Carrick v Carrick
[2021] NZHC 2637
•5 October 2021
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2020-409-424
[2021] NZHC 2637
UNDER Section 21 of the Administration Act 1969 IN THE MATTER
of the Estate of Shayne Brett Carrick
BETWEEN
KELSI JAYNE CARRICK and KAYTI ROSE CARRICK
Plaintiffs
AND
JONELLE MAREE CARRICK
Defendant
Hearing: (Determined on the Papers) Counsel:
A J Summerlee and F A Trowbridge for Plaintiffs S H Marsden for Defendant
S J Jamieson for Perpetual Trust Limited (watching brief)
Judgment:
5 October 2021
JUDGMENT OF ASSOCIATE JUDGE LESTER
CARRICK v CARRICK [2021] NZHC 2637 [5 October 2021]
[1] This proceeding was commenced a little over a year ago. The plaintiffs sought to have the widow of the late Shayne Brett Carrick removed as executor and trustee of his Estate. Summary judgment was sought but the proceeding was settled prior to the first call of the application. Orders were made by consent on 12 November 2020 removing the defendant as executor and trustee of the Estate and appointing Perpetual Trust Limited (Perpetual Trust) in her place.1
[2] Costs remained a live issue at the time of settlement. The defendant had opposed the application having filed a comprehensive notice of opposition and affidavit. She said she agreed to the orders out of pragmatism and resisted an award of costs.
[3] By the 12 November 2020 judgment, Perpetual Trust was directed to file a report in respect of the defendant’s administration of the Estate, in particular in relation to the issues raised in the proceedings. The idea was that the report would provide some independent assessment of the matters in issue in the litigation and may well influence the issue of costs.
[4] A practical issue arose with the completion of Perpetual Trust’s report in that the solicitors who had acted for the defendant in her capacity as executor declined to release their files, claiming a lien for unpaid costs. Accordingly, there was delay in assembling the records from the defendant’s time as executor in order to allow Perpetual Trust to undertake the directed review.
[5] The starting point is that costs follow the event. The plaintiffs set out to remove the defendant as executor and achieved that, albeit through consent orders. Standing back and making a realistic assessment, the plaintiffs were the successful party.2
[6] I now consider the report filed by Perpetual Trust in relation to the matters the plaintiffs relied on to justify the defendant’s removal as executor. The first is the defendant delaying or failing to call in Estate assets. Perpetual Trust note that the defendant’s authority to administer the Estate started from the date of probate,
1 Carrick v Carrick [2020] NZHC 3005.
2 Waihi Mines Ltd v Auag Resources Ltd (1999) 13 PRNZ 372 (CA) at [5]-[6].
6 March 2018. Administration of the Estate and, in particular, the realisation of the property, was complicated by two of the late Mr Carrick’s ex-partners registering notices of claim against the property in the Estate. It appears that the relationship between the defendant and the solicitors acting for her on the Estate was not an easy one. There were delays in the defendant giving instructions and Perpetual Trust note one instance where the Estate’s solicitors contacted the defendant at least seven times before receiving a response.
[7] Some delays in mid-2020 can be attributed to the COVID-19 alert level 3 and level 4 lockdowns.
[8] In July 2020, the plaintiffs’ solicitors wrote to the executor’s solicitors asking her to consider stepping down. She declined to do so in a letter dated 17 August 2020 and, indeed, the defendant appears to have stopped engaging with her solicitors around that time.
[9] I do not repeat all the matters in Perpetual Trust’s report. Had the defendant’s preparedness to settle been motivated solely by pragmatism, the time to be pragmatic was when she was called upon to stand down as executor. That call was made over two years after the grant of probate.
[10] I emphasise this conclusion does not represent a finding that the proceeding would have succeeded against the defendant. However, I am satisfied the defendant’s claim that the executor settled only out of pragmatism does not warrant departing from the normal rule that costs follow the event. The time for pragmatism was before the issuing of proceedings.
[11] I am satisfied that costs should follow the event. The issue is how and in what sum the costs should be borne.
Scale costs or increased costs
[12] This is not a case for increased costs. The plaintiffs rely on pre-proceeding conduct as a ground for increased costs. I accept the submission of Ms Marsden, counsel for the defendant, that costs are generally based on how the parties acted
during the litigation and not before it – although the exact scope of that rule is subject to debate.
[13] The scale costs claimed by the plaintiffs are $36,687 which includes a claim for costs on the application for costs of $3,585.
[14] Ms Marsden objects to the costs claimed by the plaintiffs for the preparation of the summary judgment hearing when it seems those steps were taken before the hearing was actually set down.
[15] On 28 October 2020, the application for summary judgment was adjourned to 12 November 2020 with the application to extend time for the filing of evidence in opposition also to be called on that date.
[16] Accordingly, it appears that plaintiffs’ counsel fully prepared for the fixture before a fixture date was allocated or any directions for hearing made. However, this point is met by the plaintiffs, who note that the Court advised the parties on 6 November 2020 that they should be prepared to argue the substantive application at the first call on 12 November 2021 as there would be time to do so and requested submissions be filed prior.
[17] But for the direction that the parties prepare for a hearing on 12 November 2021, I would have accepted Ms Marsden’s submission to disallow the costs claim for those steps. However, given the direction to prepare, it cannot be said the plaintiffs’ steps in that regard were premature.
[18] Ms Marsden has scrutinised the costs schedule tabled by the plaintiffs to examine the claims by the plaintiffs for memoranda filed. She identified those memoranda that were of short length and adjusted the timing claimed. Indeed, a number of the memoranda were only two or three paragraphs long. I agree with Ms Marsden’s submission that a full 2B allowance for a two or three paragraph memorandum is not called for, particularly as the memoranda were relatively routine. The allowances for memoranda dated 27 October 2020, 2 March 2021, 20 April 2021,
11 May 2021, 10 June 2021 and 7 July 2021 as set out in Ms Marsden’s schedule, are to be adopted.
[19] Save for the adjustments, the amounts claimed in the plaintiffs’ 2B schedule are approved. They relate either to the commencement of the proceeding or to the preparation directed by the Court. As to the costs sought for the exercise of fixing costs, I approve the plaintiffs’ claim for costs. The plaintiffs have succeeded on the issue of costs and in particular on whether the costs should be payable out of the Estate.
Who should pay the costs – the defendant or the Estate?
[20] This was hostile litigation. The plaintiffs sought to remove the defendant as executor because of her alleged breaches of duty. While the defendant denies she was in breach, nonetheless the application was necessary to have her removed. An application for a removal of a trustee or executor is a classic case of hostile Trust litigation where the Estate or Trust should not bear the costs.3
[21] Accordingly, the costs award is against the defendant personally on a 2B basis in the sum sought in the plaintiff’s schedule, with the adjustments for memoranda as per [18] above, together with disbursements of $1,100.
Associate Judge Lester
Solicitors:
Parry Field, Christchurch (for Plaintiffs)
Mortlock McCormack Law, Christchurch (for Defendant)
Copy to counsel:
S H Marsden, Barrister, Christchurch
Copy to:
S J Jamieson, Tavendale and Partners, Christchurch (for Perpetual Trust Limited) S D Campbell, Wynn Williams, Christchurch (for Wynn Williams)
3 Alsop Wilkinson v Neary [1996] 1 WLR 1220 (Ch) at 1223-1224.
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