Annett v Nurmela
[2019] NZHC 1219
•31 May 2019
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
AppellantAND
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 decisively—the Judge was right to conclude Ms Annett acted unreasonably in not accepting this offer. It was made after all evidence had been filed. Applicable law was settled. Ms Annett should have appreciated her claim for 90 percent of the estate was unrealistic. Ms Annett provided Andy modest help over a brief period only. His promise (to her) of his entire estate was made in circumstances of vulnerability, and shortly before his death. Given these features, case law implied any award would not be great. That Ms Annett sincerely believed she ought to have received more than $1,000,000 is beside the point. The issue is whether she unreasonably rejected the settlement offer. Like the Judge, I am satisfied she did.
[9] This should not surprise. I said precisely this when I increased the Judge’s award of $25,000 to $75,000:6
This conclusion should not obscure the obvious. Ms Annett’s claim for almost the entire estate, and then $700,000 on appeal, was unrealistic.
I repeated the same observation when determining costs in relation to the appeal.7
[10] Ms Annett argues Mr Nurmela’s affidavit evidence (in opposition to the application) was “clearly wrong and misleading”, so Ms Annett “did not have all relevant evidence at the time the offer was made”. I do not accept this submission for
5 District Court Rules 2014, r 14.6(3)(b)(v).
6 Annett v Nurmela, above n 2, at [46].
7 Annett v Nurmela [2019] NZHC 247 at [4].
two reasons. First, it implies Mr Nurmela was less than candid in his affidavit evidence. This sits awkwardly with the record. Judge de Jong found Mr Nurmela became confused in his oral evidence, citing it as “a good example of the difficulty faced by witnesses relying on their memory of events between 10 and 20 years ago”.8 On appeal, Ms Annett contended Mr Nurmela’s evidence lacked credibility. I rejected that submission:9
… It is clear from the record Peter struggled to answer questions. His testimony is likely the product of confusion, not deceit. This conclusion is supported by the nature of the Judge’s questions to Peter, his Honour’s evident concern for the witness, and the Judge’s observation memory was the operative problem for Peter and other witnesses too.
[11] Second, Mr Nurmela’s evidence was always going to be peripheral, because what he did or did not do was not central to the claim (albeit a relevant consideration for the Judge).
It follows the appeal is without merit, subject to two modest caveats:
(a)The Judge did not offset $5,927.40, a sum to which Ms Annett was entitled before the settlement offer. Mr Nurmela acknowledges as much.
(b)The daily recovery rate should have been $1,780; not $1,790.
[13] The appeal is allowed, but only to correct [12](a) and (b). The Judge’s costs decision otherwise stands.
……………………………..
Downs J
8 Chen v Nurmela, above n 1, at [42].
9 Annett v Nurmela, above n 2, at [38].
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