In Bezjak v Wyatt (No 2)  NSWSC 232 the Supreme Court of New South Wales dismissed a family provision suit by an eligible claimant. Some two months prior to the court hearing, the legal representatives of the estate made a genuine offer of compromise to settle the claim ($40,000 plus claimant’s legal costs). The court ordered the claimant pay-
- all the estate’s legal costs from the day after the compromise offer was made (i.e. costs on an indemnity basis); and
- the estate’s reasonably necessary costs up to and including the date of compromise offer was made (i.e. party costs on an ordinary or standard basis).
Counsel for the claimant did not identify a rational basis for the court to use its substantial discretion in family provision claims to depart from the usual rules of: costs following the event; and indemnity costs following a compromise offer where the outcome is no less favourable.
Takeaway: Being eligible to make a valid family provision claim against an estate does not mean that a court will not make harsh legal costs orders against an unsuccessful claimant to reimburse the estate’s legal costs of having to defend the claim.