Dell v Pope

[2016] NZHC 2850

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-001968 [2016] NZHC 2850

IN THE MATTER

of the estate of PATRICIA AMELIA

MARY GATES

BETWEEN

BRUCE KENNETH DELL Plaintiff

AND

ANNETTE PATRICIA POPE Defendant

CIV-2015-404-002764

IN THE MATTER             of the estate of PATRICIA AMELIA MARY GATES

BETWEEN  ANNETTE PATRICIA POPE Plaintiff

ANDBRUCE KENNETH DELL Defendant

On the papers
Counsel:	G J Jenkin for Mr Dell S W M Piggin for Mrs Pope
Judgment:	29 November 2016

COSTS JUDGMENT OF GILBERT J

This judgment is delivered by me on 29 November 2016 at 1 pm pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

Solicitors:

Kevin McDonald & Associates, Auckland

SWM Piggin, Barrister, Auckland

DELL v POPE [2016] NZHC 2850 [29 November 2016]

Introduction

[1]      The parties to these proceedings have resolved all issues by agreement, other than the issue of costs.  The matter was case managed by Faire J but he is on leave and will be retiring shortly. The matter has accordingly been referred to me.

[2]      A short summary of the background is necessary to understand the competing contentions on costs.

[3]      Patricia Gates died at Auckland on 14 March 2015.   Mrs Gates had two children, Annette Pope and Kevin Gates.   Kevin died in April 2005.   In her will, Mrs Gates  made  a  specific  bequest  to  one  of  her  granddaughters,  Mrs  Pope’s daughter.   She left two-thirds of the residue of her estate to Mrs Pope and the remaining one-third to her other granddaughter, Kevin’s daughter.   Mrs Pope and Bruce Dell, Mrs Gates’ solicitor, were appointed executors under the will.   The principal asset of the estate comprises monies held in bank accounts totalling approximately $330,000.

[4]      Mrs Gates’ unencumbered home in Mt Roskill, which had a government valuation of $565,000 in 2015, was owned by the Patricia Gates  Family Trust. Mrs Gates and Mr Dell were the trustees.   Mrs Gates provided a memorandum of wishes to Mr Dell dated 3 June 2008 requesting that, upon her death, Mrs Pope be appointed in her place as co-trustee and the trust assets be sold and distributed in accordance with the terms of her will.

[5]      In normal circumstances, one might expect that an estate of this nature could be administered promptly and without incurring significant cost.  However, because of acrimony and mutual mistrust, Mrs Pope and Mr Dell  were unable to work together as executors or trustees.  Although Mrs Pope contributed to this unfortunate situation, I have come to the conclusion having read the affidavits and the correspondence that Mr Dell must also bear some responsibility for this.

[6]      In response to a short email from Mrs Pope on 7 May 2015 asking for a copy of the will and any important issues that required her attention as an  executor, Mr Dell responded:

…

With  respect,  I  think  this  is  going  to  become  fairly  tiresome  and unnecessarily costly for the Estate.

You must remember Anne that you are only one of the Beneficiaries.

…

[7]      Mrs Pope’s next email dated 15 May 2015 asked three short questions to

which  Mr Dell replied:

Bewildering minutiae but in a spirit of helpfulness: …

With respect Anne I think you are totally confused.

…

I'm more than happy for you to bring your husband or a support person to help you understand our responsibilities.

…

[8]       Matters did not improve.  On 25 May 2015, Mrs Pope sent a short email in which she proposed to complete an application for probate and bring it to Mr Dell’s office for him to sign.  She had made it clear that she wished to keep costs down. Mr Dell replied expressing his increasing frustration, threatening to have Mrs Pope removed as an executor and suggesting that she should obtain urgent legal advice:

With respect, you do not control the Estate and again, your actions are becoming irrational, unacceptable and quite honestly, you are getting further out of control.

As the first named Executor in the Estate, and in line with legal convention, I will   be   continuing   as   an   Executor   and   Solicitor   and   progressing administration of the Estate in line with Pat’s request and as her longstanding lawyer.

…

Accordingly, you have three working days to communicate with us through your lawyer, failing which, we will be seeking directions from the High Court.   Alternatively, taking advices from a senior Barrister as to our obligations and rights and we will possibly consider having you removed as an Executor because clearly, you seemingly have difficulties wearing both hats of an Executor and as a Beneficiary.

…

We sincerely ask that you consider your position and obtain urgent legal advice.

…

As mum was aware and as you are aware from our Client Engagement Form handed to you, the writer’s charge out rate is $395 per hour plus GST and we have been involved in Estate administration for in excess of 40 years and I

consider myself an expert in this area.  The file will be charged accordingly and no lawyer could ever give a quote for this file.

Please be assured Anne that we are not going to put up with any further difficulties from you or snide comments or suggestions or innuendo on your part.

…

[9]      Mr Dell wrote again the following day stating:

Further to our conversation, I confirm that I will give you until Tuesday morning to obtain advice through a Solicitor who can guide you through this process.

Sadly, there is a huge amount of distrust between the both of us and I am totally uncomfortable with your demeanour and agenda.

…

[10]     On 2 June 2015, barely six weeks after her mother had died, Mr Dell wrote to

Mrs Pope threatening to lay a complaint against her with the police:

Anne, you need read again all letters I’ve sent you.

I’ll  be  laying  a  police  complaint  today  if  all  Pat’s  documents  are  not

delivered here by 2pm, all as requested., based on your conversion of those.

Have you spoken to Stephen?

I’ll be applying also to the High Court to have you removed as executor unless you respond fully through Stephen, whom you appointed.

Yours Bruce Dell.

Do not come here expecting documents to be photocopied.

[11]     Mr  Dell  initiated  the  1968  proceeding  in August  2015  seeking  an  order appointing him as the sole executor of Mrs Gates’ will.   Mrs Pope responded by issuing the 2764 proceeding in December 2015 seeking an order appointing the Public Trust as sole executor to administer the estate and as sole trustee of the family trust.

Settlement

[12]     In May 2016, the parties reached a settlement of all issues other than costs: Mr Dell would renounce his executorship under the will and would resign as a trustee of the family trust; Mrs Pope would continue as an executor and as a trustee of the trust; and Public Trust would be appointed as a co-executor and co-trustee. On 12 May 2016, Faire J made orders by consent giving effect to this agreement.

[13]     The terms of the agreement are recorded in a joint memorandum signed by counsel and dated 6 May 2016.   Mrs Pope and Public Trust agree to indemnify Mr Dell out of the assets of the trust for any claims made against Mr Dell arising out of  his  trusteeship  of  the  trust,  other  than  claims  arising  out  of  negligence, misfeasance or breach of trust.  Similarly, they agreed to indemnify Mr Dell out of the assets of the estate in respect of any claims made by Mr Dell as solicitor to the estate. The memorandum also records that “the matter of costs is reserved”.

Costs application

[14]     Mr Dell has incurred costs calculated as follows:

Court proceedings

(a)       Mr Jenkin  $26,098

(b)      Bruce Dell Law  $18,400 (+ disbursements)

Estate administration

(c)       Bruce Dell Law  $ 5,633 (+ disbursements)

General affairs file

(d)      Bruce Dell Law  $ 1,544

Total  $51,675 (+ disbursements)

[15]     Mrs Pope is not wholly opposed to costs being paid to Mr Dell.  However, she contends that the costs he claims are excessive and out of all proportion to the matter in issue and having regard to the nature and value of the estate.   She also argues that Mr Dell adopted an adversarial approach and unreasonably continued with  the  proceedings  after  she  proposed  the  appointment  of  Public  Trust  in November 2015.     The  costs  incurred  by  Mr  Dell  after  that  date  amount  to approximately $15,000.    Mrs Pope proposes that costs in the proceedings should be

allowed to Mr Dell in the total sum of $28,000 plus disbursements.  This proposal includes Mr Jenkin’s fees and disbursements totalling $26,098.24 which she accepts are reasonable.

[16]     I consider that there is some merit in Mrs Pope’s submissions. While Mr Dell was justified in initiating the proceedings, it would have been prudent for him to have stepped aside in favour of Public Trust in view of the mutual mistrust that had developed between him and Mrs Pope, and taking into account that she was the principal beneficiary.  Further, the costs incurred in resolving who should administer the estate were disproportionate ($75,000 for both parties) when compared with the assets to be administered ($330,000 in cash).  I also consider that Mr Dell must bear some responsibility for the deterioration in the relationship with Mrs Pope, which added unnecessarily to the cost.  In these circumstances, I consider that it would be unfair to visit all of the costs on the beneficiaries and that a full indemnity for costs is not appropriate.

Result

[17]     Taking these matters into account, I fix costs (inclusive of GST) payable to Mr Dell in relation to the proceedings and including the estate administration costs as follows:

(a)       Mr Jenkin  $26,098.24

(b)      Bruce Dell Law  $12,000.00 (+ disbursements) Total                $38,098.24 (+ disbursements)

M A Gilbert J