Estate of Ching

[2023] NZHC 1454

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2022-485-617736

[2023] NZHC 1454

IN THE MATTER OF the Estate of HUNG CHING

Hearing:	On the papers
Counsel:	K-H Sun and I Sugimoto as Caveator/Objector K L Maclean for the Estate
Judgment:	12 June 2023

JUDGMENT OF HARLAND J

Introduction

[1]        This costs judgment follows on from my judgment of 2 May 2023 in which I determined that the Order Nisi, granted on 7 March 2023, was to be made absolute.1

[2]        The applicant now seeks an order for costs. The caveator requests that costs be reserved pending further proceedings (yet unfiled) being determined in the Family Court or, alternatively, for a lesser award of costs to be awarded than that which is sought.

The arguments

[3]        The applicant seeks a costs award in the sum of $4,150.50. This follows a calculation undertaken on the basis that the appropriate scale costs are 2B. The costs have been calculated as follows:

1      Re Estate of Hung Ching [2023] NZHC 1013.

RE ESTATE OF HUNG CHING [2023] NZHC 1454 [12 June 2023]

Schedule 3, Scale 2B, Daily Rate = $2,390.00

Item 24 Preparation of written submissions (2.4)              $5,736.00 Item 26 Appearance at hearing (0.25)   $597.50

Total               $6,360.50

[4]        The actual costs incurred by the applicant were however $4,150.40 and so the applicant seeks indemnity costs for the amount billed. Counsel for the applicant submitted this is appropriate because:

(a)   The Caveator’s position was clearly untenable particularly given there was no jurisdiction for the Caveator to bring proceedings under the Family Protection Act 1980.

(b)   There is little prospect of success for the Caveator in any application under the Property (Relationships) Act 1976, and in any event a Caveat was not required for that application to be made.

(c)   No steps to date have been taken by either the Caveator or the Deceased’s children to issue any formal application in the Family Court; and

(d)   The Applicant wrote to the representatives for the Caveator on 14 February 2023 setting out the position and inviting the Caveator to withdraw the Caveat. The Caveator refused unless a settlement was offered (emails attached).

[5]        It was also submitted that the caveator’s motive was to use the court process for the purposes of leveraging a financial settlement from the estate which, if correct, would be an improper use of the court process. There is no evidence to support this submission and I disregard it.

[6]Counsel for the caveator submitted that:

(a)   costs should lie where they fall or be reserved until the proceedings which are intended to be filed under the Family Protection Act 1955 and the Property (Relationships) Act 1976 are determined;

(b)     the caveator commenced the proceedings in good faith based on an earlier medical report that stated the deceased had dementia prior to 13 December 2021 (the same year the will was signed);

(c)   the earlier will, which had been requested (the 2017 will) was not provided by the applicants, despite request, until after the case management conference; and

(d)     if costs are awarded, the applicant can only claim $1,673.00 from the caveator on a 2B basis for attendance at a case management conference.

Discussion

[7]        Under r 14.1 of the High Court Rules 2016 (HCR), costs are at the discretion of the court. The applicable principles, set out in r 14.2, include the following:

14.2 Principles applying to determination of costs

(1)The following general principles apply to the determination of costs:

(a)      the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds:

(b)      an award of costs should reflect the complexity and significance of the proceeding:

…

(f)  an award of costs should not exceed the costs incurred by the  party claiming costs:

…

[8]        Increased costs and indemnity costs are able to be awarded in accordance with r 14.6.

[9]        This case was determined at the first case management conference largely because counsel had filed submissions fully covering all the appropriate points and little would have been added at a defended fixture, which would have resulted in further cost to both parties. Given that both counsel were able to make full submissions at the conference, I determined it was appropriate to deal with the matter then. This has a potential impact on the costs that can be awarded.

[10]      The applicant contends that scale costs can be awarded based on the defended fixture allocation in sch 3 of the HCR, whereas counsel for the caveator contends they should be dealt with in accordance with the case management allocation in sch 3.

[11]      I am persuaded that scale costs should be assessed initially on a 2B basis and that the case management time allocation is more appropriate than the hearing allocation. This means that the caveator’s assessment, in terms of items 11 and 13 of the schedule, should be used. Accordingly, the caveator’s assessment of costs, a total of $1,673.00, is the most appropriate.

[12]      The next question is whether I should increase those costs or award indemnity costs.

[13]      In Bradbury v Westpac Banking Corporation,2 the Court held that there is a discretion to award indemnity costs in a number of circumstances including but not limited to:3

(a)   particular misconduct that causes loss of time to the court and to other parties;

(b)   commencing or continuing proceedings for some ulterior motive;

(c)   making allegations which ought never to have been made or unduly prolonging a case by groundless contentions, summarised in French J’s “hopeless case” test.

[14]      In addition to these circumstances, the applicant submits the matters referred to in para [4] above are also relevant to the Court’s consideration of this issue.

[15]      While I agree with counsel for the applicant that the submissions about a potential claim under the Family Protection Act by the caveator were misconceived and steps had not been taken to progress her claim under the Property (Relationships) Act, I am not satisfied that the matters justify an award of costs on an indemnity basis. As well, there is a potential jurisdictional issue, which I referred to in my May 2023

2      Bradbury v Westpac Banking Corporation [2009] NZCA 234, [2009] 3 NZLR 400

3      Memorandum on behalf of Applicant dated 3 May 2023, at para 9.

judgment.4     This is a matter that would need best be considered if and when proceedings are filed in the Family Court.

[16]      The next question is whether, even though indemnity costs might not be appropriate, increased costs are. This requires an assessment of the matters referred to in r 14.6(3) of the HCR. I am not satisfied that any of the matters in r 14.6(3)(a)-(c) apply, but I do consider that the fact that costs will be paid out of the estate is a matter I can take into account under (d).

[17]      Because of the matters I have referred to, I consider an award of increased costs is justified. Bearing in mind that the scale costs are based on the principle that two- thirds of the costs considered reasonable for the proceeding ought to be recovered and bearing in mind that the actual costs the estate has incurred amount to $4,150.40, two- thirds of this amount would be $2,766.93.

[18]Using this as a reference point, in my view, an award of costs amounting to

$2,000 is justified.

Result

[19]I order the respondent to pay costs of $2,000 to the applicant.

Harland J

Solicitors:

D’Arcy Thomson Law Ltd, Christchurch.

4      Re Estate of Hung Ching, above n 1, at [20].