge's conclusion;

The appellate court may take the view that, without having seen or heard the witnesses, it is not in a position to come to any satisfactory conclusion on the printed evidence;
The appellate court, either because the reasons given by the trial judge are not satisfactory, or because it unmistakably so appears from the evidence, may be satisfied that he has not taken proper advantage of his having seen and heard the witnesses, and the matter will then become at large for the appellate court •

Dixon C.J. and Kitto J. held in Paterson v. Paterson (at 224) that the High Court 'must abide by the finding of [the trial judge) unless  it is vitiated by the erroneous admission of [certain evidence).' This was because of the importance of the trial judge's assessment, not only of the general credibility of the witnesses, but also of the reliability of their detailed observation. However, their Honours held that a serious question was raised by the admission at the trial of inadmissible cross-examination, putting before the trial judge a letter which 'was not an admissible medium of proof of any fact that it stated or that could be inferred from the statements or expressions it contained. ' Dixon
C.J. and Kitto J. concluded at 225-226:

'But in the end we have come to the conclusion that the learned judge's findings would have been exactly the same, had he disallowed the cross-examination. We are not here dealing with the verdict of a jury, the reasons for which are not known. The learned judge has stated his reasons in full, and while it certainly cannot be said that nothing deduced from that part of the cross-examination enters into the reasons his Honour gives, it can safely be concluded not only that what he so deduced did not form an indispensable part of his opinion or of the process by which it was formed, but that all the other elements in the case, had this one been excluded, would have led him exactly upon the same path to the same result. In these circumstances it would not be right to order a new trial on the ground that the

•
32.

cross-examination admitted.'

in	question	was	wrongly

In Watt (supra) at 491 Lord Macmillan  referred to other kinds of defect in a judgment accepting the evidence of a particular witness or witnesses. He said:

'The judgment of the trial judge on the facts may be demonstrated on the printed evidence to be affected by material inconsistencies and inaccuracies or he may be shown to have failed to appreciate the weight or bearing of circumstances admitted or proved or otherwise to have gone plainly wrong.'

But at 492 Lord Simonds, who was 'satisfied that an appellate court having none of those advantages which the trial judge enjoyed of hearing and observing the witnesses, was not justified in concluding that he was so clearly wrong that their judgment of facts should be substituted for his', stated an important qualification upon the use which may be made in an appeal of alleged defects in the trial judge's judgment. He said:

'Relying on the testimony of certain witnesses called on behalf of the respondent ... [counsel] said that the learned Lord Ordinary had come to a conclusion which was diametrically opposed to that testimony, yet he had not explicitly stated that he did not accept them as witnesses of truth nor indeed, made any adverse comment upon them. Your Lordships were therefore invited to find that the learned judge had forgotten or ignored this evidence and to hold that his judgment was thereby vitiated. I believe this to be fundamentally unsound criticism. The trial judge has come to certain conclusions of fact; your Lordships are entitled and bound, unless there is compelling reason to the contrary, to assume that he has taken the whole of the evidence into his consideration. If his conclusion is inconsistent with the evidence of certain of the witnesses but he does not, in terms, stigmatize them as false witnesses, it is not the proper or necessary inference that he has forgotten or ignored them

Cf. Jones v. Hyde (1989) 63 ALJR 349 at 351-352.

33.

It is important to remember that what  Lord Sumner in S.S. Hontestroom (supra) at 50 called 'imperfections in form and expression' are not sufficient to destroy the commanding advantage enjoyed by the judgment of a trial judge on questions of credibility. They are not to be equated with the 'specific misunderstanding or disregard of a material fact' which in the same passage was identified as a
matter which might lead to the overturning	of such a judgment.

The effect of identified defects in a trial judge's judgment was also considered by the House of Lords in Powell v. Streatham Manor Nursing  Home [1935) AC 243, where at 257 Lord Macmillan, citing an earlier speech of Lord Loreburn L.C., referred to 'misapprehension' or 'miscarriage' at the  trial. After emphasizing the trial judge's advantage, Lord Macmillan said:

'My Lords, I should nevertheless be ready to differ from the decision of Horridge J. if the criticisms to which it has been subjected in the Court of Appeal and at your Lordship's bar had carried conviction to my mind that he had gone wrong.'

In the

the same matter

case,	Lord resolved

Atkin itself

at	254-255
into	an

held issue

that
of

credibility, and said:

'[The Court) must recognize the onus upon the appellant to satisfy it that the decision below is wrong: it must recognize the essential advantage of the trial judge in seeing the witnesses and watching their demeanour. In cases which turn on the conflicting testimony of witnesses and the belief to be reposed in them an appellate Court can never recapture the initial advantage of the judge who saw and believed.'

Nevertheless, 'on the rarest occasions, and in circumstances where the appellate court is convinced by the plainest considerations' it may be justified in rejecting a view of a trial judge on credit for which 'there is no  satisfactory  reason shown' (see Yuill v. Yuill [1945) P 15 at 19, 21).

In	Brunskill Insurance		Co.	Ltd joint	judgment		of

v. Sovereign Marine & General (1985) 59 ALJR 842  at  844,  a the High Court reiterated 'the

distinction		which		exists		between	an		appeal	on a question	of fact which depends upon a view taken of conflicting testimony, and an appeal which depends on inferences	from	uncontroverted facts.'			Having found that	the		trial		judge's	conclusion	was	based	on credibility, the court said:

'The	question		that	then	arises	is	whether decision	of the learned trial  judge can be to	be		clearly		wrong	on		grounds		which		do depend merely on credibility; for example, on ground	that the evidence which was accepted inconsistent	with	established	facts	or glaringly improbable.'

the seen not the was was

This is to raise the hurdle which the appellant must overcome to a level well above the mere identification of some error in the course of the trial or the judgment. The decision must be seen to be clearly wrong before the appellant  can  succeed.  Cf.  Uranerz (Aust.)  Pty.  Ltd.  v.  Hale  (1980)  54  ALJR 378 at 381.

The questions involved where a finding on credibility is truly marred by some error are summarized in the judgment of Bray C.J. in Churchill
v. Badenochs Transport Ltd (1971) 1 SASR  63  at 64-65. Bray C.J. referred to 'the duty of a Court of Appeal when it appears that the trial judge in a trial without a jury has misapprehended the facts or committed some error in reasoning.' He said:

'First of all, of course, mere infelicities of expression or slips of the tongue have  no effect. Some latitude of construction should be applied, particularly to an extempore judgment. It is the reasoning of the court not its mode of expression, which is under appeal, though judges like other people must be taken, prima facie at least, to mean what they say....

But it may be clear that the trial court has misapprehended the evidence or that its reasoning contains a non seguitur. If  this  relates  merely to a peripheral or incidental matter which could have had no effect on the final result, once again it may be ignored. If it relates to a matter vital to the conclusion reached, then that conclusion cannot stand. What, however, if the mistake played some part in the reasoning leading to the conclusion but, nevertheless, the same conclusion might well have been reached without it? ...

I think that in a case like this we have to interfere once we are satisfied that there are errors of fact or reasoning in the reasons for judgment of the learned Special Magistrate which could have affected the result, unless we think
that substantial justice has nevertheless been done.'

In these statements of principle the word 'clear', or some equivalent expression, keeps recurring. Whatever shifts of emphasis may have occurred to accommodate the differing key features of particular cases, it must always be clear, if a decision on credibility is to be overturned, that its acceptability has been destroyed by the revelation of some serious and demonstrable error."

The same principles were stated earlier by the Federal Court in  Chordas  v.  Bryant  (Wellington)  Pty  Ltd (1988) 20 FCR 91 at 99-100.
Applying those well established principles, there is no basis for interfering with the trial judge's assessment of the respondent as a witness of truth and it is unnecessary to consider further the extensive criticisms of him advanced on behalf of the appellants. Nor is there any basis for reversing the trial judge's findings of fact founded upon his assessment of the credibility of the respondent and the other witnesses.

Inter vivos transactions

The events	giving rise to the execution	of the documen'  ts	constituting	the Bray scheme commenced with the
introduction	of James		to the brothers	by the respondent. The	first	visit	by	James	to	Koolpinyah	Station	was	on
10 August 1972.	The respondent was present.	It is to be

noted,		however,	that		James	was	already	acting		for	the brothers			in		certain	commercial	matters.		At	that	first meeting		James			had		some		discussion		with		the			brothers	about their	wills	and "about		their	problems	with		death	duties". It	was James'		advice that the  brothers  should  do  something to relieve the death  duties  which  would  be  incurred, especially  by  the  surviving  partner. He  advised  them  that to mitigate their  problem  the  brothers  should  change  the tenure of  the  property  from  joint  tenancy  to  tenancy  in common and each of them should leave the other a life

interest	in	his	separate	estate. avoid double duty.

This,	he	said,	would

James said in evidence that  on  the  way back  to Darwin with the respondent  he  suggested  that  the  best  thing for the brothers would be a Bray scheme which would considerably  reduce  the  death  duty   problem.   He   said   he told the respondent about the scheme and a 1968 High Court decision.  James  confirmed  his  advice   in   a  long  letter  to the brothers dated  11 August  1972,  which  is  set  out  in  full in the judgment. The  trial  judge  was  satisfied  that  the letter   had been   received   by   the   brothers   shortly   after 11 August 1972.

On  16 August  1972  the  respondent,  at   the  request of  Evan,  visited  the  station  and asked   them   in   the   course of discussion whether they had considered James'  letter  of 11 August 1972 and whether there were any questions they wished  to  ask.	The brothers told him they were still

considering it. It was shortly after that visit that the brothers told the respondent that they intended to make him their beneficiary. I have already referred to the findings of fact in that respect.

The next event of significance is the visit by the respondent and James to the station on 30 August 1972. By then James knew that the brothers had chosen the respondent to be their beneficiary and he wished to discuss that matter with them. The respondent left James and the brothers together so that they could discuss the matter in his absence. In the course of that discussion James spoke about the further stages of their estate planning and told them that he was giving consideration to a Bray scheme. In the context of the circumstances surrounding the draft service agreement, the trial judge found that the end the brothers sought to achieve was the continuance of Koolpinyah Station after their deaths and that all else

was	subordinate respondent	their

to	that	end, beneficiary,	the

including	making implementation	of

the the

Bray	schem,	and	the	attempt,	however	ineffectual,	by
James, to devise an agreement that would oblige the respondent to devote himself to the running of  the station. He found that an understanding of the brothers' paramount aim was the key to understanding all that they did.

station.

The wills were executed on 1 October 1972 at the Before leaving, James told the brothers that he

would	be writing	to them or the respondent in connection

with further plans for "probate planning". remember	whether	it	was	then	or	later

James could not but	he	obtained

approval	to	proceed	with	his	plans	to obtain an opinion
from a Perth barrister. James was concerned that  he himself was not an expert in the field and in view of the size of the property he wanted his proposals to have the backing of learned counsel.

Subsequent		to discussion	between	the

1 October	1972		and	after further respondent		and	the	brothers,	the

respondent wrote to James with financial and other details to assist counsel in the preparation of the opinion. On 13 October 1972, the same date as the respondent had written

to	James,
The	opinion

James	requested	counsel's	opinion	by	letter.
of	senior	counsel	dated	26 October	1972	was

received by James and he gave the opinion to the respondent some time before 6 November 1972. James supplemented counsel's opinion with a letter to the respondent dated 6 November 1972.

A	meeting	of	the	proposed	directors	of	the company to be formed was held in the respondent's office on
8 November 1972. The brothers, James and the respondent were present. Counsel's opinion was tabled, as was the memorandum of association, and minutes of the meeting were kept. Oscar and Evan were allotted one "A" class share  each and were appointed directors. Oscar was appointed Chairman.   The respondent was appointed Secretary  and his

office was to be the registered office of the company. The trial judge set out in his reasons for judgment a summary of the effect of the memorandum and articles of association and the allotment of shares.

The second meeting of the directors took place at Koolpinyah Station on 11 November  1972.  The brothers,  the respondent and James were present. A number of agreements were signed on or about 11 November 1972, being agreements involving the sale of land by the brothers to Koolpinyah Station Pty Limited and  loan  agreements between the brothers and the company, all of which were in evidence.

Between 11 November and 30 November the respondent visited the counsel who had prepared the opinion in Perth. A further meeting of the company was held on 30 November 1972 when agreements for the sale and purchase of cattle, horses and plant were approved. The minutes of the meeting were in evidence. The brothers and the respondent were present, James was not. The respondent was allotted
100 "C" class shares at a meeting of the directors of the company held on 8 February 1973. The brothers and the respondent were present, James was not. The minutes of the meeting were in evidence.

The trial judge was satisfied that the respondent did not exercise any undue influence or coercion in the relevant sense in relation to the execution of the Bray

scheme documents. It is important to note  the trial judge's approach to those issues as set out in the following passage in the judgment:

"It is not possible to divorce the factors that caused	the dispositions		inter		vivos to be made from those that led to the making of the wills.		They were essentially the same factors.		The considerations that influenced		the	Brothers			to		choose		Ah	Toy			as	their testamentary			beneficiary			are			the			very		same		that persuaded	them to make all dispositions			necessary to effect	the		Bray		Scheme.				Neither	was		done			for		the ultimate purpose of benefitting Ah Toy although each, incidentally,	did so.	The making of wills favouring Ah Toy and		the giving of effect to the Bray Scheme were means to the end desired, namely, the carrying on of Koolpinyah Station  as a pastoral  enterprise for as long as possible after the death, first, of one brother, and then after the death of the other. It  was not enough that their property should go to a person who was ready and willing to execute the Brothers' wishes in that respect; it was also necessary that the conditions should exist to make it possible for that person to do so. Those conditions included the existence of sufficient capital to carry on the enterprise.  A major threat to the fulfilment of that condition was the possibility of having to pay a considerable sum of money in duties.

Therefore, when considering whether the dispositions inter vivas were made as a result of undue influence, this exceptional circumstance should be kept in mind, namely, that those dispositions were essentially subordinated to the desired end that the pastoral operations of Koolpinyah Station should be enabled to be carried on for as long as possible after the deaths of the Brothers. In this respect the dispositions differ from one made for no other reason than to benefit the donee either out of gratitude or for some similar purpose."

The trial judge held that notwithstanding the great body of evidence relating to the respondent's conduct and the attack upon him by the Howard family, there was no credible evidence suggesting impropriety in any relevant sense. He was affirmatively satisfied by the evidence that the respondent did not unduly influence the brothers either

by	reason of his	relationship

,..

,	:.hem or	by	reason of his

conduct.	He held that, regardless of where  the  onus  of proof  lay,  if  the  onus  properly  rested  upon  the   respondent it had been adequately discharged.

It	was submitted on behalf	of the	appellants that on  the			facts			found		by	the	trial	judge,		a		presumption	of undue  influence  arose.		In addition to the foregoing  events the	appellants    relied	upon  a numbe of	significant matters, including   that   only  three  days  after the respondent	had met the		brothers		they	entrusted		a	sum of		$40,000	to		him to invest	on  their	behalf;		the  brothers	were in			poor physical health		by  any  standard;		and the respondent had enmeshed himself in all the brothers'  affairs  legal,  business  and  personal, and frequently  visited  the  brothers  at  their property.

The appellants also relied upon James' lack of independence from the respondent and failure to give full independent advice to the  brothers  about  the  Bray  scheme. The submission was that the Bray scheme was implemented almost without reference to the brothers other than as signatories  to  the  necessary  documents;  the  documents  were all  prepared  by  the  respondent  and  James;  the  respondent had arranged  for  valuations;  the  "C" class  allotment  of shares was made to  the  respondent  without  reference  to  James; the respondent had an intimate connection with each step in the Bray scheme, even to the extent of personally attending on senior counsel in Perth; and in all the

circumstances it could not be said that the Bray scheme was
the freely implemented action of the brothers.

The submission that a presumption of undue influence arose does not bear examination in the light of the trial judge's findings of fact. A presumption of undue influence can only be established if at the relevant time the subservient party was in a "relationship  of influence". Such a relationship may be deemed to exist simply on the proof of a known relationship such as solicitor/client, child/parent and guardian/ward.

Additionally, a	matter	of

a relationship of influence may be proved as fact	where	one	party	occupies	or	assumes

towards	another	a	position	naturally	involving	an
ascendency or influence over that other, or a dependence or trust on his  part (Johnson  v.  Buttress (1936) 56 CLR  113 at 134).

The trial judge found as a fact that the requisite relationship of influence did not exist. There are a number of findings throughout the judgment to that effect, namely:

) The brothers were quite capable  of  telling the respondent to mind his own business.
) The brothers had direct communication  with Ward and James to whom they might have conveyed any disquiet they might  have been experiencing by

reason judge

of the respondent's conduct. rejected	a	submission	that

The	trial the	brothers

were in some way under undue pressure to use the
respondent as a conduit to their solicitors regardless of their wishes. In general  they found it convenient and useful to do so.
( 3) There was no reason to think that an inquiry by the respondent about the brothers' wills was prompted by improper hope of gain. If they had wished to, the brothers could have told the respondent that their solicitors had the matter in hand and that his services in that regard were not required. They were quite capable of doing so. If the brothers had not seen some benefit in the respondent's concern about their wills, the trial judge was in no doubt that they would have told him not to bother himself with them.
The brothers were not in the least subservient to or dominated by the respondent, although the respondent may have exercised influence over the brothers in the way they managed their business; there was no dominance by the respondent or servience on the part of either brother. The trial judge was convinced that if there was a servient party in that relationship it was the respondent. The brothers indeed looked to him as to others for advice, but after considering it carefully they made the decisions and gave the orders.

'

He kept in mind the relative intelligence of the respondent and the brothers. He found that there was no basis for suggesting that the former was more intelligent than the latter.

( 6)

Neither	of	the	brothers	was	of	a subservient personality or character.

weak	or They were

stronger	in these respects	than the respondent.
Although they were old men compared with the respondent and in poor physical health by any standard, they had the benefit of access to their solicitor, from whom they received advice and to whom they conveyed instructions.

The trial judge further found that the brothers were given explanations of the nature and purpose of the Bray scheme, they attended meetings and they were given and retained relevant documents. They were advised  by their own solicitor and through him by counsel.

The trial judge did not find it necessary to decide whether there was such a relationship existing between the brothers and the respondent as to raise a presumption of undue influence. He was satisfied that  there was in fact no undue influence exerted on the brothers or either of them.

As  in  Whereat  v.  Duff  (1973)  1  ALR   363  where the primary judge had adopted a similar approach, the trial judge in this matter drew his conclusion of no undue

' .,

45.

influence after seeing and hearing the witnesses and making an assessment as to the credibility of those witnesses.  Due and proper weight must be given to the fact that the trial judge made a positive finding of the absence of any

undue influence.
to be erroneous.

That positive finding has not been shown Therefore, it ought not to be disturbed.

If  there were any exceptional	factors which would warrant
the overturning	of such a finding, this  Court would	be obliged to interfere, but no such factor exists.

Appeal against orders for costs

The trial judge arrived at the determination of the costs' applications by apportioning the costs of the three actions as to 50 percent to the action to set aside the dispositions inter vivos and 25 percent each to the two actions for decrees of probate in solemn form of law. He then proceeded to award Ah Toy his full costs in the action to set aside the dispositions inter vivos and his costs of the two actions for decrees of probate in solemn form of law discounted by 20 percent.

More specifically, the orders made by the trial judge in the two actions for decree of probate in solemn form of law were that the defendants pay 80 percent of the plaintiff's taxed costs of and incidental to the proceedings, including reserved costs and the costs of interlocutory proceedings in respect of which there had been no determination as to costs. In the action brought

by the appellants to set aside the dispositions inter vivos, the trial judge ordered that the plaintiffs in the actions pay the defendants' taxed costs of and incidental to the proceedings, including reserved costs and the costs of interlocutory proceedings as to which there had been no determination as to costs.

The effect of the orders, therefore, was to award to Ah Toy against the present appellants 90 percent of his taxed costs in the hearing of the actions. In arriving at those awards as to costs, the trial judge referred to the ordinary rule that costs follow the event and examined whether there were any exceptional circumstances that warranted a departure from that general rule. First, he disposed of the challenge to the dispositions inter vivos and held that Ah Toy, having been wholly successful in

those actions, was			entitled			to full the	circumstances		and	the			conduct relation	to	the	probate	actions, critical	to		some			extent		of	the

costs.			In examining of	the	litigation		in the		trial	judge		was conduct		of		Ah	Toy's

solicitor and whether that conduct itself had given rise to reasonable grounds of suspicion whether the testators knew and understood the terms of their respective wills.

On the other side of the ledger, he had regard to the vigour applied and expense incurred by the present appellants in pursuing the probate actions.  He observed that those aspects of the litigation seemed to go well beyond "the reasonable examination of the suspicious

circumstances" and the "doing all that was conceivably, humanly possible to win the case". He referred to the lengths to which the appellants had gone, without any merit in the trial judge's opinion, to show that the brothers were mentally incapable and said that those lengths were quite inordinate.

It is unnecessary to refer further to the various factors which his Honour took into account. It is sufficient to observe that the trial judge considered that Ah Toy should have the costs of the probate actions, but in order to reflect his own opinion that there was good reason to bring a properly proportioned action against the wills, he imposed the discount referred to.

It was submitted on behalf of the appellants that the trial judge's discretion as to costs in relation to the probate actions had miscarried and that this Court should order that the appellants have their full costs of the probate actions.

The	law	on	the	subject	of	costs		in actions	is	not			in			dispute,	but	as		usual		it		is application		of			the			law		that	difficulties			arise. ordinary		rule		is		that	in		the		exercise	of		a

probate in	the The general

discretion in probate actions, as in other actions, costs follow the event. There are, however, a number of exceptions. They are discussed in Williams, et al, Executors Administrators and Probate, Chapter 41, p.408.

The first exception relied upon by the appellants is where circumstances afford reasonable grounds for opposing the will. In such cases it is usual to order that the costs of the party contesting the will come out of  the estate (Child v. Osment ( 1914) P. 129; Goodacre v.
Smith	(1867)	L.R.	1	p	&	D	359;	Nock	v.	Austin

(1918)	25	CLR	519;	and	Mitchell	v.	Gard	(1863)	3	SW	
& Tr 3)	•									

That there were reasonable grounds for opposing the will cannot be doubted. The trial judge himself, as I have mentioned above, reflected upon his own natural suspicion throughout the hearing and for some time after it about Ah Toy's motivation. Indeed, the trial judge recognised that it was proper to bring a properly

proportioned action against the wills. discount	in	this	respect	because	of

He allowed merely a the	conduct	of	the

litigation and the engagement of two senior counsel.

In		my senior	counsel consider.	In

view,		the	engagement is	a		matter		for	the the		overall		context

of		more	than	one taxing	master	to of	such	important

litigation, the taxing master may well take the view that
the	engagement	of	more	than	one	senior	counsel	was	a

reasonable	and		prudent	course. with	respect,	that	the		trial

It follows that I think, judge	took	account	of	an

irrelevant	consideration	in	the	exercise	of	his	costs discretion.

49.

The further exception relied upon by the appellants is that where undue influence has been raised the losing party may be relieved of paying costs if there were reasonable grounds (Orton v. Smith  (1873) LR  3  P & D 23; Smith v. Smith (1866) LR 1 P &  D  239;  Wilson v. Bassil (1903) P 239. The issue of undue influence was raised both in relation to knowledge and approval and the inter vivos transactions. In my view the appellants acted reasonably in raising the issue of undue influence in all matters and in no way could it be said that they have disqualified themselves from having their costs out of the estate. It is apparent that although fraud was raised by the appellants on the pleadings, it was not a live issue in the case.

I have had the advantage of reading the respective judgments of Kearney and Martin JJ. and agree with the orders for costs they both propose.

KEARNEY J

I have had the benefit of reading the opinion of  Gallop J.	I respectfully concur in his Honour's conclusions, for the reasons he has stated, in relation to the appeals against the judgment of 24 July 1989 in the probate actions and the inter vivos action; and I agree that those appeals should be dismissed.	I turn to deal with the appeal against the costs judgment of 27 November 1989.

The background - the findings of 24 July 1989

The learned trial judge was satisfied that the testators had testamentary capacity, knew and approved of the contents of their wills, and had made their dispositions in the exercise of their own free choice and not under any undue influence by the respondent.	Those were the substantive issues in the probate actions before the Court. His Honour accordingly pronounced for the wills of 1 October 1972 and ordered that probate be granted to the respondent.

His Honour also found for the respondent in the inter vivos action.	In concluding that the testators were not unduly influenced by the respondent in making the inter vivos dispositions his Honour said (judgment, p.296)

"It is not possible to divorce the factors that caused the dispositions inter vivos to be made from those that led to the making of the wills. They were essentially the same factors.	The considerations that influenced the [testators] to choose [the respondent] as their testamentary beneficiary are the very same that persuaded them to make all dispositions necessary to effect the Bray scheme."

1

His Honour found that the respondent:-

"- - was himself involved closely in bringing into existence the wills from which he would benefit.
He spent much time in the company of the Brothers before the making of the wills; he was their accountant and financial advisor; the Brothers had become reliant on him in many ways; from time to time he urged them to make wills; he was the channel through whom instructions passed for the first time to the Brothers' solicitors that he,
Ah Toy, was to be their beneficiary,  although he did not draw the wills; he was present at the station when the wills were signed and attested, although not present at the signing.	These circumstances and those appearing from the facts generally, on their face, must raise a prudent
person's suspicion.	With respect to the learned authorities, common sense itself would demand a careful examination of the facts to see whether the continuation of that suspicion is justified. The question now to be answered is whether, having considered the whole of the evidence, that suspicion persists.	The suspicion is that the testators might not have known what they were doing when they executed their wills or that the wills might not express the true will of the testators."	(judgment, pp.287-8)
On reviewing the evidence his Honour concluded that he was "left with no suspicion that the instruments do not represent the true wills of the [testators]" (judgment, p.294).	He was "satisfied that [the respondent] did not exercise undue influence or coercion [on the testators in relation to their testamentary ac.tions]" (judgment p.295); he observed at p.296 that:-

" - - having entertained such a natural suspicion, indeed a strong one, throughout the hearing and for some time after it, and having considered all the evidence, I am convinced it should be put aside."
At p.298 his Honour observed that he had "come a long way from my initial impression" of the motivation of the respondent in "taking care of the [testators'] slightest need" (p.297).	At p.301 his Honour found:-

"Notwithstanding the great body of evidence relating to [the respondent's] conduct, and an attack by the Howard family of great thoroughness
2

and efficiency, apart from a few instances of behaviour falling short of what one might expect, there is no credible evidence suggesting impropriety [on the respondent's part] in any relevant sense."

At p.302 his Honour concluded·-

"- - I am affirmatively satisfied by the evidence that Ah Toy did not unduly influence the Brothers either by reason of his relationship with them or by reason of his conduct."
The costs orders of 27 November 1989

His Honour heard submissions on the award of costs on

27 November 1989 and gave the costs orders which he

extempore reasons on that day for then made.	He observed that "the

rules as to costs and [this should read, in] probate actions are not hard and fast", but "nevertheless, the rule seems to have been that costs normally follow the result"  (transcript, pp.2756-7).	I respectfully agree.	His Honour concluded that that was the "starting point" and that the question he therefore had to decide was "whether there are exceptional circumstances here that warrant a departure from that general proposition" (transcript, pp.2757).

I consider, with respect, that to pose as the question for decision whether the appellants had shown "exceptional circumstances", was erroneous.	It is sufficient that the appellants show "adequate reason for an order of a different character"; see Twist v Tye (1902) P.92 (p.17, below).
What then is adequate reason?	The settled practice in the exercise of the general discretionary power to award costs in Rule 63.03(1) is that, prima facie, costs follow the event, but as Dixon CJ pointed out in
Middlebrook v Middlebrook (1962) 36 ALJR 216 at p.217:-

"	in probate suits there are considerations which more readily affect the application of this rule than in most other forms of litigation."

3

That is, there are several well-established exceptions to the "event" approach to costs in litigation in the probate jurisdiction.	Each of those exceptions if established on the facts constitute special circumstances or 'adequate reason', with the result that costs do not then simply follow the event.	Accordingly, the first question to be answered in considering the award of costs, was whether the facts of the case as found on 24 July in relation to the probate actions were such that the award of the costs of

those actions fell to

be decided by the usual "event"

approach

or by one of

the well-established exceptions to it.

That did

not require that the appellants show "exceptional

circumstances" which warranted a departure from the "event" approach.	The difference in the formulation of the question to be answered is not a matter of mere words, but of substance: it is the difference between approaching the award of costs by classifying the case on its facts within one of the well-established principles and deciding it by imposing on the appellants a requirement that they show exceptional circumstances in order to succeed.

The principles which provide guidance as to the award of costs in probate litigation are set out in Spiers v English (1907) P.122.	In that case the plaintiff seeking revocation contended that the will was not duly executed, the deceased did not know and approve its contents, and it had been obtained by undue influence.	The jury found for the proponent and the Court accordingly pronounced for the will.	The unsuccessful plaintiff then sought an order that the costs be paid out of the estate or, alternatively, that

each party pay his own costs.
p.123 :-

Sir Gorell Barnes P. said at

"In deciding questions of costs [in probate actions] one has to go back to the principles which govern cases of this kind.	6rie...of those principles is that if a person who makes a will or persons who are interested in the residue have been really the cause of the litigation a case is made out for costs to come out of the estate.
Another principle is that, if the circumstances lead reasonably to an investigation of the matter,
4

then the costs may be left to be borne by those who have incurred them.	If it were not for the application of those principles, which, if not ex austive, are the two great principles upon which the Court acts, costs would now, according to the rule, follow the event as a matter of
course.	Those principles allow good cause to be shewn why costs should not follow the event.
Therefore, in each case where an application is made, the Court has to consider whether the facts warrant either of those principles being brought into operation."	(emphasis mine.)

At that time the relevant Rules of Court provided that in jury cases costs followed the event unless good cause was shown; even so, to show "good cause" was a_ less weighty burden than establishing "exceptional circumstances".	The "principles" to which Sir Gorell Barnes referred are akin to the "rules or guidelines" discussed by Mason and Deane JJ in Norbis v Norbis (1986) 60 ALJR 335 at p.337, by which an appellate court may give "guidance, which falls short of constituting a binding rule, as to the manner in which the discretion should be exercised."

On reviewing the facts in Spiers v English (supra) his Lordship considered that the plaintiff had not shown any ground on which his costs should be paid out of the estate, or "to interfere with the ordinary rule that costs follow the event". I note that his Lordship also observed, at
p.124 :-

"	in my view a plea of undue influence ought never to be put forward unless the party who pleads it has reasonable grounds upon which to support it."
His Lordship had made similar observations as to the approach to costs in probate litigation some 5 years earlier in Twist v Tye (supra) at p.94;	see below, p.17.	See also the seminal discussion of principle by Sir James Wilde (as he then was) in Mitchell v Gard (1863) 3 Sw.&Tr. 275; 164
E.R. 1280.	His Lordship there said (at 277; 1281) that:-

"The basis of all rules on this subject should rest upon the degree of blame to be imputed to the respective parties."
5

However, he then explained that the function of the Probate Court was such that despite a lack of fault in the testator or beneficiaries, the Court may relieve "the losing party from costs, if chargeable with no other blame than that of having failed in a suit which was justified by good and sufficient grounds for doubt."

In Brown v McEncroe (1890) 11 L.R. (NSW) Eq.134 Owen J succinctly stated the principles applicable as follows (at p.145):-

"The principles governing the adjudication as to costs in [probate] suits appear to be that, where the litigation is caused by the conduct of the testator, the estate must bear all the costs of both parties.	Where neither the testator nor the persons interested in the residue are to blame, and the defendant has reasonable ground for impeaching the will, no order will be made as to costs, but where there is no reasonable ground for impeaching the will the defendant will be ordered to pay the costs."

See to similar effect Public Trustee v Hall (1937) S.A.S.R.
252 at pp.253-5, per Angas Parsons J.

In the discretionary award of costs in probate actions the well-established exceptions are as much a matter of settled practice as is the usual "event" approach;	see In re Cutcliffe's Estate (1959) P.6 at pp.16-17, per Hodson LJ. Accordingly, when considering the award of costs in a probate action, the Court must first decide which approach is indicated by the facts of the case, the "event" approach or one of the exceptions; this done, there is a discretion as to the award of costs.	Failure to address the initial question - which approach is apposite to the facts as found
- opens the decision on costs of 27 November to review on appeal as involving a misdirection, in accordance with the usual approach to appellate review of discretionary judgments.

6

The learned trial judge considered that the authorities showed that the objective of the criteria set out therein as to costs was basically "to achieve a fair result"; that accords with the general thrust of Rule 63.03(2).	He noted at transcript p.2757 that the fact that there was "some real justification for a challenge" to a will did not mean that the challenging party would necessarily recover his costs.
I respectfully agree; see the principles set out in Spiers v English (supra) and In re Cutcliffe's Estate (supra).	This aspect is further examined below.

His Honour continued (transcript, p.2757)

- - there must be some proportionality between the scale and the thrust of the challenge and the circumstances giving cause for it, and - - that wasn't the case here."

In amplifying this conclusion, his Honour observed (at pp.2757-8) that the appellants:-

- - were clearly determined to spare no resources in an effort to win the cases.	It wasn't a question of, as it were, with one eye on the public interest or something like that, seeking to test or examine the suspicious circumstances with reasonable effort. - - -

The resources that have been poured into [the case) to prepare it were absolutely enormous

- where a party is asking for a departure from the general rule, [that is, that costs usually follow the event) it has to show - - that its own conduct has been fair and appropriate, and I think in this case that wasn't the case [as far as concerned the appellants).	I think if it goes beyond that, and especially if it goes considerably beyond that, then - - it forfeits its right, or goes close to forfeiting its chances of having a judge exercise a discretion in its favour contrary to the primary rule. "

As to these observations I note that what is required of a "party - - asking for a departure from the general rule" is spelled out in Spiers v English (supra). I consider with

7

respect that a party's conduct of its case may be a matter relevant to the exercise of the discretion on costs, but that exercise only occurs after it has first'been determined whether or not the case falls within one of the
well-established exceptions to the "event" approach, as the appellants claimed here.	The fairness or appropriateness of the appellants' conduct of the case had no bearing on whether the case was within one of those exceptions; that depended on who had "been really the cause of the litigation" or whether "the circumstances [led] reasonably
to an investigation of the matter."	(Spiers v English (supra); see p.4).

Against the background of these general observations his Honour then turned to the question whether the successful respondent should recover his costs from the appellants.

He ruled first that the respondent, having succeeded in the inter vivos action, was entitled to recover his costs of that action from the appellants.	That ruling follows the settled practice in the exercise of the discretionary power in Rule 63.03(1) - that in an ordinary action costs usually follow the event - and is not attacked on appeal.	With respect, the ruling was impeccable.

The respondent had also been successful in his probate actions; his Honour ruled that therefore he was "prima facie entitled to [recover] his costs" of those actions, from the appellants.	I agree, in the sense that the approach is that costs usually follow the event.	The question then was whether the appellants had shown that the facts as found in the probate actions pointed to costs being decided by one of the well-established exceptions to the "event" approach.
His Honour did not address that question.

I note incidentally that his Honour had found that there was "no credible evidence suggesting impropriety [on

8

the part of the respondent] in any relevant sense" (judgment p.301) and that the respondent had tried "to behave conscientiously throughout the whole episode" (transcript p.2759).	In the light of these findings, and as probate had been granted to the respondent by the July judgment, he had as executor a contractual right to recover his costs out of the estate; see In the Estate of Fuld, dec'd (No.3) (1968)
P.675 at p.720.	As the respondent was also the sole
beneficiary, in this case this right was valueless.

His Honour noted the practical difficulty in dividing the "forensic energy" as between the 3 actions, and proceeded to cut this Gordian knot "quite artificially" by attributing "half the cost of the proceedings to the inter vivos transaction and half the cost of the proceedings to the probate actions", this being "the nearest thing to a reasonable division that could be made".

His Honour then turned to consider whether the respondent's "prima facie" entitlement to recover his costs of the probate actions from the appellants would be affected by any "exceptional circumstances", as found.	I noted earlier that I consider this posed the wrong question.	In deciding whether there were exceptional circumstances
his Honour considered that there-

" - - was ground for suspicion in the relevant sense in those probate matters, largely created -
- by the conduct of the plaintiff's	[this should be "testators' "J	legal advisers" (transcript, p.2758).

For the purpose of the costs of the probate actions, although the respondent "must be regarded as personally not responsible for such suspicion as did exist" his Honour considered that he must nevertheless "hold [the respondent] responsible" for the suspicion "largely created" by the conduct of the legal advisers (transcript, p.2759).	I respectfully agree.	I regard this as a crucial finding.

9

It can be seen that the finding that suspicion existed "in the relevant sense", suspicion for which the respondent-beneficiary was held responsible, means that the
approach to costs in this case falls squarely within the two "principles which govern cases of this kind", in the words of Sir Gorell Barnes P. in Spiers v English (supra), and not within the "event" principle.	Clearly, the learned trial Judge was erroneously approaching the question of costs on the basis that the applicable principle was the "event" principle, any departure from it required "exceptional circumstances" to b'e established, and the suspicious
circumstances he found to exist constituted exceptional circumstances.

His Honour then applied the "proportionality" principle he had mentioned earlier, (at pp.2759-2760):-

"On the other hand, I think the defendants' [appellants'] conduct was not without fault either.	They, in my opinion, went well beyond - in the magnitude of the case they conducted, which included 2 Queens Counsel and a junior throughout the case - what I regard as reasonable to examine adequately the suspicious circumstances that admittedly existed.	It wasn't merely the matter of [the number of] counsel - - -
- - it seemed to me to go well beyond the reasonable examination of suspicious circumstances and was really an effort to win the cases.	I think that [their approach] was disproportionate to the problem that seemed to exist.

- -

The lengths to which they went, without any merit in my opinion, to show that the [testators] were mentally incapable was quite inordinate
-"

His Honour discussed the appellants' strenuous effort to show that the testators lacked testamentary capacity, noted that other evidence "pointed so forcibly to their being ordinary intelligent men" (p.2760),	and commented (at p.2761) that that effort "was way beyond	what is called for by the suspicious circumstances - - - it was just another effort to bolster up the case in order to win it."

10

In this connection, I accept the submission of the appellants that the number of counsel briefed is a consideration relevant to the quantum of costs allowable; I observe that on any view this was obviously a "heavy" case. It is not a relevant consideration in answering the prior question whether the case on its facts falls within any of the well-established exceptions in probate litigation to the "event" approach.	Similarly, the extent of the examination of the suspicious circumstances by the appellants at the trial is a matter going to the quantum of costs allowable, and not to the prior question of the proper principle on which to approach the award of costs.	However, to litigate a probate suit excessively, thereby prolonging the trial unnecessarily and building up a burden of costs on the executor and the estate, may attract a sanction when the discretionary power to award costs is exercised, including the award of part of the costs against that party, even though the approach to costs follows one of the exceptions and not the "event" principle.	A party may take excessive steps in his effort to win but, as Barwick CJ pointed out in Stanley v Phillips (1966) 115 CLR 470 at p.478 "not - - - at his opponent's expense".	See also Woolf v Burman (1940) 13
A.L.J. 431 at p.432; and Cretazzo v Lombardi (1975) 13
S.A.S.R. 4 at pp.11-12, per Bray C.J.

His Honour then referred specifically (at p.2761) to the circumstances in which "documents were taken from the homestead and found their way into the hands of the [appellants)", and described that occurrence as "quite reprehensible".	He noted the importance in the case of the fact that those documents had been with the testators in their homestead and said (at p.2762) ·-

"Why I'm mentioning this now is that the conduct of the [appellants), and those with whom they were involved, is not beyond reproach."
On this point I accept the appellants' submission that there is nothing to suggest that the appellants had anything to do
11

with the removal of the documents from the homestead.	Their removal cannot properly be counted against the appellants who discovered and made available for inspection those documents, as documents in their possession, though they did not disclose that the documents had come from the homestead.

His Honour concluded from his review of the facts that his earlier conclusion - that because the respondent had succeeded in the probate actions he thereby was "prima facie entitled to [recover] his costs" from the appellants - was partially affected by "exceptional circumstances".	I have already stated that I consider that to approach the question of costs in this way was erroneous in principle; having found there was "ground for suspicion" for which he held the respondent-beneficiary responsible, costs fell to be considered in accordance with the principles stated in Spiers v English {supra) and not by the "event" principle.
Applying the "event" approach, his Honour concluded {at pp.2762-3) that the respondent was entitled to recover his costs of the probate actions from the appellants, but directed that those costs be discounted:-

"	in order to reflect my opinion that there was good reason to bring a properly proportioned action against the wills."
That is to say, in exercising the discretionary costs power under Rule 63.03(1) his Honour followed the usual approach - that costs followed the event - and reduced the amount thereby payable by the appellants because, while he found the respondent legally responsible for the suspicious circumstances surrounding the wills, and that a "properly proportioned action" by the appellants was therefore warranted, he considered the case as mounted by the appellants disproportionate to what was required to examine those circumstances.	His Honour did not embark upon a consideration whether his findings of fact as to the respondent-beneficiary's legal responsibility for the circumstances of suspicion warranted one of the exceptions to the "event" approach "being brought into operation", as
Sir Gorell Barnes put it in Spiers v English {supra).
12

In the result, the costs having earlier been apportioned 50/50 as between the probate actions and the inter vivos action, the respondent was held to be entitled to recover from the appellants 80 percent of his costs of the probate actions, as well as 100 percent of his costs of the inter vivos action.	The net effect of the mathematics was that the appellants were ordered to pay 90 percent of the respondent's costs of the three actions.	No formal order was made in relation to the appellants' application to recover their costs from the estate, though clearly it was refused.

The appeal

The appellants appeal against the order for costs of
27 November 1989; the grounds of appeal are set out by Martin J.	They concede that the general approach in probate actions, as in other actions, is that costs follow the event, but submit that in probate actions there are
well-established exceptions to that general approach, into one of which this case falls.	They submit that the learned trial judge was required first to consider whether the case on the facts he had found fell within one of those exceptions, before he could consider how to exercise his admitted discretion as to costs.	He had failed to observe that requirement and had accordingly proceeded to consider the award of costs on an incorrect basis.	He did so because he failed to treat matters such as established suspicious circumstances as going to the well-established exceptions to the general approach, and instead erroneously treated them as matters which affected only the quantum of costs to be allowed on the "event" approach; and thus his order awarding costs, though discretionary, is erroneously based and reviewable.	The relief they seek is that instead of their being required to pay 80% of the respondent's costs of the probate actions, the whole of their costs and the respondent's costs of those actions should be ordered to be

13

paid out of the estate.	They also seek that the costs of the proceedings should not be apportioned 50/50 as between the probate actions and the inter vivos action, as directed by his Honour, but apportioned 90/10 as between them; I should state immediately that I see no basis for altering the 50/50 apportionment made by the learned trial Judge, who was uniquely well placed to make that assessment.

The appellants submit that one of the well-established exceptions to the "event" approach to costs applies when the court finds that the conduct of the beneficiary was such as to create a reasonable suspicion that the testator did not know and approve of the contents of his will.	They submit that the findings of 24 July show that in effect this is such a case.	When a Court makes such findings, the approach to the exercise of the costs discretion is not the "event" approach; and because the respondent-beneficiary was held responsible for the conduct which led to the finding that it was proper for the question of the testators' knowledge and approval to have been examined, it was open to the court in its discretion to order that the costs of properly testing that question be borne by the estate, even though the suspicion was ultimately dispelled.	I consider that the following 4 authorities support that submission.

In Mitchell v Gard (supra), the seminal case in the modern approach to costs in the probate jurisdiction,  Sir James Wilde analysed the different types of cases and concluded (at 278; 1281) ·-

"From these considerations, the Court deduces the two following rules for its future guidance: first, if the cause of litigation takes its origin in the fault of the testator or	hose interested in the residue, the costs may properly be paid out of the estate; secondly, if there be sufficient and reasonable ground, looking to the knowledge and means of knowledge of the opposing party, to question either the execution of the will or the capacity of the testator, or to put forward a charge of undue influence or fraud, the losing party may properly be relieved from the costs of his successful opponent."
14

In Child v Osment (1914) P.129, a person who took a benefit under the will had been instrumental in preparing it.	It was held that this circumstance should generally excite the suspicion of the court, and call for an enquiry; and those who were instrumental in bringing about that enquiry were not wholly in the wrong, even if they did not ultimately succeed.	The jury verdict here indicated that
the suspicion was ultimately dispelled.	Sir Samuel Evans P. said, at p.133 :-

"I think there can be no doubt that there were fair circumstances of doubt or suspicion in regard to the will before the circumstances were explained."

I observe that this was clearly the position in the present case; see the matters pointing to suspicion itemized by Gallop J at pp.15 and 16 of his judgment.	His Lordship then reviewed the circumstances of suspicion and ordered that the costs of all parties come out of that part of the estate which had been devised to the executors as beneficiaries.

In Goodacre v Smith (1867) LR 1 P&D 359 circumstances of suspicion existed as to whether the testatrix knew and approved of the contents of her will; the jury's verdict showed that the evidence had ultimately dispelled those suspicions.	On the question whether the defendant should nevertheless have her costs out of the estate, Wilde B. (as he then was), having reviewed the particular circumstances, said at p.362:-

" - - the Court cannot regard the method of will making adopted by the plaintiffs, and their conduct in keeping the relatives away from the testatrix, as satisfactory.	Under all the circumstances, I think the defendant's costs ought to be paid out of the estate."
In Nock v Austin (1918) CLR 519, the suspicious circumstances had reasonably led to an enquiry as to whether the testator knew and approved of the contents of the will; the result of the enquiry was that the suspicions were

15

dispelled.	They had largely arisen from the conduct of the executors-plaintiffs in not seeing to it that the testator had independent advice.	It was held that the
defendant-widow should have the costs of her unsuccessful opposition, out of the residue of the estate in which the plaintiffs alone had an interest.	Barton and Gavan Duffy JJ said at p.525 :-

"We not only think that the circumstances led reasonably to an investigation in regard to the propounded document, but we think that those interested in the residue have been in large measure the cause of the litigation.	- - - These were suspicious facts deserving consideration not only on the merits but on the question of costs." (emphasis mine.)

Isaacs J observed at p.529 ·-

"The appellants rely on the doctrine stated in many cases, one of which is [Child v Osment (supra)].	It is this: that where a party having created suspicion in relation to a will under which he benefits is under the burden of clearing away that suspicion, then, as justice requires him to do so in the presence of any person interested should the suspicion be justified, he must, though eventually successful, ordinarily pay the costs of the person whose presence he has made necessary, so far as his benefit extends." (emphasis mine)

The respondent relied on Twist v Tye (supra) a case where executors who were residuary legatees unsuccessfully propounded 2 wills.		The testatrix was found to lack testamentary capacity, and to have neither known nor approved of the wills.	Gorell Barnes J considered that the testators ought to have known the true state of affairs, as they managed the testatrix's affairs and were "as much concerned in the making of the wills they set up as [the testatrix] was."	In the circumstances it was held that the executors' costs should not be allowed out of the estate; the general rule, that costs follow the event, should apply, with the result that the executors should pay the defendants' costs.		Gorell Barnes J said at pp.93-4 ·-

"The general rule is, of course, that costs, after a trial of this character, should follow the event

16

unless, according to the principles which are in force in this Court, there should be adequate reason for an order of a different character.

Speaking generally, there are in this Division two classes of cases in which there should be, and generally is, a departure from the ordinary rule:	the first is where the litigation has been brought about through the conduct of the testator or testatrix; and the second is where the parties who have failed have reasonably been led into the litigation by a bona fide belief in their case, and have, therefore, felt it desirable to inquire into the testamentary dispositions of the testator or testatrix.
In order to determine this question of costs, the Court must look at the facts and view them as they were presented to the unsuccessful parties." (emphasis mine)

His Lordship said at p.96 ·-
" - - one must guide oneself by the general applications of the principles laid down."

It can be seen that on its facts Twist v Tye (supra) was a very different case to this case.

The plea of undue influence

Somewhat different costs considerations are said to apply when a plea of fraud or undue influence is unsuccessfuly relied on.	I rather doubt that, since Mitchell v Gard (supra).	In all three actions the appellants alleged undue influence and fraud on the part of the respondent.	Fraud (except for its manifestation as undue influence) was not, however, a live issue in the case. The appellants concede that the general approach to costs in relation to an unsuccessful allegation of undue influence is that the unsuccessful party must pay the costs of the proponent of the will on that issue; but they submit that if there was a reasonable ground for pressing the issue, though ultimately unsuccessfully, the losing party may be relieved of the burden of paying the proponent's costs of the issue, and may even, according to the circumstances of the case, have his costs allowed out of the estate.	In this case the

17

learned trial Judge stated	that he had "a natural suspicion [of the testators being subject to undue influence by the respondent], indeed a strong one, throughout the hearing
and for some time after it" (emphasis mine) (judgment, p.296).	Accordingly, I consider that it is clear that the appellants in fact had reasonable grounds to press the issue of undue influence.	I consider that the following three authorities support the proposition for which they contend, as regards costs.

In Orton v Smith (1873) LR 3 P&D 23, the Court allowed costs out of the estate to the unsuccessful opponent of a will although he had pleaded undue influence and fraud, being of opinion that the mode in which the testator had executed the will and the conduct of the persons beneficially interested under it, had reasonably excited doubt and suspicion and justified those pleas.
Sir James Hannen considered the case "a peculiar one" and one with "many facts calculated to excite grave suspicion".

In Smith v Smith (1866) LR 1 P & D 239 it was held that it is not an invariable rule that the unsuccessful opponent of a will who has pleaded undue influence will be condemned in costs.	The Court refused to condemn a next of kin in costs although he had pleaded undue influence, on the basis that in the circumstances of the case the plea was not unreasonable.	Wilde B. observed at p.240 :-

"A pure case of undue influence can hardly ever be established, but it is often mixed up with the question of capacity."
His Lordship made no order as to costs. This accorded with his Lordship's view of pleas of undue influence or fraud in Mitchell v Gard (supra) (at 278; 1281):-

"- - -it seems just and meet, if the circumstances of the case have rendered the inquiry a proper one, that neither party should be condemned in costs."

18

In Wilson v Bassil (1903) P.239 it was held that where the facts were such that the party propounding the will had the burden of removing suspicion attaching to the making of the will, a person opposing it is prima facie justified in pleading undue influence and fraud and, though unsuccessful, ought not to be condemned in costs unless the circumstances of the case be such as to have rendered it unreasonable for him to have raised those issues.	Walton J ordered that the costs of the unsuccessful defendant be paid out of the estate.

A party may be condemned in the costs of the proponent of the will in respect of his unsuccessful plea of undue influence, and yet be allowed his costs out of the estate in respect of his other pleas; see Levy v Leo (1909) 25 T.L.R. 717.	In Howell v Marsh (1906) 23 WN (NSW) 17 Walker J observed at p.18 that where a charge of undue influence was made but not proved costs out of the estate may yet be awarded to the unsuccessful party "but that is only where strong evidence is given and a case is made out involving the testator or some beneficiary in misconduct contributing to the litigation."	In the present case the
respondent-beneficiary was held responsible for the suspicious circumstances.

In Barry v Butlin (1838) 2 Moo P.C.480; 12 ER 1089 the Privy Council considered that the appellant was well justified in calling for proof of the will and ought not to have had to pay the costs of that enquiry; but because he had unsuccessfully alleged fraud, part of it for a collateral purpose not material to the decision in the suit, the decree of the Court below condemning him in costs, was not varied.

The respondent relied on several authorities.	In Summerell v Clements (1862) 3 Sw&Tr 35; 164 ER 1184 Cresswell J. stated (at p.37) ·-

19

"But if the parties have chosen to raise other issues of undue influence or fraud, and have failed to prove them, then I have almost invariably condemned in costs."
However, that statement of the general approach must be read in the light of his Lordship's earlier observations which indicated that it applied where "there was not fair and reasonable ground" for raising those issues; and in fact  his Lordship made no order as to costs.	There was fair and reasonable ground for raising undue influence in the present case.	Further, the modern approach to costs commences with Mitchell v Gard (supra), decided in 1863; the earlier approach is set out in the note to the report of
Summerell v Clements in (1862) 32 L.J. 33, Prob., at pp.34-36.

The facts in Page v Williamson (1902) 87 L.T.146 were in many respects similar to those in Twist v Tye (supra). Gorell Barnes J said at p.147 :-

"I should like, whilst dealing with this matter, to call attention to an erroneous idea which seems to exist in the minds of litigants in this court. They appear to have an expectation of getting their costs out of the estate in almost every case.	That is not so.	The rule is that costs follow the event, and there is no departure
from it in this court any more than in any other court, unless under rare and exceptional circumstances."	(emphasis mine)
His Lordship's concluding statement, as underlined, does not appear to accord in its reference to "rare and exceptional circumstances" with his approach in other cases reported in the authorised reports; see, for example, his reference to "adequate reasons" in Twist v Tye (supra).	With great respect, I do not consider that the concluding statement accurately stated the law in 1902, nor does it to-day.

In Dwyer v Vindin (1906) 4 CLR 216 the headnote reads:

"Although as a general rule an unsuccessful defendant in a probate suit will not be ordered to pay the costs, if he had an interest in opposing
20

probate and the will was made under circumstances which naturally tended to raise a suspicion of testamentary incapacity or undue influence, there may, nevertheless, be other circumstances rendering the defendant's opposition unreasonable and justifying an order for costs against him.•
The trial judge had held that the unsuccessful defendant-appellant was aware of circumstances which rendered his opposition to the will unreasonable, even though the circumstances surrounding its making were
somewhat suspicious, the will having been prepared by the beneficiary.	Special leave to appeal was refused.
Griffith CJ said at p.218:-

"The only material point, therefore, is that the learned Judge ordered the defendant to pay the costs occasioned by his unsuccessful opposition to the will.	There is no doubt as to the general rule that in a case of this sort a person interested is entitled to raise this defence, and does not by doing so incur any risk of being ordered to pay the costs if he is unsuccessful.
That is not disputed.	But the rule is subject to this exception, that though as a general rule that principle is to be applied, there may be circumstances that would make it unreasonable to raise such a defence; if he knows, for instance, that although the will is prima facie invalid, on the ground of the suspicious circumstances surrounding its execution, there are facts which remove this objection.	In this case the learned Judge, while recognizing the general rule, thought that the defendant by his own conduct had deprived himself of the right to take advantage of the rule.	That is a question of fact - - - "
Again, the outcome in this case is distinguishable on the facts; there is no suggestion that the appellants here knew of facts which removed suspicion.

It was submitted that In Re Cutcliffe's Estate (supra) was a case very similar to the present.	However, I note that the unsuccessful defendants in that case were found to have concocted evidence; in those circumstances it is not surprising that they were mulcted in costs.	The respondent relied on the following statement by Hodson LJ (at p.21):-

21

"It seems to me a strong thing, which I should be slow to listen to, to maintain that people who give evidence which the judge finds to have been wholly false, who have lost their case, and who have had the costs given against them, should be heard to say that an order for costs should be made either wholly or in part in their favour on the ground that the court in exercising its discretion in these cases is in the habit of exercising it along certain lines and in accordance with certain principles.	The discretion of the court is always there, and the rules on which that discretion is exercised are there for the assistance of those who have to advise litigants before they embark on litigation, so that they may have some idea of the risks they run as to costs.	It must surely be obvious to anyone who has studied the history of litigation in the Probate Division, notwithstanding the exceptions which are to be found in the books, that where pleas of undue influence and pleas of fraud are made, the probability, at any rate, if they are unsuccessfully made, is that the people who make such charges and fail will be condemned in the costs not only of that charge but of the whole action." (emphasis mine)

However, his Lordship had also said (at p.17):-

"The present case as put before this court was that the judge was in error, in that he did not, at any rate in part, relieve the defendants from the burden of costs, because it is said that it was the fault of the testator that this litigation had been brought about; or, if not the fault of the testator, it was the fault of the beneficiary, namely, Mrs. Le Due, the residuary legatee.	Of course, if either of those qualities were to attach to this case, the judge would be expected, in accordance with the usual practice, to allow the defendants' costs out of the estate, at any rate so far as the issue of knowledge and approval was concerned, although it is admitted that it would be proper to penalize the defendants because they had put forward a plea of undue influence which had failed." (emphasis mine)
I note that on the facts it was held (at p.7):-

"That the case did not fall within that exception to the ordinary rule as to costs, whereby judges in probate actions could in the exercise of their discretion award costs out of the estate to an unsuccessful party if the litigation had been caused by the conduct of the testator or of the residuary legatee; for conduct of the testator
22

,

which, as here, merely had the effect of misleading parties and inspiring false hopes as to his testamentary intentions was outside the range of possible circumstances which might constitute "the fault of the testator causing the litigation".	Nor, on the evidence, was the conduct of this residuary legatee the cause of this litigation." (emphasis mine)

The case is distinguishable on the facts.	In the present case it is clear from the findings of 24 July that the plea of undue influence had been put forward on reasonable grounds created by circumstances for which the respondent was held responsible.	I note that at p.13 Hodson LJ, arguendo, said:-

"The rule of practice is: Case for inquiry [on the Tyrrell v Painton (supra) suspicion principle] - no order as to costs; fault of testator or residuary legatee - costs out of the estate.''
Conclusions

I have earlier set out the learned trial Judge's findings in his judgment of 24 July 1989, , and his observations when dealing on 27 November with the question of costs.	It is clear that the circumstances as found by his Honour afforded the appellants reasonable grounds for opposing the wills, those circumstances involving suspicion as to whether the wills represented the true will of the testators; for those circumstances the respondent, though not personally responsible, was legally responsible.

The costs in the probate actions were in the discretion of the learned trial Judge, and in the absence of any error in principle, this Court should not interfere; see
McCauley v McCauley (1910) 10 CLR 434.

For the reasons stated earlier I accept the appellants' submission that his Honour's approach to the award of costs, and his exercise of his discretion, miscarried.	Where a court of first instance has acted on an erroneous view of the legal bearing of the facts, the exercise of its
23

discretion to award costs may be reviewed; see Maiden v Maiden (1908-9) 7 CLR 727 at p.739, per
Griffith CJ.	It is clear, in my view, that the legal bearing of the fact that there were suspicious circumstances for which the respondent-beneficiary was held responsible, is that the discretionary award of the costs of the probate actions exercised judicially, falls to be considered in accordance with one of the well-established exceptions to the "event" principle.	The error in applying the "event" principle in this case is, in the language of Bray C.J. in Churchill v Badenochs Transport Ltd. (supra) at p.65, one which "could have affected the result"; I do not consider that "substantial justice has nevertheless been done" by the orders which were made.		I consider that this Court is in a position to deal with the question of the costs of the trial of the probate actions.

With respect, Isaacs Jin	Nock v Austin (supra) neatly encapsulates the approach to costs to which the facts as found in this case appear to point as the proper approach; see p.16.		The costs payable must of course be proper costs. In the circumstances as found it is open, as a matter of discretion, to order that the whole of the costs of the unsuccessful parties in the probate actions, including their costs on the issue of undue influence, be paid out of the estates.	(In that connection, I note the application of Rule 63.29(2)(a)).	In all the circumstances I consider that that is the appropriate order to be made.	Accordingly, I would allow the appeal in that respect against the award of costs, set aside the award of 27 November, and in lieu thereof make the following orders as to costs·-

The respondent and the appellants are entitled to recover their costs of the probate actions Nos. 118 and 199 of 1980 (including reserved costs), out of the estates on an indemnity basis.

The appellants are to pay the respondent's costs of the inter vivas action No. 211 of 1985.

24

In this connection I would certify that all parties were

warranted in retaining 63.72(9)(b))	I would

more than one counsel (Rule
dismiss the appeal against the 50/50

apportionment of the costs as between the probate actions and the inter vivos action, and affirm the order of
27 November 1989 in that respect.

I add that the learned trial judge was in an unmatched position to make the observations he made concerning the "inordinate" lengths to which he considered the appellants had gone in an endeavour to "show that the [testators] were mentally incapable", an attack without any merit in his view; the taxing Master should take those observations into account on taxation.	I consider that any resulting disallowance on taxation of part of the appellants' costs of trial is a sufficient sanction for any unnecessary prolongation of the trial attributable to the appellants' excessive efforts.

Costs of the appeals

In considering the discretionary decision as to the costs of the appeals, an important principle is that a party is entitled to the costs of an issue on which he has succeeded.	Here the respondent is successful on the appeals on the substantive issues, while the appellants are largely successful on the appeals against the award of costs.	I note the approaches to the costs of appeal taken in Nock v Austin (supra), Middlebrook v Middlebrook (supra) and Liffe v Hedderwick (1922) 31 CLR 148; and the observation by Knox C.J. in the last-mentioned case, at pp.154-5:-

" - - the appellant ought to have been allowed out of the estate his costs in the Supreme Court.	But the fact that he was entitled to contest the will at the expense of the estate in the Supreme Court does not afford any justification for an appeal by him to this Court."

25

The hearing of the appeals occupied some 6½ days; I bear in mind the proportion of that time devoted respectively to the substantive issues, and to the costs issue.	In my opinion justice would be served by an order that the appellants pay 50% of the respondent's costs of the appeals, and I would so order.	I would certify in terms of Rule 63.72(9)(b) that  the retainer of more than one counsel was warranted.

26

..

MARTIN J.

In this matter I have had the benefit of a draft of the reasons for judgrnent of each of their Honours Gallop and Kearney JJ. For the reasons given by Gallop J. I agree that the appeals against the orders that probate in solemn form
of law of the wills of each of the Herbert brothers be granted to the respondent, Lawrence Cheong Ah Toy be dismissed, and that the appeal against the verdict in favour o:.	:r J..h '.roy and Koolpiny2J-. Station Pty Ltd in the c2se regarding the inter vivos action also be dismissed.

The two actions concerning the wills and that concerning the inter vivos transaction were heard together. On the question of costs his Honour, the learned  trial Judge, apportioned the total costs as to 50% to the Probate actions (in which the respondent was plaintiff) and the remaining 50% to the inter vivos transaction (in which the respondents were defendants).	In the Probate actions he ruled that the defendants should pay 80% of the plaintiff's taxed costs of and incidental to the proceedings, including reserved costs and the costs of interlocutory proceedings in respect of which there had been no   determination  as to costs.	In the action concerning the inter vivos transaction it was ordered that the plaintiffs pay the defendants' taxed

. '

costs of and incidental to the proceedings, including reserved costs and the costs of interlocutory proceedings as to which there had been no deterrr.ination as to costs.

There are appeals in respect of the costs orders.
The grounds of appeal as set out in the Notices of Appeal in all cases are common.	They are that his Honour:

erred in holding that the costs of the corr ined proceedings be apportioned in the proportions set out above;

erred in holcing that ,;here a party to proce-&<:i:ings is asking for a departure from the general rule that costs follow the event, it has to show that its own conduct has been fair and reasonable;

erred in holding that if a defendant goes beyond what is fair and appropriate then, ''it forfeits it's right, or goes close to forfeiting its chances of having a Judge exercise a discretion in his favour contrary to the primary rule" that costs follow the event;

erred in finding that the conduct of the defendants in the Probate actions had not been fair and appropriate;

2

' .

should have found that the defendants' conduct of the cases in the Probate actions did not exceed a testing and exanoination of the suspicious circumstances in thtc case with reasonable effort;

erred in finding that the plaintiff in those actions was not personally responsible for such suspicion as existed in the case;

erred in finding that the evidence called by the defendants in those actions regarding the mental capacity of each of the testators went beyond what was called for by the suspicious circumstances;

erred in finding that the conduct of the defendants in those actions was not beyond reproach;

erred in that having found that there were suspicious circurr,st.ances in those actions, he, nevertheless ordered that the defendants pay 80% of the plaintiff's costs in those actions;

erred in that having found that there was good reason to bring a properly proportioned defence in those actions, he failed to order that the defendants' costs in both actions be met out of the respective estates of the testators.

3

..

fy

The orders sought in the appeals in regard to costs are that the orders be set aside, that the costs of the proceedings be apportioned as to 9Gi to the Probate actions and 10% to the inter vivos action, and that the costs of the proceedings in the Probate actions be met out of the respective estates of the testators.

On the hearing of the appeals the attack on the order apportioning the costs was maintained and the other grounds only argued in respect of the orders in the Probate actions.	If successful the result would be that thoEe
opposing	'.r    Ah Toy  would  be penalised as	to 10% onl\' c-: the
total costs of the actions, the rerr,ainder being effec ively borne by Mr Ah Toy.

Before turning to His Honour's reasons for the orders which he made, it is first desirable to examine the Rules of Court as to costs to be found in 0. 63.	Rule 63.01

'

defines 11 tr ust ee 1	as including an executor of a  will.	By

sub-rule (2), unless a contrary intention appears, a reference to a fund, being a fund out of which costs are to be paid, or being a fund held by a trustee, includes a reference to property held for the benefit of a person and a reference to a fund held by a trustee includes a reference  to other property to which the trustee is entitled  as trustee whether or not the property is for the time being in the possession of the trustee.

4

The general rule to be found in r. 63.03(1), is that the costs of a proceeding are in the discretion of the Court.	The Court has power under r. 63.07, where the Court orders that costs be paid to a party to then, or at a later time, order that as to the whole or a part of the costs specified in the order, that party is entitled to (a) a portion (specified  in the order) of taxed costs.	As to interlocutory applications each party shall bear his own costs unless the Court otherwise orders (r. 63.18), but where, by an order of the Court, costs of an interlocutory  or other application or of a step in the proceedings are reser ed, the Court may direct by whom the costs are to be paid and where no direction is so made a party may, within
21 days after the conclusion of the proceedings, apply to the Court for direction as to the payment of the costs reserved.

Costs in a proceedings which are to be taxed shall be taxed either  on (a) the standard  basis or (b) the inderrJJi ty basis.	On a taxation on the standard basis there is to be allowed a reasonable amount in respect of all the costs reasonably incurred, and any doubt which the Taxing Master has as to whether the costs were reasonably incurred or were reasonable in amount, shall be resolved in favour of the paying party.		On a taxation of costs on the indemnity basis, all costs shall be allowed except to the extent they are of an unreasonable amount or have been unreasonably

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incurred, and any doubts which the Taxing Master has as to whether the costs were reasonably  incurred  or were reasonable in amount shall be resolved in favour of the recei\·ing  party (see Rules 63.2.; to 63.27).	Costs are to be taxed  by the Taxing  Master (r. 63.06).	Except as provided by the Rules or an Order of the Court, costs are to be taxed on the standard basis.	Where the Court makes an order for costs without indicating  the basis of taxation or to be  taxed on a basis other than the standard basis or the inderrJ1ity basis, the costs should be taxed on the standard
basis.	Subject to O. 63 the Court may order that costs be taxed on the indemnity basis and where the Court makes an order for pa)Tient to a party of costs out of a fund, or the payment of costs to a party who sues or is sued as trustee, subject tor. 63.30, the costs shall be taxed on the
inder --:ity basis (r. 63.29).	As tor. 63.30, it provides that where a party who sues or is sued as trustee is entit ed to be paid costs out of a fund which he holds in that capacity, the costs shall, unless the Court otherwise orders, be taxed on the indemnity basis.

The Master is given a number of discretions in relation to costs including as to the allowance of counsel's fees (r. 63.72).	In assessing fees on brief and other fees for counsel the taxing master is to have regard to a number of matters including the complexity of questions of law that were involved and the amount involved.	No fee shall be

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,.

allowed  for more than one counsel, unless the Court certifies that the retaining of more than one counsel was warranted (r. 63.72)(9)(b)).	(It appears that no such order was	ade in these matters at first instance).

Kith respect, I agree with both Gallop and Kearney JJ. that his Honour the learned trial Judge misdirected himself as to the way in which he should
approach the question of costs.	Kearney J. has reviewed the law in great detail and I do not need to say much about it.   I arr, rr-uch attracted to the observation of Sir J P Wilde in Mitchell & Mitchell v Gard and KincwEll (18£3) 3 SK & TR 278 corr@encing at 1281 "It is of high public importance that doubtful wills should  not pass easily  into proof by reason of the cost of opposing them.	It is of equal  importance that parties should not be tempted into fruitless litigation by the knowledge  that their costs will be defrayed  by others.	These opposite reasons appear to have alternately swayed the decisions to be found in the books.	It is the desire of the Court to keep both in view, while yielding to neither, and it is in this spirit that the above rules have recommended themselves for adoption".	The rules to  which his Honour referred are there set out at some length.	For example, "if the party supporting the will has such an interest under it that the costs, if thrown upon the estate, will fall upon him, and he by his improper conduct has  induced a litigation which the Court considers reasonable,

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,) .

it is not unjust that the estate should bear the costs of the litigation which his conduct has caused".	I do not understand "improper" to here be equated with unlawful, but
rather as denoting that what was done was not wholly in accordance with the standards of propriety in the circumstances.		There was such a lack of propriety in this case as has been shown by his Honour's summation of the matters which gave rise to the suspicion which he entertained concerning the testators' knowledge and consent, and as to the circumstances which could reasonably give rise to the conduct or good faith of the respondent being questioned through the plea of undue influence.		The respondent was successful on both counts but that is not to say that the appellants were wrong, even though unsuccessful.	I consider it was reasonable for the plea of undue influence to be raised both in the Probate actions and the action concerning the inter vivos transaction.	The matters going to raise that issue were very much interrr.ingled Kith those which gave rise to the suspicion that the provisions of the wills may not have been fully known to and approved by the testators.	Indeed, it seems to me that an argument could be raised that the issue of costs in the inter vivos transaction could be considered in much the same way as those in the Probate actions.	As has been pointed out the whole purpose of the making of the wills and the setting up of the Bray scheme was to ensure the continuation of the pastoral business on the land in

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question.	The Bray scheme was no doubt primarily designed with a view to preserving the assets and therefore the continuation of the business on the land, but it was also the means by which control over the same would pass to the respondent upon the death of the survivor of the brothers.

There was no argument addressed to this Court by which it was sought to draw an analogy between the case

J

concernincJ	the inter vivos transaction and that concernina

the wills and I will not venture to formulate the terms of any orders for costs upon that basis.

So;;,e of the cases suggest that among the factors which might be taken into account in the exercise of a discretion as to costs, is one that there are facts known to those who may have an interest in opposing a will which would remove the grounds of suspicion surrounding its execution.	With respect, there is merit in such a proposition, but I do not think it has any application in the Probate actions here.	Even if the defendants knew that copies of the wills and a number of other important documents were found in the desk at the home occupied by the brothers, which documents were supplied to them, that fact without else, would not be sufficient to remove the suspicion which they reasonably held bearing in mind all of the circumstances.	Fraud, though pleaded against the respondent, was not really pressed during the hearing nor on

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the appeal, and although it should not have been raised, or alternatively should have been struckk out at the end of the trial (if not before), the fact of that plea does not exercise any influence in respect of the costs issue.

Costs are always a matter of discretion and the general rule is that they follow the event.	All such general rules however, must yield to the justice of particular cases and where in the course of decisions in similar matters principles have emerged by which the litigant may be able to estimate the prospects before him and foresee the likely consequences, particularly aE to costs, then justice requires that the proper consideration be given to the application of the principles in a like case.	(Mitchell v Gard).

In the Probate actions His Honour the learned trial Judge acknowledged the reasonableness of the suspicions entertained by the defendants, for he held them himself for sometime even after the conclusion of the hearing.	Ee did not give any express reason for declining to order that the defendants have their costs out of the estates but, to the contrary, ordered them to pay a substantial proportion of  the plaintiff's costs.	He seems to have arrived at that view, with respect, by a line of reasoning which was inappropriate.	He was wrongly influenced  by what he regarded as the inordinate effort put into the case by the

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:,;».,

defendants which is a matter. going to the quantum of costs to be allowed by the Master, and not to where the burden of costs should lie, which is a matter for the Court.

The only real issue in relation to the costs awarded in the case concerning the inter vivos transaction was that the total costs of all actions were apportioned as to 50% to it.	I agree that there is no reason to disturb that apportionment.	His Honour was in the best position to make that assessment.		In accordance with the general rule he ordered the appellants here to pay the costs of the
dEfE	a ts in that case and no reason has been sho n on the argurrents before this Court as to why that order should be

varied or set aside. that apportionment.

I would dismiss the appeal against

As to the costs in the Probate actions, I would order that the costs of all parties including reserved costs be paid out of the estates.	Pursuant tor. 63.29(2), they will therefore be taxed on the indemnity basis in accordance
tor. 63.27.

The appellants are to pay the costs of the defendants including reserved costs in the action concerning the inter vivas transaction.

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That leaves the cost of the appeals.	Each of the parties were partly successful, the respondent on the substantive issues and the appellants on the judgment as to costs.	Although the time taken on the hearing of the appeals in relation to costs specificially  was only about 10% of the whole, much of the argument on other issues was also relevant  to the costs questions.	I agree with
Kearney J. that the appellants be ordered to pay 50% of the respondent's costs of the appeal.

I would certify that the retaining of more than one co	sel, by all parties, both at trial and before this  Court, was warranted.

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