Coleman v Chalklen - [2017] NZHC 1204

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2015-441-91 [2017] NZHC 1204

UNDER the Declaratory Judgments Act 1908

IN THE MATTER OF

the estate of Dorothy Farrington

BETWEEN

ADRIAN JAMES COLEMAN Applicant

AND

DAWN LOIS CHALKLEN & OTHERS Respondents

On thePapers:

Counsel:

D J OʼConnor and J C Heaphy for Applicant
M J Wenley and J F McDowell for Respondents

Judgment:

2 June 2017

JUDGMENT OF CLARK J (COSTS)

Introduction

[1] In my judgment of 22 December 2016 I made a declaration as to the construction of a clause in the will of the late Dorothy Farrington.1 The clause bequeathed the residuary estate. I held that the clause was properly construed as leaving the residue of the testator’s estate to the named beneficiary (Allan, the son of the testator’s sister) and the four children of Dawn Chalklen who is one of the respondents.2

[2] I expressed the preliminary view that the reasonable costs incurred by the applicant in bringing the application, and by both the applicant and Ms Chalklen in
being represented at the hearing, should be paid out of the share of the residue

1 Coleman v Chalklen [2016] NZHC 3178.
2 At [40].

COLEMAN v CHALKLEN & OTHERS [2017] NZHC 1204 [2 June 2017]

available to the four children of Ms Chalklen.3 I invited memoranda if the parties took a different view.

[3] Agreement has not been reached. In fact a total of seven memoranda have been filed.

[4] The applicant seeks actual costs in the sum of $74,712.50 (excluding GST

and disbursements) to be paid out of the estate of the four children of Ms Chalklen.

[5] The respondents dispute the reasonableness of the applicant’s costs. They

seek costs on a 2B basis in respect of all parties.

Issues

[6] There are two issues:

(a) Are all of the applicant’s costs recoverable?

(b)Should the residuary estate meet all recoverable costs or should some of the costs be paid only from the residue available to the four children of Ms Chalklen?

Submissions

Applicant

[7] Mr Coleman, the applicant for the declaration, is the sole surviving executor and trustee of the will. The sum of $74,712.50 which he seeks is broken down as follows:

(a) Mr O’Connor’s fees as counsel of $61,312.50 based on an hourly rate of $375; and

(b) Mr Heaphy’s fees as instructing solicitor of $13,400 based on an

hourly rate of $300.

[8] Mr O’Connor attached to his memorandum of submissions daily timesheets and invoice narrations for the periods 30 September 2015 to 25 May 2016, covered by the costs claim. There was no similar supporting documentation relating to Mr Heaphy’s costs as he does not have a formal time recording system.4

Respondents

[9] Mr Wenley, counsel for the respondents, submitted that the costs sought by the applicant were unreasonable: the conduct of the case by the applicant resulted in unnecessary and unreasonable costs in that there was unnecessary cross-examination of Ms Chalklen; it was unnecessary that the applicant be represented by two…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Coleman v Chalklen

Details

AGLC: Coleman v Chalklen [2017] NZHC 1204
Case: [2017] NZHC 1204
Decision Date: 2 June 2017

CaseChat Overview and Summary

Coleman v Chalklen was a dispute concerning the costs of a declaratory action brought by Adrian James Coleman, the executor of Dorothy Farrington's estate. The dispute involved the interpretation of a clause in Farrington's will that bequeathed the residuary estate to Allan, the son of the testator's sister, and the children of Dawn Chalklen. The High Court was tasked with determining whether the costs incurred by Coleman were reasonable and should be paid from the estate, and if so, whether they should be paid from the whole residuary estate or just the portion intended for Chalklen's children.

The key legal issues were whether all of Coleman's costs were recoverable, and if the entire residuary estate should cover the recoverable costs, or only the portion available to Chalklen's children. The Court needed to assess the reasonableness of the costs claimed by Coleman and decide on the appropriate fund from which these costs should be paid.

The Court found that although Coleman, as the executor and trustee, was a necessary party to the proceeding affecting the fund, not all of his costs were reasonable. The Court determined that Coleman's costs were excessive relative to the size of the estate and the work required. It reduced the costs by approximately 30% to reflect a more reasonable relationship between the costs and the estate's value. The Court also found that only specific costs related to the litigation should be awarded, and not those related to general estate administration. Consequently, the Court awarded Coleman $42,919.50 for his counsel's fees, $2,100 for his solicitor's attendance at the hearing, and the disbursements. The costs were to be paid from the entire residuary estate, while the respondents' costs were to be paid from the residue available to Chalklen's children.

Orders