Ellin v The Public Trust

[2018] NZHC 667

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-1172

[2018] NZHC 667

BETWEEN

CHRISTINE ANNE ELLIN, JOHN

CAMPBELL GREENLEES, MICHAEL LENNOX GREENLEES
Plaintiffs

AND

THE PUBLIC TRUST

First Defendant

DERMOT RICHARD BLAKE

Second Defendant

Hearing:

12 April 2018

Appearances:

K N Mortimer for Plaintiffs

No appearance for First Defendant J Strauss for Second Defendant

Judgment:

12 April 2018

JUDGMENT OF PALMER J

This judgment is delivered by me on 12 April 2018 at 4.15 pm pursuant to r 11.5 of the High Court Rules.

.....................................................

Registrar / Deputy Registrar

Solicitors/Counsel:

Lewis Callanan, North Shore City ([email protected] ) John Strauss, Barrister, Auckland ([email protected])

ELLIN & ORS v THE PUBLIC TRUST [2018] NZHC 667 [12 April 2018]

Recall of probate

[1]    Mrs Doreen May Greenlees died on 28 December 2016. On 15 March 2017, probate was granted of her subsequently disputed will dated 28 September 2015. The plaintiff applies for recall of the grant of probate of the will of dated 15 March 2017 in proceeding CIV-2017-485-603097. The Public Trust, the first defendant as trustee, consents. Mr Dermot Blake, the second defendant, is a beneficiary under the disputed will and, though to a much lesser extent, under the previous will. He also does not now oppose the application.

[2]    I am satisfied recall of probate is justified on the ground Mrs Greenlees, then aged 89, deaf, not being able to see well enough to read, and suffering from dementia, lacked testamentary capacity at the time she made the will of 28 September 2015. I grant the application for recall.

Progress of the proceedings

[3]    Prior to the issue of proceedings, and on 5 April 2017, the plaintiffs invited the second defendant to accept Mrs Greenlees did not have testamentary capacity and advised costs would be an issue if proceedings had to be issued.

[4]    On 6 September 2017 Associate Judge Sargisson adjourned the proceeding to allow Dr Jane Casey to prepare a report on testamentary capacity. Her report was issued on 5 November 2017. On 9 November 2017, the plaintiffs sent a Calderbank offer to the second defendant, requesting consent to recall of probate in return for withdrawal of the application of costs against the second defendant. The second defendant rejected the offer.

[5]    At a case management conference on 16 November 2017, counsel for the Public Trust, the first defendant, consented  to  recall  of  probate  on  the  basis  of Dr Casey’s report.1 Mr Blake, the second defendant, requested further time to consider Dr Casey’s report and to engage his own expert. Associate Judge Sargisson recorded

1 Minute of Associate Judge Sargisson dated 16 November 2017 at [3].

that Mr Blake was on notice that the plaintiffs would seek solicitor-client costs if their claim to probate were successful.2

[6]    A second expert report, prepared by Dr Gary Cheung, was issued on 20 January 2018. On 19 February 2018 counsel for Mr Blake advised the Court he no longer opposed the recall of probate. On 28 February 2018, the plaintiff applied for scale costs against the second defendant on a 2B basis, and disbursements, amounting to

$15,878. This was amended to $16,130 of costs and disbursements in a memorandum filed 9 April 2018.

Costs

Submissions

[7]    At the call of this matter in the duty list, Ms Mortimer pressed the application for costs on the basis of the Calderbank offer to the second defendant and him being on notice about costs before proceedings were issued and during the proceedings. She opposed there being any further timetable, evidence or submissions regarding costs. She submitted it was obvious from the beginning that there were problems with capacity.

[8]    Mr Strauss, for Mr Blake, requested an involved timetable allowing the parties to exchange evidence and submissions on costs. In response to my question about what the submissions would be he stated Mr Blake originally opposed recall of probate on the basis two experienced employees of the Public Trust had attended to drafting the will and were satisfied Mrs Greenlees had capacity. He sought further expert opinion after receiving Dr Casey’s report and no longer opposed recall after receiving that further opinion. Mr Strauss submitted Mr Blake should not have to pay all the costs of the proceeding when the result only became clear towards the end. Mr Blake seeks an order that his costs be paid by the estate.

Decision

[9]    I do not consider further evidence and submissions on the issue of costs are required or desirable. I advised counsel I would decide on the costs application on the

2 At [4].

basis of the material on the court file, their memoranda filed for the call in the duty list and their oral submissions on costs.

[10]   It is a fundamental principle of New Zealand civil law that a losing party pays a winning party a contribution towards their legal costs.3 The question of who has won and who has lost is guided by the interests of justice and must be viewed in terms of “who in reality has been the successful party”.4 The costs of legal applications that benefit trusts can be paid out of trust property or otherwise as seems just to the Court in exercising its supervisory jurisdiction over the administration of trusts. The reasonableness of the position taken will be relevant to that.5 Section 71 of the Trustee Act 1956 empowers the Court to order the costs of any application under the Act be paid out of the property in respect of which it is made, “or to be borne and paid in such manner and by such persons as to the Court may seem just”.

[11]   The plaintiffs could have sought full solicitor-client costs but have not. I award costs to the plaintiff, who has succeeded, on a 2B basis as they request. It is reasonable that expert advice be taken to determine the question of testamentary capacity. The Public Trust consented to the application once Dr Casey’s report was available. Accordingly, I direct the half of the costs payable by the Public Trust as trustee can be paid out of the estate.

[12]   I direct the half of the costs payable by Mr Blake be paid out of the estate also, in relation to all those steps up until his response to the Calderbank offer. After that point, I consider it is fair for Mr Blake to bear personally the cost of the additional steps in the proceedings that were required only to satisfy him of the validity of the application. Those steps appear to be the updating memorandum of plaintiffs for the duty judge list and appearance at the duty judge list.

………………………….

Palmer J

3      Rule 14.2(a) of the High Court Rules and Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [8].

4      Waihi Mines Ltd v AUAG Resources Ltd (1999) 13 PRNZ 372 (CA) at [5]. See also Packing in Ltd (in liq) formerly known as Bond Cargo Ltd v Chilcott (2003) 16 PRNZ 869 (CA) at [6] (calling for “a realistic appraisal of the end result”).

5      Burnside v Burnside (No 2) [2017] NZHC 1678 at [9].