Can you imagine spending half a million dollars in legal fees?

million dollars in legal fees

This is exactly what happened in the recent decision of Karpin v Gough [2022] NSWSC 471.

By way of background, this case involved a question as to whether the deceased and the applicant were in a de facto relationship.

The estate in this matter was valued at about $11,400,000 and comprised of a house at Hunters Hill and some bank accounts. Although, the applicant alleged that the estate was worth considerably more, somewhere in the order of $60,000,000.

By his Will, the deceased:

  • gave $500,000 to a long-standing employee (his building manager);
  • established a $2,000,000 fund to care for his second wife (who predeceased him); and
  • left the balance of the estate to his three daughters.

No provision was made for the applicant, Ms Karpin. Ms Karpin alleged that she and the deceased were in a de facto relationship.

The Court held that although Ms Karpin was an eligible person, there were no factors warranting the making of her application. The Court found that:

  • the de facto relationship between Ms Karpin and the deceased was not in existence at the time of death;
  • it was a short relationship (less than a year);
  • the deceased’s overriding obligation was to his wife and kids;
  • after the deceased made his Will, the benefits provided by the deceased to Ms Karpin, outweighed and discharged any moral obligation to Ms Karpin.

Ultimately, the Court dismissed Ms Karpin’s application.

What is interesting in this case, is the amount of costs. Ms Karpin’s estimated costs were $253,000 and the defendant’s estimated costs were $250,600.

Her Honour Ward CJ commented on the costs in this matter stating that it was concerning that the costs were of a substantial amount, having regard to the benchmarks ordinarily contemplated for such an application.

Notwithstanding, the comments made about costs, her Honour made the usual costs order for this kind of claim, that is, her Honour ordered that the applicant’s costs were to be paid out of the deceased’s estate. In this case, her Honour stated that the application was not so misconceived as to warrant an order that the applicant bear her own costs.

The parties then made submissions regarding the applicant rejecting an Offer of Compromise and there was a second decision published (Karpin v Gough (No 2) [2022] NSWSC 471 (27 May 2022). In the second case, her Honour ordered that the applicant pay the defendant’s costs on the ordinary basis up to and including 6 November 2020 (the date of the offer) and thereafter on the indemnity basis.

Costs are at the discretion of the Court. It cannot be guaranteed that costs will be paid out of an estate in every situation.

If you have any questions about costs, please contact our team of lawyers for a confidential discussion on 1300 408 766.

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