Chen v Wu

[2021] NZHC 308

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-485-614075

[2021] NZHC 308

IN THE MATTER OF

the estate of Qinping Ling

BETWEEN

YAMU CHEN

Applicant

AND

SHENG YONG WU

Caveator

Hearing:	On the papers
Judgment:	26 February 2021

JUDGMENT OF WYLIE J

[Costs]

This judgment was delivered by Justice Wylie On 26 February 2021 at 4.00pm

Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Date:…………………………

Solicitors/counsel:

Meredith Connell, Auckland Loo & Co, Auckland

CHEN v WU [2021] NZHC 308 [26 February 2021]

[1]    I refer to my judgment of 14 December 2020.1 I held that the applicant, Yamu Chen (“Yamu”), was entitled to obtain the grant of letters of administration of Qinping Ling’s (“Qinping’s”) estate, in priority to Sheng Wong Wu (“Jimmy”). I set aside a caveat lodged by Jimmy and made an order granting letters of administration of Qinping’s estate to Yamu.

[2]    I also recorded that Yamu, as the successful party, was entitled to her costs and reasonable disbursements, and directed that memoranda be filed. I have now received those memoranda. Yamu’s counsel has sought leave to file supplementary submissions after receiving Jimmy’s reply. Supplementary submissions are unnecessary and leave is declined.

Submissions

[3]    Yamu seeks an award of $109,041.86, being costs calculated on a mixed 2B/2C basis, together with a 50 per cent uplift and disbursements. She argues that increased costs are justified, submitting that Jimmy failed to comply with relevant High Court Rules, pursued or took unnecessary steps, advanced arguments that lacked merit, and failed without reasonable justification to admit facts. It is also submitted that Jimmy failed, without reasonable justification, to accept an offer of settlement.

[4]    Jimmy argues that this was estate litigation and that the ordinary approach to costs in civil litigation is displaced. He says that Qinping died intestate, and that both the Ling family and the Wu family had connections to her through adoption or blood. He said that his position was consistent from beginning to end – namely that Qinping was his sister and that there had been no adoption. He says that it was not unreasonable for him to take the position he did and that he had sufficient cause to oppose Yamu’s application to take out letters of administration.

1      Chen v Wu [2020] NZHC 3302.

Analysis

[5]    All matters as to costs are at the discretion of the Court.2 There are specific principles which apply in cases of contested wills3 but there are no special principles which apply to costs in probate proceedings.4 The Court is entitled to have regard to all matters connected with or leading up to the litigation. Increased costs can be awarded.

[6]    Costs should follow the event. Yamu was the successful party and she is entitled to an award of costs. As I have noted, she seeks costs on a 2B basis together with a 50 per cent uplift.

[7]    Where increased costs are sought, a four-step approach is normally followed. First, it is necessary to categorise the proceeding under r 14.3. It is then necessary to work out a reasonable time for each step in the proceeding under r 14.5. At step three (perhaps as part of step two) a party can, under r 14.6(3)(a), apply for extra time for a particular step. Finally, the applicant for costs should step back and look at the costs award it could be entitled to. The applicant can argue for additional costs under r 14.6(3)(b). However, any increase above 50 per cent on the costs produced by steps one and two is unlikely given that the daily recovery rate is intended to be two thirds of the daily rate considered reasonable for the proceeding.5 It is permissible to simply seek a global uplift as opposed to seeking extra time for each step. In effect, it is permissible to skip step three.6

[8]I turn to consider each of these steps.

[9]    It is common ground that the proceedings are appropriately categorised under r 14.3 as category 2 proceedings – they were of average complexity, requiring counsel of skill and experience considered average in the High Court.

2      High Court Rules 2016, r 14.1(1).

3      Re Paterson (deceased) [1924] NZLR 441 (SC).

4      Mueller v Hendren (2009) 19 PRNZ 432 at [15].

5      Holdfast NZ Ltd v Selleys Pty Ltd (2005) 17 PRNZ 2897 at [43]-[46].

6      NR v MR [2014] NZCA 623, (2014) 22 PRNZ 636 at [52]; Broadspectrum (New Zealand) Ltd v Nathan [2017] NZCA 434 at [57].

[10]   There are three time bands provided for by r 14.5(2) to assist in determining the reasonable time for each step taken in a proceeding. Band A is not relevant in this case. Band B applies if a normal amount of time is considered reasonable, and band C if comparatively a large amount of time for a particular step is considered reasonable. A blanket assessment for banding is not desirable nor even possible under the High Court Rules and different bands can apply for each step.7

[11]   Here, Yamu seeks costs on a 2B basis for most of the steps taken in the proceeding. The only exceptions are the steps taken in preparing the affidavits and the common bundle. She seeks costs on a band C basis for these steps. She notes that a large number of affidavits was filed by Jimmy and other members of the Wu family and that she had to respond to the evidence adduced. This took considerable time and money.

[12]   There were 30 affidavits in total – 10 filed by Jimmy and 20 by Yamu (13 substantive and 7 translations). The common bundle was also extensive. I accept that the preparation of the affidavits and the preparation of the common bundle would have been time consuming exercises and that band C is appropriate for these steps.

[13]   Yamu also seeks certification for second counsel. She points to the fact that novel and important questions of law were involved in the proceeding. I am not persuaded that second counsel was necessary. The affidavits were largely factual, with the exception of one affidavit from an expert in Chinese law. The expert would however have prepared her own affidavit. Accordingly, I do not allow for second counsel. In my view, there was no obvious necessity for such counsel.

[14]   Costs calculated on a mixed 2B/2C basis, and excluding second counsel, come to $60,546.

[15]There was no claim under step three seeking extra time for any particular step.

[16]Yamu seeks a global uplift under step four, pursuant to r 14.6(3).

7      Commissioner of Inland Revenue v Chesterfields Preschool Ltd [2010] NZCA 400, (2010) 24 NZTC 24500 at 161.

[17]   First, she says  that  Jimmy  failed  to  comply  with  the  High  Court  Rules (r 14.6(3)(b)(i)). She refers to r 9.76(1)(d), which requires that affidavits be confined to matters that would be admissible if given in evidence at trial by the deponent. Yamu submits that significant parts of the affidavit evidence filed by Jimmy were inadmissible. I agree. As I noted in my substantive judgment, there was a lot of inadmissible hearsay given by members of the Wu family. One of Jimmy’s witnesses who had no relevant expertise was very ready to give opinion evidence on a range of matters, some of which he simply cannot have been in the position to comment on. I accept that, in part, the affidavits filed by Jimmy failed to comply with relevant High Court Rules.

[18]   I also consider that Jimmy advanced arguments that lacked merit, and that he failed without reasonable justification to admit relevant facts (r 14.6(3)(ii) and (iii)). Jimmy lodged a caveat, denying that Qinping was either raised or adopted by Yamu and her late husband. He asserted that Yamu was not Qinping’s mother either by blood or adoption. It was common ground that Yamu was not Qinping’s birth mother, but there was no evidential basis for Jimmy’s assertion that Qinping was not raised as a member of the Ling family. Nor did Jimmy adduce any evidence suggesting that Qinping had not been adopted in China. All available documentation provided by Yamu and the Ling family pointed to the fact that Qinping was a member of the Ling family and that she considered herself to be a member of that family. Expert evidence confirmed that Yamu had been adopted in China under Chinese law. Faced with this material, Jimmy nevertheless persisted in his argument that Qinping’s relationship with the Ling family was not that of an adopted daughter. By continuing to pursue this assertion, Jimmy contributed unnecessarily to the time and expense of the proceeding, and as a result put Yamu to unnecessary time and expense.

[19]   Further, Jimmy failed without reasonable justification to accept an offer of settlement (r 14.6(3)(b)(v)). On 29 October 2020, Yamu, through her counsel, wrote to Jimmy making an offer on a “without prejudice save as to costs” basis. The letter pointed to the available evidence and outlined why Yamu was likely to succeed in the proceeding. Yamu offered to forgo seeking costs should Jimmy withdraw his opposition to her application for letters of administration. She made it clear that if the

offer was not accepted, the letter would be presented in support of an application for increased costs.

[20]   A copy of the letter has been made available to me. As noted, the letter was sent on 29 October 2020, after all evidence had been exchanged and Yamu’s opening submissions had been filed and served. It was unreasonable in the circumstances for Jimmy to reject Yamu’s offer and force the issue to a five day trial. He had no proper evidence to support his stance.

[21]   I also consider that other reasons exist which justify the making of an order for increased costs. First, I gained the distinct impression at trial that many of the Wu family witnesses called to give evidence had been primed to give answers thought to be favourable to Jimmy’s case. Secondly, Yamu, as Qinping’s adoptive mother, was prima facie entitled to letters of administration of Qinping’s estate and to succeed to Qinping’s property. Because of Jimmy’s intervention, a straightforward application for letters of administration turned into a two-year proceeding culminating in a five- day trial. While Jimmy (and some members of his family) asserted that their motivation was not financial, I have very real doubts as to whether that was in truth the case. That aside, the end result of Jimmy’s actions in lodging the caveat, and pursuing the arguments he did, is that the Ling family had to incur significant costs in maintaining the estate’s main asset. Since Qinping died, her adoptive brother Qinfu and his wife have paid all of the various expenses due in respect of the estate property from their joint account. They have looked after the property, attending to gardening, maintenance and the like. No contribution has been made by Jimmy or any member of the Wu family. Thirdly, the eminently sensible suggestion was made by the Ling family that Qinfu should be appointed as a temporary administrator of Qinping’s estate, so that the estate property could be rented out to generate some income to cover mortgage and maintenance costs. Jimmy refused to accept this interim solution. Rather, he demanded that a representative of each family should jointly manage the property pending determination of the proceedings. In my judgment, Jimmy was being obstructive and for no good reason. Provided proper accounting was undertaken (and there was no suggestion that it would not be), there was no reasonable basis on which to oppose the suggestion that Qinfu be appointed as temporary administrator pending trial.

[22]   In my view, increased costs are appropriate and the appropriate uplift is 50 per cent.

[23]   Disbursements are claimed in the sum of $11,052.86. I have been provided with invoices and Jimmy does not challenge any of the disbursements incurred.

[24]   For the sake of completeness, I record I am satisfied that Yamu’s actual costs were well in excess of the costs order I am asked to make.

[25]   Accordingly, I make an order for costs against Jimmy and in favour of Yamu in the sum of $90,819, together with disbursements of $11,052.86.

Wylie J