Background
Barbara Keighran sought family provision from the estate of her late husband Allan, who died on 29 July 2023. Allan’s will, made three weeks before his death, left his entire estate to his five adult children in equal shares and nothing to Barbara. The primary asset in dispute was the Berkeley Vale residential property, valued between $850,000 and $950,000, which Allan and Barbara had owned as joint tenants until Allan severed the joint tenancy two days before his death. During Allan’s final illness, a bitter dispute emerged between Barbara and two of his children, Michelle (the executor and eldest daughter) and Bre-Allan, concerning his care. In December 2025, Justice Brereton delivered a substantive judgment granting Barbara a family provision order providing her with Allan’s interest in the Berkeley Vale property, subject to a charge securing a $125,000 obligation (indexed) payable to the estate upon sale.
This judgment addresses the costs of the entire family provision application. Barbara’s legal costs through trial were estimated at $255,000 (including GST and disbursements), while Michelle’s costs were estimated at $194,040—figures approaching the size of Allan’s estate itself. The parties had exchanged settlement offers: Barbara made a Calderbank letter (28 October 2024) and an Offer of Compromise (18 August 2025) contemplating transfer of the Berkeley Vale property with Barbara assuming mortgage responsibility; Michelle offered a Crisp arrangement (limited life estate) in her Offer of Compromise (7 August 2025).
The Court’s Holding
Justice Brereton held that the defendant (Michelle as executor) must pay the plaintiff’s costs, but discharged this obligation by revoking the $125,000 charge over the property, effectively giving Barbara the Berkeley Vale property free of encumbrance. The Court applied the general rule that costs follow the event—Barbara having succeeded in obtaining a family provision order—but exercised its discretion in light of the “overall justice of the case.”
The Court analyzed both settlement offers and concluded they were irrelevant to the costs question because the outcome fell between the parties’ respective positions: the result was less favorable to Barbara than her own offers but more favorable than Michelle’s offer. Critically, neither party had demonstrated willingness to settle on terms less favorable than they ultimately achieved, so neither secured costs protection. The Court emphasized that the powerful deterrent of adverse costs orders should incentivize settlement in family provision cases, particularly where legal expenditure threatens to consume modest estates.
In deciding to order costs against the executor despite her duty to represent other beneficiaries, the Court found that while Michelle had legitimate representative functions, this did not justify acrimonious and expensive litigation on a modest estate. Notably, the Court observed that approximately $130,000 had been transferred from Allan’s bank account shortly before and after his death (with Michelle’s involvement), and Allan’s car had been given to Bre-Allan, suggesting the estate would have had approximately $170,000 available to fund litigation—funds that should have covered Michelle’s costs without impacting the family provision order.
Key Takeaways
- In family provision cases, costs follow the event as a general rule, though courts retain discretion to order otherwise based on the overall justice of the case.
- Settlement offers that do not represent genuine compromise on terms more favorable than the likely litigation outcome provide no costs protection to either party.
- Executors defending family provision claims cannot treat the threatened liability to pay costs as a license for acrimonious or disproportionately expensive litigation, particularly in modest estates.
- Courts will scrutinize whether estate assets have been preserved to fund the litigation and will consider improper distributions when assessing the executor’s conduct and costs entitlement.
Why It Matters
This decision provides crucial guidance on costs discipline in family provision disputes, which frequently consume substantial resources relative to estate value. Justice Brereton’s reasoning demonstrates that Australian courts view the incidence of legal costs as a critical policy consideration in succession litigation. The emphasis on settlement incentives and proportionality reflects judicial recognition that legal fees can leave all parties, including successful claimants, materially worse off than consensual resolution would have achieved. The Court’s willingness to discharge costs through property transfers rather than cash payments also offers a practical solution where estate assets are depleted.
The decision underscores that executors, while having representational duties to beneficiaries, remain subject to ordinary principles of proportionality and reasonableness in litigation. The Court’s findings concerning the $130,000 in transfers shortly before and after death also signal judicial scrutiny of executor conduct when assessing fairness in costs outcomes. For practitioners advising family provision claimants, the judgment reinforces the importance of making reasonable settlement offers structured to demonstrate genuine compromise, as vague or conditional offers will not generate costs protection if litigation occurs.