Bones v Wright

[2013] NZHC 2093

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV 2013-419-000479 [2013] NZHC 2093

IN THE MATTER             of the Family Protection Act 1955

AND IN THE MATTER     of an appeal against a decision of the

Family Court at Hamilton

BETWEEN  DEBORAH JANE BONES Appellant

ANDJANET WRIGHT Respondent

Hearing:                   (on the papers)

Appearances:           D M O'Neill for the Appellant

M H Leaf for the Respondent

Judgment:                16 August 2013

[RESERVED] JUDGMENT OF WYLIE J

This judgment was delivered by Justice Wylie on 16 August 2013 at 4.30 pm

Pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

BONES v WRIGHT [2013] NZHC 2093 [16 August 2013]

[1]      I refer to my reserved judgment issued on 1 August 2013.   I granted the appellant leave to appeal out of time, allowed the appeal, and set aside the judgment given in the Family Court.   I recorded that I had suggested to counsel that costs should lie where they fall, but that both had indicated that they would seek costs on behalf of their respective clients.

[2]      Mr O’Neill, on behalf of the appellant, seeks costs on a 2B basis, in a total

sum of $15,722.08.

[3]      Ms Leaf, on behalf of the respondent, suggests that each party should bear her own costs, or that costs should be met from the estate.  She submits that this is usual practice.  She notes that any award of costs would reduce the amount available to the respondent, and argues that the respondent can ill afford to have the amount she receives pursuant to her mother’s last will reduced.   She also submits that the respondent’s application to the Family Court had a reasonable prospect of success, and that it was not a meritless claim.  She notes that to date, the respondent has met her own legal costs, whereas the appellant, who was also a trustee of the estate, has only been required to meet part of the costs, because her counsel appeared for her in two capacities — both as a trustee, and as a beneficiary.   In the alternative, she submits that aspects of Mr O’Neill’s costs claim are inappropriate, in particular, his submission that his client is entitled to the costs of drafting and filing an application for leave to appeal.   She submits that that application was only required as a consequence of the appeal being filed out of time.

[4]      The costs incidental to any proceedings are in the discretion of the Court.[1]

Normally, it can be expected that a party who fails with respect to a proceeding should pay costs to the party who succeeds.[2]

[1] High Court Rules, r 14.1.

[2] Rule 14.2(a).

[5]      Despite these general principles, the practice developed in family protection proceedings is for the Court to order that the costs of all parties should be borne out of the residue of the estate of the deceased.[3]   This rule, however, is not invariable.[4]

On occasion, the Court will leave costs to lie where they fell, with the result that the parties on occasion have to meet their own costs out of their respective shares of the estate.[5]   This practice has developed because the courts have appreciated that a costs order against the residue of an estate can impact unfairly on residuary beneficiaries, particularly where the estate is not large.

[3] Keelan v  Peach  [2003] NZFLR 727  (CA) at  [7];  Patterson,  Law of  Family Protection  & Testamentary Promises (4th   ed,  LexisNexis, Wellington, 2013) at  17.41; and  see  generally, Barker v Barker HC Auckland CIV 2006-404-181, 7 December 2006.

[4] See, for example, Re Blakely (dec'd) [1957] NZLR 875 (HC); Re Miller (2001) 20 FRNZ 459 (HC).

[5] See, for example, Weir v Hotham HC Auckland CIV 2005-404-5300, 1 August 2006.

[6]      More recent cases suggest that costs in family protection cases should not be excluded from the general rule that costs should follow the event, but that this rule can be departed from in appropriate cases.[6]

[6] See, for example, Vincent v Lewis HC Auckland CIV 2002-404-2440, 26 April 2006.

[7]      Here, were the general rule to apply, Ms Bones, as the successful party, would be entitled to costs, pursuant to r 14.2(a).  Nevertheless, in the present case, in my judgment, costs should lie where they fall.  I have reached this conclusion for the following reasons:

(a)      Mrs Wright was successful in the Family Court.  While the appeal was allowed, it cannot be said that Mrs Wright’s  claim was devoid of merit, or that it was not responsibly brought or argued.

(b)      Mrs Wright and her husband are not in a strong financial position.

The legacy she receives under the will is not large and it should not be eroded by a costs award.

(c)      If I were to order that the costs be paid out of the residue of the estate, that would affect the position of Mrs Wright’s son, and Mrs Bones’

brother, Gary Wright, who has taken no steps in the proceedings.

(d)Mrs Wright and Mrs Bones are mother and daughter.  While they do not get on well, and their relationship is currently strained, making a costs order as between them might only make the position worse.

(e)      The proceedings were not made unnecessarily complex, or protracted, because of stalling tactics or procedural ploys adopted by Mrs Wright. Rather, she cooperated by agreeing to the application for an extension of time to bring the appeal being heard as part of the substantive hearing.

[8]      I have concluded that it is in the overall interests of justice in this case to make no costs order as between the parties, and not to order that the parties’ costs should be met out of the residuary of the estate.  Rather, it is appropriate to direct that both parties meet their own costs. Accordingly, I make no order for costs of one

party in favour of the other, and direct that costs should lie where they fall.

Wylie J