Court costs when contesting a will for family provision – who pays?

Court costs in contesting a will may run into thousands.

If you are thinking of making a claim for family provision under a will despite all efforts to find a solution including mediation, don’t assume that your costs will be paid out of the estate; at least in New South Wales.  What happens  depends on individual circumstances.

In recent years the New South Wales Supreme Court has “thoroughly discredited”¹ the expectation that the costs of making a family provision claim will automatically be paid out of the estate.

Family provision claims – the “overall justice of the case”

The High Court has said that claims for family provision cases are different to others when it comes to considering costs, where costs follow the event.²  Instead, costs will depend on the overall justice of the case.¹  This means that the Court won’t necessarily follow the usual rule in civil proceedings that costs follow the event. Costs following the event means that the successful party or the “winner” has their costs paid for by the losing party.  And it may not cover all of the winner’s costs.

Court costs – the Court has a wide discretion in deciding who pays

In claims for family provision from a deceased estate the Court has a wide discretion in ordering who pays the costs of proceedings.  This is done after the Court has made its decision.

Example

In one case the Court said that it is now more common for the unsuccessful party to be ordered to pay the costs of the successful party. These costs are in addition to the party paying their own costs.¹ 

The Court said it can happen that no order may be made for costs to an applicant.  Especially where to do so would have a detrimental effect on them financially.¹

In other words in this situation the applicant is not being required to pay the other side’s costs only their own.  In other situations it may be appropriate for the unsuccessful party to have their costs paid out of the estate, depending on the circumstances.

The executor defends the will

It is the role of the named executor/s or appointed legal personal representatives in a deceased’s will to defend that will and its terms should anyone contest it.  This is because it is your will which speaks for you after death and the people charged with ensuring your wishes go into effect are those whom you appointed as your executors.  

Awarding costs – the Court’s power

The court’s authority to decide who pays what regarding costs of legal proceedings is provided for in legislation and rules of the court.   Practice Notes issued by the Court are also important (see below). In each state and territory a specialised division of the Supreme Court deals with contesting a will.

In New South Wales power to the courts about costs is given by the Civil Procedure Act 2005 (NSW).  The applicable legislation for family provision matters is Chapter 3 of the Succession Act 2006 (NSW).   Links to legislation for the other states can be found here.

The Succession Act 2006 (NSW) gives the Court a discretion to order that costs of family provision proceedings including mediation costs be paid out of the estate, notional estate or both, in “such manner as the Court thinks fit”: ‘Costs’, section 9 of the Family Provision Act 2006 (NSW).

Mediation requirement

In 2009 the New South Wales Parliament passed new laws, requiring the court to refer all family provision claims to mediation except in special circumstances.  At the time the Attorney General said that the changes were to give judges powers to limit legal costs in will disputes, and to limit the use of expert witnesses, medical reports and valuations where unnecessary.

Some courts publish information from time to time on the requirements and procedures to be followed in the form of Practice Notes applying to an area of practice.  The Supreme Court of New South Wales issues a Practice Note applying to Family Provision matters. 

It makes a big difference to the final costs bottom line if parties can negotiate and resolve issues themselves with their respective representatives.  Things like interlocutory hearings and skirmishes, that is short hearings to resolve some issue/s before the final hearing significantly increase costs. As do when mediations have to be appointed by the Court rather by the parties seeking mediation arrangements themselves.  

Court costs in family provision in NSW may be capped in small estates

The above Practice Note for family provision sets out matters relating to the practice and procedure of the Court, such as the documents the applicant must submit, the information required and when, the first directions hearing, mediation, evidence required, required wording for documents and the like.  The Practice Note contains an important direction on costs of proceedings whereby the Court has power to make an order capping the costs which may be recoverable if an estate has less than $500,000 available for distribution:

24. Orders may be made capping the costs that may be recovered by a party.  This might be in circumstances in which the net distributable value of the estate excluding costs of the proceedings is less than $500,000.

Who pays depends on what the court orders

Possible outcomes in a court order may include:

1. the losing party pays the costs of the winner (party to party), in addition to their own costs (solicitor/client³);
2. each side pays their own costs;
3. payment of a part of the other side’s costs they incurred on a particular issue;
4. costs of one or both sides may come out of the estate.  For example the defending executor’s costs may be paid from the Estate on the indemnity basis;
5. no costs are paid from the estate;
6. no order is made in relation to an applicant plaintiff’s costs because the court intends the plaintiff pays their own costs of the proceedings;
7. other – “in such manner as the Court thinks fit”: see section 9 of the Family Provision Act 2006 (NSW) on costs. 

A Podcast:  How much will this cost me?   An introduction to legal costs on Lawfully Explained produced by the Law Society of NSW.  On LiSTNR, Apple Podcasts and Spotify.

What factors can affect decisions on costs?

As mentioned the Court has a wide discretion in awarding an order for costs.  Depending on the circumstances, some examples of factors that may be taken into account are:

1. Whether a litigant has given any kind of settlement offer to their opponent.  Whether a party made an offer of compromise to bring the matter to an end, and if so what happened.
2. How genuine was the offer?  Was it refused? Or was it unreasonable in the circumstances?
3. Matters such as the willingness of each party to compromise.  And what efforts did they go to in order to avoid a court hearing may come into it.
4. Whether the person starting court action acted reasonably.
5. Whether the defending party acted reasonably in defending their position.
6. Whether a litigant’s claim (and indeed any offer to settle) was frivolous, vexatious, misconceived, made without any proper basis, made without any reasonable chances of success.  This causes loss of time to the Court – and to the defendant circumstances in which a Court can make a special costs order against the litigant.
7. Whether the applicant was guilty of some improper conduct during proceedings.
8. Whether the estate was a small one; such as where the amount available for distribution was less than $500,000. In these cases the Practice Note in New South Wales (see above) states that the Court may cap costs.
9. Just because an estate is small does not excuse unreasonable or uncooperative conduct of a party.  If so they may find themselves up for costs.
10. In modest estates with beneficiaries of modest means, each person’s claim taken together may be way out of proportion to the size of the estate.

Talk things over if at all possible to resolve the matter

Resolving grievances and competing claims among beneficiaries, usually members of the same family, is challenging and stressful.  Lawyers and litigation is expensive.  It can deplete the estate.  It is in everyone’s interest to settle things quickly and quietly. The law requires parties to undergo mediation before court hearings.  Some recommend that parties undertake this step sooner in the process rather than later.  The idea is to resolve issues or at least some and so contain costs. 

As always, professional legal advice should be sought on individual circumstances. Find legal practitioners from ‘Find a solicitor’ searches on the law society website in your state or territory.

1.  Harkness v Harkness (No 2)[2012] NSWSC 35, per Hallen AsJ
2.  Singer v Berghouse [1993] HCA 35
3.  Solicitor/client costs are those costs the solicitor charges their client.

3 February 2015, updated June 2023

B Stead
BHS Legal