Annett v Nurmela - [2019] NZHC 1219

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000270

[2019] NZHC 1219

UNDER the Law Reform (Testamentary Promises) Act 1949

IN THE MATTER

of an appeal against a decision of the Family Court at Auckland

BETWEEN

PAULINE GLYNN ANNETT
Appellant

AND

PENTTI JUHANI NURMELA

First Respondent

PENTTI JUHANI NURMELA as

administrator in the estate of ANTTI MATIAS NURMELA

Hearing: On the papers

Judgment:

31 May 2019

JUDGMENT OF DOWNS J

This judgment was delivered by me on Friday, 31 May 2019 at 3 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:
Stainton Chellew, Auckland.
Cinque Oakley Senior, Australia. SL Robertson QC, Auckland.

ANNETT v NURMELA [2019] NZHC 1219 [31 May 2019]

[1]Mr Andy Nurmela died without a will. Andy’s estate was worth approximately

$1.4 million. Ms Pauline Annett provided Andy some care in the seven or so months before his death. For example, she visited with meals and organised appointments. Ms Annett brought a claim for 90 percent of Andy’s estate under the Law Reform (Testamentary Promises) Act 1949. Judge L de Jong upheld the claim, but only to the value of $25,000.1 Ms Annett appealed. I allowed the appeal, but only to the value of
$75,000.2 Mr Peter Nurmela, Andy’s brother, had earlier offered to settle the claim
for $100,000.

[2] Judge de Jong held Ms Annett should pay Mr Nurmela costs of $27,319.87 and disbursements of $4,793.04. The Judge recognised Ms Annett had achieved some success, but concluded Mr Nurmela should have increased costs because:

(a)Of Mr Nurmela’s settlement offer, which as observed, was $25,000 more than Ms Annett ultimately received.

(b)Ms Annett unreasonably declined that offer.

[3] The Judge said, “Ms Annett was completely misguided about what a reasonable award would be”.3 And, her claim for more than $1,000,000 was “unrealistic”.4

[4] Ms Annett appeals the Judge’s costs decision. She contends she should have received costs—not been made to pay them—and even if she is liable to pay costs, they should not have been increased by 50 percent. Ms Annett submits the Judge erred because he:

(a)Placed undue weight on the settlement offer.

(b)Wrongly concluded Ms Annett unreasonably declined that offer.

1      Chen v Nurmela [2018] NZFC 3810.
2      Annett v Nurmela [2018] NZHC 2841.
3      Chen v Nurmela [2019] NZFC 323 at [21](e).
4      At [21](e).

[5] Ms Annett emphasises the sincerity of her belief she was entitled to 90 percent of Andy’s estate.

[6] It is common ground the District Court Rules 2014 provide for increased costs when a party fails, without reasonable justification, to accept an offer of settlement.5

[7] The Judge was entitled to consider Mr Nurmela’s settlement offer when deciding costs. The offer was made well before the hearing, and without prejudice, save as to costs. It was unambiguous. Mr Nurmela said he would pay Ms Annett
$100,000 if she abandoned her claim. And, Mr Nurmela offered more money than Ms Annett ultimately received.

[8] Importantly—indeed…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2019] NZHC 1219
Decision Date: 31 May 2019

CaseChat Overview and Summary

In the case of Annett v Nurmela, Pauline Glynn Annett sought to claim 90 percent of Andy Nurmela's estate, valued at approximately $1.4 million, under the Law Reform (Testamentary Promises) Act 1949. Annett had provided care to Andy in the months leading up to his death. The Family Court initially awarded Annett $25,000, which was subsequently increased to $75,000 by the High Court. The appeal centred around the court-ordered costs, which Annett contested as being disproportionate given her partial success in the appeal.

The primary legal issues in the case were whether the Judge had erred in placing undue weight on the settlement offer made by Andy’s brother, Peter Nurmela, and whether Annett's refusal to accept this offer was reasonable. Annett argued that she was genuinely convinced of her entitlement to a much larger portion of the estate, and she did not unreasonably decline the settlement offer. The court was required to determine the reasonableness of Annett's actions and whether the costs awarded were justified under the circumstances.

The High Court held that the Judge was correct in considering the settlement offer when deciding the costs, as it was made well before the hearing and was unambiguous. The court concluded that Annett's refusal to accept the $100,000 offer was unreasonable, given the modest nature of her care for Andy and the unrealistic nature of her claim for almost the entire estate. The court rejected Annett's argument that she lacked full information at the time of the offer, finding that Peter Nurmela’s affidavit evidence was credible despite some confusion. The appeal was allowed only to correct certain errors in the calculation of costs, but the overall costs decision was upheld.

In conclusion, the appeal was partially successful in correcting specific errors in the costs calculation but did not overturn the Judge’s decision regarding the reasonableness of the costs awarded. The court's decision stands with the noted corrections.

Orders