[2025] SASC 91

Applicant: PAUL ANTHONY EARL AS EXECUTOR OF THE ESTATE OF MARIE CLARE WALKOM DECEASED No Attendance First Respondent: CHARMAINE CLARE WALKOM Counsel: MR M TAYLOR - Solicitor: VARGA LAWYERS Second Respondent: NELSON ROSS WALKOM Counsel: MR M TAYLOR - Solicitor: VARGA LAWYERS Third Respondent: SAMUEL FELIX WALKOM Counsel: MR M TAYLOR - Solicitor: VARGA LAWYERS Fourth Respondent: MADELINE GRACE GERBERT Counsel: MR M TAYLOR - Solicitor: VARGA LAWYERS Fifth Respondent: JANINE HELEN WALKOM Counsel: MR G EDMONDS-WILSON KC - Solicitor: TRELOAR & TRELOAR Hearing Date/s: 27/05/2025 File No/s: CIV-23-013766 B SUPREME COURT OF SOUTH AUSTRALIA (Civil: Application) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment. The onus remains on any person using material in the judgment to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court in which it was generated. In the Estate of WALKOM (DECEASED) EARL v WALKOM (No 2) [2025] SASC 91 Judgment of the Honourable Justice Stanley 6 June 2025 SUCCESSION - CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS - CONSTRUCTION GENERALLY - PRINCIPLES OR RULES OF CONSTRUCTION - WHERE UNCERTAINTY SUCCESSION - CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS - CONSTRUCTION GENERALLY - PRINCIPLES OR RULES OF CONSTRUCTION - READING WILL AS A WHOLE PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - COSTS OUT OF FUND OR PROPERTY - LITIGATION NOT CAUSED BY TESTATOR PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL RULE: COSTS FOLLOW EVENT - GENERAL PRINCIPLES AND EXERCISE OF DISCRETION This is an application for costs arising from an application for advice and direction as to the proper constructions of the will (the will) of Marie Clare Walkom (the deceased). The applicant, Peter Anthony Earl (the executor) is the appointed executor of the deceased’s estate. -- 1 of 8 -- The executor instituted proceedings pursuant to s 69 of the Administration and Probate Act 1919 (SA) on 28 November 2023 seeking advice in relation to the construction of the will. The need for advice and direction arose from the manner in which the will had been drafted, in particular clause 6.4. The executor was uncertain as to how the estate should be distributed given the terms of clause 6.4. He required the Court’s advice as to the proper construction of the will. This required the Court to have the competing construction arguments put by the affected parties. The fifth respondent, Janine Helen Walkom (Janine), the widow of Ian William Walkom (Ian), a child of the deceased and a beneficiary of the deceased’s will, contended that the estate ought to be distributed pursuant to clause 6.4(a). The first to fourth respondents, being the grandchildren of the deceased, contended that clause 6.4(c) was the decisive provision. While ultimately the Court advised that the will should be construed in accordance with the construction propounded by the grandchildren rather than the construction propounded by Janine; the Court recognised that the question of construction would have been difficult to determine without the roles played by counsel for Janine and the grandchildren. Having obtained the necessary advice and direction from the Court the parties could not agree the question of costs. At issue was whether the Court should follow the usual order that costs follow the event, or whether good reason existed to depart from the usual order and instead apply the probate costs rule. The grandchildren contended that costs should follow the event as this is adversarial litigation, and Janine was pursuing her own financial interest. The grandchildren’s position was challenged by Janine and the court found that in actuality each party sought to persuade the Court to adopt a construction most favourable to their financial interest. The attempt to persuade the Court in itself was not what necessitated the proceedings, but rather it was the poor drafting of the will that needed to be resolved. The Court’s power to award costs is conferred by s 40 of the Supreme Court Act 1935 (SA) and Chapter 16, Part 4 of the Uniform Civil Rules 2020 (SA). The Court has a broad discretion in making an order as to costs. Held: 1. There was good reason to depart from the usual order that costs should follow the event, as not departing would visit an injustice on Janine given the critical role she played in assisting the Court to resolve the issue of constructional choice. 2. Application of the probate costs rule was appropriate given that it was reasonable for the parties to put their case on the issue of construction before a judge in a contested hearing. 3. Costs of the executor and the respondents be paid out of the deceased’s estate on an indemnity basis. Administration and Probate Act 1919 (SA) s 69; Succession Act 2023 (SA); Supreme Court Act 1935 (SA) s 40; Uniform Civil Rules 2020 (SA) Chapter 16, Part 4, referred to. Fielder v Burgess [2014] SASC 98; Public Trustee v Taylor (No. 2) [2020] SASC 213; In the Estate of Wenham (No. 2) [2023] SASC 135; Roche v Roche & Anor (No. 2) [2017] SASC 75, applied. -- 2 of 8 -- In the Estate of WALKOM (DECEASED) EARL v WALKOM (No 2) [2025] SASC 91 Civil STANLEY J: 1 This is an application for costs arising from an application for advice and direction as to the proper construction of the will (the will) of Marie Clare Walkom (the deceased).1 Background 2 The applicant, Peter Anthony Earl (the executor) is the appointed executor of the deceased’s estate. The first to fourth respondents are the grandchildren of the deceased. The fifth respondent, Janine Helen Walkom (Janine), is the widow of Ian William Walkom (Ian), a child of the deceased and a beneficiary of the deceased’s will. 3 The executor instituted proceedings pursuant to s 69 of the Administration and Probate Act 1919 (SA) on 28 November 2023 seeking advice in relation to the construction of clause 6.4 of the will. The executor obtained counsel’s advice in relation to its construction. Counsel advised, inter alia, that the proper construction of the will should be made the subject of an application for a binding determination of the Court. 4 On 15 December 2023 Associate Justice Bochner ordered the joinder of the grandchildren, and the service on Janine of the originating application and supporting documents. On 16 February 2024, Janine was joined as the fifth respondent by order of Bochner AsJ. 5 Janine contended that the estate of the deceased ought to be distributed pursuant to clause 6.4(a) of the will. The grandchildren contended that clause 6.4(c) was the decisive provision. The significance of the constructional choice was that if the grandchildren’s construction was preferred, they would receive one sixth of the deceased’s estate between them and Janine would receive one sixth of the estate. If Janine’s construction was preferred, the grandchildren would receive nothing, and Janine would receive one third of the estate. 6 Janine submitted that in accordance with clause 6.4(a), Ian, who passed away eight weeks after the deceased, had ‘survived’ the deceased, and his estate was therefore entitled to one third of the deceased’s estate. The grandchildren submitted that as clause 6.4(c) applied, Janine was only entitled to the one third of the deceased’s estate if Ian had both survived the deceased and had attained a 1 Earl v Walkom & Ors [2025] SASC 71. -- 3 of 8 -- [2025] SASC 91 Stanley J 2 vested interest. While Ian had survived the deceased, his interest had not vested before he died. 7 I heard this matter for argument on 27 June 2024. I delivered judgment on 20 May 2025. I advised that clause 6.4 of the will should be construed in accordance with the construction propounded by the grandchildren rather than the construction propounded by Janine. 8 The executor estimates the value of the deceased’s estate to be $2,051,557.47.2 9 The Court’s power to award costs is conferred by s 40 of the Supreme Court Act 1935 (SA) and Chapter 16, Part 4 of the Uniform Civil Rules 2020 (SA). Offers of settlement 10 The grandchildren made three offers to Janine throughout the course of the proceedings. 11 The first offer was a Calderbank “style” offer, made on 26 April 2024, to settle with the effect that Janine would receive a legacy of $100,000 from the share of her late husband Ian, and the residue would otherwise be administered in accordance with clause 6.4(c) of the will. Had Janine accepted, she would have received an extra $50,000 to her entitlement following judgment. 12 The second offer was a formal offer filed on 5 June 2024. This offered to pay the costs of the fifth respondent on the standard costs basis up to fourteen days after the service of the formal offer. 13 The third offer was a Calderbank “style” offer, made on 14 June 2024, effectively with Janine receiving an additional $113,975, had she accepted. Claims as to costs 14 The executor sought an order, by consent, that subject to any other direction of the Court, the executor’s costs of and incidental to the application be paid out of the deceased’s estate on the footing of an indemnity. 15 The grandchildren sought the following orders: (i) Janine reimburse the deceased’s estate for the costs incurred by the executor from 10 May 20243 on the standard costs basis to be agreed or taxed; 2 Affidavit of Peter Anthony Earl affirmed 17 November 2023 (FDN 2) at [31]-[39], Exhibit PAE-6. 3 The orders sought were for reimbursement of the costs incurred by the executor from 10 May 2024 on the standard costs basis. However, the offer was specified to be from the expiry of the April offer which was 3 May 2024. -- 4 of 8 -- [2025] SASC 91 Stanley J 3 (ii) Janine pay the costs incurred by the grandchildren on the following bases to be agreed or taxed: (a) on the standard costs basis from 15 December 2023 until 9 May 2024; and (b) on an indemnity basis from 9 May 2024; (iii) the executor is directed that Janine is not entitled to receive the distribution of her share of the residuary estate from the executor until such time as Janine pays into the estate and pays to the grandchildren, by payment to the executor, and by payment to the grandchildren, the legal costs of these proceedings which she has been ordered to pay by orders (i) and (ii) herein; (iv) in lieu of Janine paying into the estate by payment to the executor and in lieu of Janine paying the grandchildren the costs referred to in order (iii) above, the executor is at liberty to calculate Janine’s share of the residuary estate and distribute the residuary estate to the other residuary beneficiaries on the footing that the costs referred to in order (iii) above are set off against the share of the residuary estate that Janine otherwise would be entitled to receive. 16 Janine sought the following orders: (i) the costs of and incidental of the grandchildren (other than the costs of and incidental to affidavit FDN 8) should be paid out of the estate of the deceased on a standard costs basis; (ii) the costs of and incidental of Janine should be paid out of the estate of the deceased on a standard costs basis; and (iii) in the alternative, there should be no order as to the costs of Janine of the action. The applicable principles 17 I have explained the principles in relation to costs in judicial advice cases in Public Trustee v Taylor (No. 2)4 and in In the Estate of Wenham (No. 2).5 The explication of those principles adopts the analysis of Kourakis CJ in Fielder v Burgess6 and Roche v Roche & Anor (No. 2).7 That analysis explains the narrowing of the probate costs rule. The Chief Justice said:8 4 [2020] SASC 213 at [11]-[17]. 5 [2023] SASC 135 at [12]. 6 [2014] SASC 98. 7 [2017] SASC 75. 8 In the Estate of Wenham (No. 2) [2023] SASC 135 at [12]. -- 5 of 8 -- [2025] SASC 91 Stanley J 4 It is not obvious to me why a testator's fault in the making of a will should result in a loss to the successful beneficiary in litigation over the estate. True it is there is a public element to the resolution of disputes over estates. It is for that reason that the probate costs rule is generally framed in terms of applying when there are reasonable grounds to require the person propounding a doubtful will or contending for a particular construction of an ambiguous provision to make out their case before a judge in a contested hearing. However, the bottom line is that the disputes are between private parties advancing competing claims to the testator's bounty for their private financial benefit. Of even greater contemporary significance is the effect of the old probate costs rule on parties to litigation of this kind. The probability of the payment of the costs of all parties out of the estate irrespective of the result gives the parties little incentive to make appropriate decisions as reasonable self-funded litigants about their prospects of success, and the proportionality of the expense incurred in bringing or defending proceedings. I cannot see any utility in putting the beneficiaries to the expense of a contested hearing and depleting the estate in cases in which the ultimate result of litigation is clear notwithstanding the suspicion or ambiguity clouding the will. … A person will not be penalised for invoking this Court's supervisory jurisdiction in probate when the circumstances call for an investigation into the validity of a testamentary document. However, a person who challenges a testamentary disposition will risk an adverse costs order for persisting in an unmeritorious action after the discovery of evidential material which largely dispels any reasonable concerns. If a party ignores the weight of that evidential material and prosecutes an ultimately unmeritorious case to trial, the usual order that costs follow the event will be made. Exceptions from the ordinary order will not be made to allow beneficiaries a forum in which to air family disputes with impunity. 18 As the reasons of the Chief Justice make clear while the room for application of the probate costs rule has contracted there are circumstances in which it can still operate. It would be unwise to attempt to identify exhaustedly those circumstances. The parties’ submissions 19 Janine submits that in the circumstances in which it became necessary for the executor to have the Court determine the issues raised in the action, it was reasonable for her to act as a contradictor and put the construction arguments which the executor’s counsel had identified arose for determination. That was not a role the executor could play. 20 The fact that it was in her financial interests for the Court to determine the issue of construction in the manner identified by Mr Crocker in his opinion, is not in itself a reason to deprive her of costs or to make her pay the “winner’s” costs of action. There was a need for the Court to have the competing construction arguments put by the affected parties. The role of the executor is to be neutral and to allow the affected parties to put submissions on the construction issue. This is not a case where costs following the event is the determinative consideration, particularly where the drafting solicitors were the cause of the issue arising for determination by the Court. -- 6 of 8 -- [2025] SASC 91 Stanley J 5 21 In the alternative, if the Court did not accept that contention, then Janine submits there should be no order as to her costs of the action. 22 The grandchildren submit this is adversarial litigation between competing beneficiaries. Costs should follow the event. It was a contested application and the usual approach to hostile litigation ought to apply. The grandchildren submit the probate cost rule does not apply. Janine was pursuing her own financial interest. She unreasonably maintained her position, rejecting or failing to respond to multiple reasonable offers. The grandchildren submit Janine should have accepted the offers made by them, and she ought to reimburse the costs incurred by the executor from the expiry of the 26 April 2024 offer. 23 The grandchildren submit that the circumstances of this case justify making a costs order in their favour on an indemnity basis. 24 The grandchildren submit Janine should not be entitled to receive her interest as a beneficiary until costs have been paid and, the Court should direct the executor to withhold the distribution of her interest until she has either satisfied the costs orders, or until such a time that they have been set off against her interest in the estate. The will 25 Clause 6.4 of the will is ambiguous and, as a result, the constructional choice was difficult. That difficulty was reflected in the advice the executor obtained from counsel which accorded with the construction propounded by Janine. The need for advice and direction arose from the manner in which the deceased’s solicitor had drafted the deceased’s will. The deceased’s last will was drafted in 2019. The 2019 will reflected the terms of a previous will made in 2014. The 2014 will was drafted by a paralegal employed by the deceased’s solicitor, Mr Fisher, and it was settled by another solicitor in the firm, Ms Catherine O’Donovan. Mr Fisher died in 2018. It is unclear who drafted the 2019 will. It may have been Ms O’Donovan, but she has no recollection of doing so and nothing in the solicitor’s file throws any light on that matter. Importantly, the 2019 will was almost identical to the 2014 will. The 2019 will only updated the executor clause in the 2014 will. The terms of clause 6.4 did not change. Consideration 26 The Court has a broad discretion in making an order as to costs. It may have regard to any factors it considers relevant, but the exercise of the discretion must be for reasons connected to the litigation. However, the usual order is that costs follow the event. 27 In exercising the costs discretion, I consider that in this case there is good reason to depart from the usual order that costs should follow the event. While Janine’s conduct in not accepting reasonable offers, or positing offers of her own, smacks of the pursuit of her own financial interests in this matter, the proceedings -- 7 of 8 -- [2025] SASC 91 Stanley J 6 were necessitated by the poor drafting of the will. I accept that in Fielder v Burgess the Chief Justice said that it is not obvious why a testator’s fault in the making of a will should result in a loss to the successful beneficiaries in litigation over an estate. However, I am not sure that the same proposition applies where the error is not that of the testator, but his or her solicitor. As the Chief Justice went on to say, the legal policy applicable to probate cases recognises that there is a public element to the resolution of disputes over estates. It is for that reason that the probate costs rule is generally framed as applying when there are reasonable grounds to require the person contending for a particular construction of an ambiguous provision in a will to make out their case before a judge in a contested hearing.9 28 In this case the executor was in a genuine state of uncertainty as to how to distribute the third share of the residue which was valued in excess of $2,000,000. The executor required the Court’s intervention in order to resolve that problem. The Court required each party to make submissions as to the proper construction of the will, and in particular clause 6.4, in order to enable the Court to interpret the will. It is difficult to see how the question of construction could have been determined without the roles played by both counsel for Janine and the grandchildren. While each party sought to persuade the Court to adopt a construction most favourable to their financial interest, recognition of that fact does not detract from the proposition that the executor could not resolve the difficulty in which he found himself without the role played by each party. In these circumstances, it is entirely appropriate to apply the probate costs rule. 29 To award costs on the usual basis that costs should follow the event would be to commit an injustice on the critical role played by Janine in assisting the Court to resolve the issue of constructional choice. To adopt the language of the Chief Justice in Fielder v Burgess, there were reasonable grounds to require each of the contending parties to make out their case on construction before a judge in a contested hearing. 30 In the circumstances the failure to the fifth respondent to accept the offers does not provide a sound basis to make the orders sought by the first to fourth respondents. While the first to fourth respondents were successful and the making of costs orders indemnifying the parties will injure their financial position, that is the inevitable result of applying the probate costs rule in this case. Conclusion 31 In this case I would order that the costs of the executor and the respondents be paid out of the deceased’s estate on an indemnity basis. 9 Fielder v Burgess [2014] SASC 98 at [61]. -- 8 of 8 --