Blakely v Ryan
[2023] NZHC 1529
•20 June 2023
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2020-409-522 CIV-2020-409-523
CIV-2020-409-524 [2023] NZHC 1529
IN THE MATTER OF the estate of MICHAEL GUY LANEY BETWEEN
JACQUELINE LEISA BLAKELY
Plaintiff
AND
MONICA MARY CHEYNE RYAN
First Defendant
IAN WILLIAM HALL
Second Defendant
Hearing: On the papers Appearances:
J M McGuigan and S D Campbell for Plaintiff
J V Ormsby, F B Barton and S A McClean for First Defendant C T Anderson for Second Defendant
Judgment:
20 June 2023
JUDGMENT OF MANDER J
[1] The plaintiff, Ms Jacqueline Blakely, is one of three daughters of the deceased, Mr Michael Laney, who died on 11 December 2019. His last will, dated 27 September 2012, provided specific legacies of $100,000 each to his three daughters. The remainder of the estate, including a residential property, was left to the first defendant, Mr Laney’s second wife, Ms Monica Ryan.
[2] In October 2020, the three daughters initiated a claim in relation to the deceased’s estate that comprised three separate proceedings. These sought to:
BLAKELY v RYAN [2023] NZHC 1529 [20 June 2023]
(a)remove Ms Ryan as executrix and trustee of the estate (CIV-2020-409- 522);
(b)set aside the deceased’s will on the grounds of undue influence (CIV- 2020-409-523); and
(c)make a claim under the Family Protection Act 1955 (FPA) (CIV-2020- 409-524).
These claims are referred to in this judgment as 522, 523 and 524, respectively.
[3] In March 2022, a notice of discontinuance was filed in respect of the 523 proceeding and, in July 2022, two of the three plaintiffs agreed to settle the litigation. Ms Blakely did not enter into this agreement. She obtained separate legal representation before filing an amended statement of claim and sought orders for the consolidation of proceedings 522 and 524 on the basis the rights of relief sought in respect of each arise out of the same series of events relating to the deceased estate. An order to that effect was made on 15 November 2022.1 Ms Blakely’s amended pleading also resurrected the undue influence claim that had been the subject of the discontinuance filed on her and her sister’s behalf.
[4] With the proceedings having now reached this juncture, various costs issues are sought to be pursued. Written submissions (some of inordinate length) have been filed and exchanged.
Discontinuance of 523 proceeding
[5] Ms Ryan seeks an award of costs against Ms Blakely in the sum of $7,807.33 for the discontinuance of the 523 proceeding. Ms Blakely resists any award.
1 Laney v Blakely HC Christchurch CIV-2020-409-522, 15 November 2022.
[6]Rule 15.23 of the High Court Rules (HCR) provides:
15.23 Costs
Unless the defendant otherwise agrees or the court otherwise orders, a plaintiff who discontinues a proceeding against a defendant must pay costs to the defendant of and incidental to the proceeding up to and including the discontinuance.
[7] The rationale behind this rule is that discontinuance reflects a form of success for the defendant and recognises the presumption that costs follow the event.2 This presumption can be displaced where it is just and equitable to do so,3 but a plaintiff bears the onus of persuading a court to exercise its discretion not to award costs.4 Whether the Court chooses to do so will be dependent upon the individual circumstances of the case. It may take into account a broad range of factors, including the reasonableness of the respective stances taken by the parties up to the point of discontinuance.5 Regard can be had as to why the parties brought and defended the proceeding and whether the plaintiffs have achieved substantial success or there has been some change in circumstance.6 In making this assessment, the court retains its overarching discretion as it relates to the issue of costs.7
[8] Ms Blakely argues the presumption in favour of costs has been displaced because this is not a situation where, at least insofar as her claim of undue influence is concerned it has been abandoned or substantively determined. Reliance is placed upon the fact Ms Blakely was not a party to the agreement her sisters entered to end their claims, and that after they settled, she filed an amended pleading that reinstated the undue influence allegation, the substantive merits of which are yet to be decided.
[9] Ms Blakely also seeks to rely on the wording of the plaintiffs’ notice of discontinuance, which stated that costs “… will be reserved until the related but separate proceedings in the matter of the estate of Michael Guy Laney are concluded”.
2 Powell v Hally Labels Ltd [2014] NZCA 572 at [19].
3 Kroma Colour Prints v Tridonicatco NZ Ltd [2008] NZCA 150, (2008) 18 PRNZ 973 at [12].
4 Deo Gratias Developments Ltd v Tower Insurance Ltd [2018] NZHC 1881 at [11].
5 David Bullock and Tim Mullins The Law of Costs in New Zealand (LexisNexis, Wellington, 2022) at [2.56]; Opus International Consultants Ltd v Colac Bay Vision Ltd [2015] NZHC 1782.
6 Powell v Hally Labels Ltd, above n 2, at [22]; Alarm New Zealand Ltd v 15 Hopetwun Ltd [2016] NZHC 2080 at [27], citing Fong v Wong (2010) 20 PRNZ 22 (HC) at [11].
7 High Court Rules 2016, r 14.1; Opus International Consultants Ltd v Colac Bay Vision Ltd, above n 5, at [24].
It is argued that Ms Ryan did not take issue with the notice in those terms at the time to suggest she intended to pursue the plaintiffs for costs in the 523 proceeding prior to the substantive resolution of the claim.
[10] In response to Ms Ryan’s claim to recover all her costs from Ms Blakely alone in respect of the discontinued 523 proceeding, reliance is also placed on the Court of Appeal’s observation in Hong v Deliu that “where costs are not sought against one unsuccessful defendant, it does not follow that the other should be liable for the whole scale measure of costs”.8 In reply, Ms Ryan emphasises that liability for costs on discontinuance is “joint and several” unless the Court otherwise directs.9
Decision
[11] I consider Ms Ryan is entitled to costs on the discontinuance of the 523 proceeding. As noted by Ms Blakely herself, she was not a party to the settlement agreement where the other parties expressly agreed there would be no issue as to costs in relation to the proceeding. Ms Ryan has never represented she would not seek costs on the discontinuance, which appears to have only become an issue when Ms Blakely resurrected her claim of undue influence on the filing of her amended statement of claim that included those allegations. I am informed by counsel that Ms Ryan’s agreement was not sought regarding the wording of the discontinuance and that she never agreed to costs being reserved or to the waiving of costs in respect of that proceeding. As noted, unlike her two sisters, Ms Blakely was not a party to any agreement regarding costs. Ms Ryan cannot therefore be held to the unilateral assertion set out in the notice of discontinuance.
[12] However, I consider Ms Blakely’s resistance to having to pay the full amount of the costs relating to the 523 proceeding lies on firmer ground. The settlement reached with the other two sisters was on the basis no issue as to costs would remain outstanding as between them. While that agreement does not bar Ms Ryan from seeking full recovery from Ms Blakely, Ms Ryan entered into agreement with the other two sisters knowing that matters remained unresolved with Ms Blakely and that she
8 Hong v Deliu [2016] NZCA 75, [2016] NZAR 667 at [24].
9 High Court Rules, r 14.14.
intended to proceed with the litigation. The pursuit of full costs against her in respect of the 523 proceeding appears partly to be a reaction to her persistence with that claim, rather than an assessment of where costs should fall as between the three plaintiffs at the time that proceeding was concluded. Notwithstanding Ms Blakely’s consent to the 523 proceeding being discontinued, she ought not, in the circumstances, have to subsidise a settlement (including as to costs) she was not a party to, nor be ‘punished’ for continuing with her undue influence claim, albeit as part of a consolidated proceeding. If the claim ultimately is without merit, Ms Ryan will of course have the right to seek costs at the conclusion of the litigation.
[13] Accordingly, I consider Ms Ryan is entitled to an order for costs in respect of the discontinued proceeding (523) against Ms Blakely calculated on the basis of a one- third share of the claim set out in the schedule attached to Ms Ryan’s memorandum of 9 December 2022, being the sum of $2,599.84. There will be an order to that effect.
[14] Ms Blakely has challenged the inclusion of some items prepared in relation to the judicial settlement conference and the preparation of joint memoranda. However, I am satisfied they are properly recoverable. To the extent Ms Blakely’s objection to the inclusion or calculation of these discrete items is arguable, any excess is readily absorbed by the way I have limited her liability for the unnecessary costs incurred as a result of the discontinued proceeding. This is notwithstanding her potential responsibility for the full amount of those costs which, as Ms Ryan argued, would have been incurred notwithstanding the number of plaintiffs — such is the robust approach that can be taken to the exercise of the Court’s wide discretion on costs.
Application for costs in respect of the 524 proceeding
[15] The 524 proceeding constituted a claim under the FPA. The amended statement of claim filed by Ms Blakely in respect of the 522 proceeding after her sisters settled effectively included a new FPA claim. While Ms Ryan has agreed to the consolidation of the FPA claims and the revival of the undue influence claim (the discontinued 523 proceeding) in the one amended statement of claim (proceeding 522), she argues there are cost implications arising from the way Ms Blakely has chosen to proceed.
[16] In particular, Ms Ryan argues the 524 proceeding was effectively discontinued prior to consolidation and that the inclusion of a new out of time FPA claim in the 522 proceeding was without first seeking leave or having obtained an order for consolidation. Ms Ryan submitted that her agreement to the consolidation of the pleadings and permitting Ms Blakely to pursue the FPA claim in the amended statement of claim (proceeding 522) was without prejudice to any claim for costs. It was argued on Ms Ryan’s behalf that all the claims should have been consolidated over two years ago, in November 2020, when she first proposed this be done, but the plaintiffs had opposed that course at that time. It was therefore submitted the separate 524 proceeding had been unnecessary and that costs should now be awarded to recognise how it has now effectively been discontinued.
[17] Ms Blakely’s response was to emphasise that the 524 proceeding has never been discontinued or abandoned, but simply consolidated in the 522 proceeding. She submits no steps had been taken by Ms Ryan in relation to the 524 proceeding, including any filing of a statement of defence. Ms Blakely argued that it would be premature to engage in the type of analysis required to assess the merits of the claim, let alone an assessment of costs. In response to the allegation concerning the belated consolidation of the proceedings, Ms Blakely submits that Ms Ryan never formally applied to consolidate the proceeding after raising the matter in late 2020 when the plaintiffs took the position that such a step would be a “procedural issue for a later date” and left open the possibility of the proceedings being heard together by the one judge. She argues the fact the 524 proceeding is now consolidated with the 522 proceedings reflects the combined effect of the changed circumstances arising out of her having engaged independent counsel, her sisters’ settlement of their claims, and the discontinuance of the 523 proceeding.
Decision
[18] I do not, at least at this stage, find Ms Ryan’s application for costs in respect of the 524 proceeding convincing. It may well be that the 524 proceeding has for all intents and purposes been discontinued but, with its consolidation with the 522 proceeding, its merits remain to be determined. Unlike the 523 proceeding, at no stage did Ms Blakely take any formal step to abandon or discontinue this proceeding.
Ms Ryan seeks costs for the claimed inefficiencies and delays caused by what is described as the “tortured procedural route” the matter has taken, but it has not been demonstrated how the failure to consolidate the proceedings at an earlier date has necessarily manifested itself in materially greater costs or time. It is apparent that all the proceedings have been case managed together, and that all the proceedings were delayed pending settlement negotiations that resulted in a series of adjournments which, from my review of the Court’s file, appear to have, albeit reluctantly at times, been by consent.
[19] The short point is that the FPA claim has never been formally retired, nor its merits determined. It now forms part of an amended statement of claim in respect of the 522 proceeding that will be prosecuted together with Ms Blakely’s other claims. I appreciate the merits of the claim in respect of the 524 proceeding are irrelevant to Ms Ryan’s claim for costs at this procedural point, but I am not satisfied, given the way the separate claims have effectively proceeded together and been “delayed together” pending possible settlement, there are particular costs that should be awarded at this time because the claim has finally been consolidated with the other proceedings. I am not convinced that consolidation, belated or not, equates to a discontinuance. I decline to award costs in respect of the 524 proceeding at this time.
Inefficiencies and delay
[20] As an alternative argument, Ms Ryan relies upon the Court’s general discretion to award costs to seek an award based on “the delays and inefficiencies to date”. This matter has been the subject of inordinate delay, but the primary reason for that has been the ultimately imperfect result of protracted efforts to secure settlement. Initial progress in that regard, in particular with efforts to convene a settlement conference, was to some degree frustrated by a collateral issue concerning the involvement of original counsel instructed by the plaintiffs. However, I do not consider either that feature or what may have been proven to be unnecessary work regarding the preparation of statements of position would warrant an award of costs at this time.
[21] It appears to me that the inherent risk that attaches to protracted settlement negotiations, namely the expenditure of time and resource that may not result in the
finalisation of the proceeding, which is particularly acute with proceedings involving multiple parties who may not all agree, has materialised in this case. The perception of time wasted and unnecessary delay cannot be viewed in hindsight, nor in light of the revised approach taken by relatively newly appointed counsel in the wake of Ms Blakely not being prepared to settle. It follows that the alternative claim for costs based on “efficiency/delay” is declined.
Ms Blakely’s application that costs be paid from the estate
[22] Ms Blakely seeks an indemnity from the estate for her own costs in respect of the discontinued 523 proceeding and argues that any award made in favour of Ms Ryan should also be met by the corpus of the estate and not by her personally. It is contended this is a case where the litigation has arisen as a result of the fault of the testator.10 Reference is then made to a number of factual allegations relating to the contested narrative of the parties’ dispute.
[23] No proper assessment can be made of these factual claims at this stage of the proceeding and they cannot validly, at this time, be a basis for a direction that Ms Blakely’s costs be paid by the estate. Limited costs have been awarded in respect of the 523 proceeding because of the procedural repetition that follows from Ms Blakely having discontinued a claim only for it to be recommenced. The estate should not have to subsidise the inefficiencies of Ms Blakely’s procedural choice to join with her sisters to discontinue a proceeding she has subsequently revived.
[24] I accept the submission made on behalf of Ms Ryan that costs are only being considered at this stage on the basis of the procedural decisions made by Ms Blakely to date. Whether potential awards of costs in respect of the substantive claims might be met in the future by the estate can only be informed by the Court’s assessment of the circumstances that have given rise to the claims and their merits. It is not presently in a position to accurately undertake that task. Ms Blakely’s applications that her own costs and those she is ordered to pay relating to proceeding 523 are declined.
10 Re Paterson (dec’d) [1924] NZLR 441 (SC) at 442–443 and Mumby v Mumby [2016] NZHC 2836.
Costs of costs memoranda
[25] Ms Blakely seeks scale costs for the filing of her costs memorandum. That application is declined. The court has power to award costs in relation to costs applications but will generally be reluctant to do so.11 In any event, neither party has clearly prevailed on the costs issue to warrant such an award.
Result
[26] There will be an order that Ms Blakely pay Ms Ryan costs in respect of the discontinued 523 proceeding in the sum of $2,599.84.
Solicitors:
Wynn Williams, Christchurch Anderson Lloyd, Dunedin
Lane Neave, Christchurch
11 Jeffreys v Morgenstern [2013] NZHC 1361 at [40].
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