Estate of Cousins

[2021] NZHC 615

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2020-409-000364

[2021] NZHC 615

UNDER	Section 14 of the Wills Act 2007
IN THE MATTER	of an application by HELEN IRENE DAVIDSON for an order that a document be declared the valid Will of the deceased JANICE LEE COUSINS

Hearing:	On the papers
Appearances:	J C D Guest for Applicant R J Little for Respondent
Judgment:	25 March 2021

JUDGMENT OF DOOGUE J

[Costs]

This judgment was delivered by me on 25 March 2021 at 2.30 pm pursuant to Rule 11.5

of the High Court Rules

Registrar/Deputy Registrar Date:

Re estate COUSINS [Costs] [2021] NZHC 615 [25 March 2021]

Introduction

[1]                  This is an application for costs by both the applicant and the respondents following my judgment dated 18 February 2021.

[2]                  The applicant, Helen Irene Davidson (Ms Davidson), a lawyer practising in Dunedin, was successful in her application for a declaration pursuant to s 14 of the Wills Act 2007 (the Act) declaring a draft will to be the valid will of her deceased client, Janice Lee Cousins (Jan).

[3]The respondents, who are members of Jan’s family, had argued that:

(a)there was a complete absence of evidence establishing that the draft will prepared by Ms Davidson represented Jan’s actual testamentary intentions; and

(b)equally fundamentally, that she lacked testamentary capacity to make a will in any event.

[4]                  An additional factor in this case was the respondents’ raising serious questions concerning Ms Davidson’s legal craft and her propriety. They lacked complete confidence that the draft will accurately reflected Jan’s instructions.

[5]                  The respondents seek to displace the dual presumptions that costs follow the event and that the losing party should pay costs to the successful party.1 They seek to be awarded costs on a 2B basis from the estate for “properly opposing” the application and assisting the Court to determine whether the will should have been validated or not.

[6]                 Both counsel agreed that the three general rules identified in the Law of Costs2 and referred to in cases such as Wardill & Anor v Anderson & Anor3 and Harris v

1      High Court Rules (2016), rule 14.2(1)(a).

2 G E Dal Pont Law of Costs (3rd ed, Lexis Nexis, Australia, 2013).

3      Wardill & Anor v Anderson & Anor [2016] NZHC 306.

Taylor4 are applicable as authority for the long-standing principle that, unless there are exceptional reasons, costs should follow the result.

Applicant’s submissions

[7]The applicant seeks costs on a 2B basis in the sum of $13,145.

[8]                  This is less than the applicant’s actual costs incurred arising from instructing counsel. The applicant does not claim for her own specific attendances to this litigation as opposed to the administration of the estate.

[9]The applicant’s position is simply this:

(a)although putting the applicant to proof of a document expressing testamentary intentions, the unsigned will was on its face such a document and, at the latest, by the time all affidavits were filed the respondents should have ceased defending the matter; and

(b)the respondents alleged lack of testamentary capacity without any reasonable basis for doing so and even by the time of the court hearing they had no tenable evidence to support such an allegation.

[10]              Further, the applicant says that in these circumstances although there are grounds for an increased award, if not indemnity costs, the applicant takes a more nuanced approach in seeking only costs at scale, acknowledging the level of concern and reasonable enquiry by the respondents (but short of the litigation that they caused), coupled with the fact that the final impact will be on the residuary estate, being bequests to charities.

[11]              Finally, Mr Guest, for the applicant, also submitted that there is a moderate element of public interest in not encouraging aggressive and unsubstantiated challenges to applications under s 14.

4      Harris v Taylor [2016] NZHC 483.

Respondents’ submissions

[12]              The respondents’ counsel, Mr Little, submitted that the primary ground for opposition to the application related to the lack of cogent evidence required to show that the draft document could be validated as a will. In particular, whether the will reflected Jan’s final testamentary intentions. Thus he submitted that the cross-examination of Ms Davidson was necessary to clarify whether the draft will represented Jan’s final testamentary intentions.

[13]              Second, he submitted that the lack of testamentary capacity was always a secondary issue as outlined in the initial memorandum of counsel for the telephone conference.

[14]              Third, Mr Little submitted that Jan’s conduct, which meant that over a period of months the will was not executed, directly caused the litigation.

Discussion

[15]              Notwithstanding his attempt to categorise it otherwise in  his  submissions, Mr Little did cross-examine Ms Davidson on behalf of the respondents in a significant effort to impugn Ms Davidson on the basis of previous litigation and a historic disciplinary matter. He sought to impugn both her professionalism and her integrity.

[16]              The respondents submitted that the professional charging clause, which saw the work that she did as executor of the will, was Ms Davidson’s motivation for bringing the application to validate a will.

[17]              It was particularly unfortunate that the respondents should make an allegation that a lawyer would be motivated in making an application such as this solely on the basis of being the named executor and being given the authority to charge for administering the will.

[18]              Charging provisions are commonplace when lawyers are appointed as executors under a will. It would be extraordinary and unreasonable to suggest that a lawyer, or lawyers, were acting unprofessionally in each case where they were named

as executor and given the authority to charge for the purpose of administering wills. Had that been the sole ground on which the application was brought, I would have considered that to be a ground for an increased award of costs to the extent of full indemnity costs against the respondents.

[19]              Here I acknowledge that, given Ms Davidson’s history, it was not illegitimate for the respondents to have a level of concern and a need to make a reasonable level of enquiry about the draft document.

[20]              Another complicating factor is that Ms Davidson did not provide to her counsel, Mr Guest, all the relevant information contained within her file notes until the day of hearing when, under cross-examination, she revealed she had not disclosed all relevant documentation pertaining to the matter. I directed her to return to her office to retrieve them and bring them to court to make them available to Mr Guest, Mr Little and the Court.

[21]              Had the full gamut of this material been made available to the respondents during discovery or after the filing of the notice of opposition and supporting affidavits, but before the first case  management  conference,  the  process  around Ms Davidson taking Jan’s instructions would have been made clear to the respondents and they may not have proceeded with their defence. I disagree, therefore, with the applicant’s position that the proceedings were continued without proper enquiry into the facts and without reasonable grounds.

[22]              I find there is no basis for placing any blame on Jan. She was getting her affairs in order as part of shifting to Christchurch. There was no material delay on her part or the part of her lawyer and it was entirely a coincidence and unfortunate that she died unexpectedly.

[23]              I agree with the applicant’s submission that there is a moderate element of interest in not encouraging aggressive and unsubstantiated challenges to applications under s 14.

[24]              The respondents submitted that there is public interest in ensuring potentially isolated persons’ estates are not distributed without a full investigation into the facts of an alleged will without corroborating evidence. I do not disagree with that. However, there are certain aspects of the respondents’ case that are extremely unfortunate, such as the baseless suggestion that a professional lawyer would take advantage of someone to become an executor in order to receive fees from a charging clause within the will. Whilst in principle I agree with the respondents’ general proposition, in this instant case I do not consider it applies.

[25]              I do not need to deal with the allegation that Jan lacked testamentary capacity. This allegation did not in and of itself protract the proceedings. The first ground was advanced as the primary ground and it was legitimate for the respondents to pursue it to hearing, particularly where Ms Davidson does have some unfortunate history and did not disclose all relevant material until she was requested to do so by the Court.

Summary

[26]              Taking all the preceding unique factors into account, the respondents were, in the circumstances, legitimately entitled to all information around the creation of the draft will and arrangements for its execution.

[27]              The full panoply of file notes was not provided by Ms Davidson to her counsel or the respondents until during the hearing. That was, according to her viva voce evidence, because she did not think that they were relevant.

[28]              Had they been provided to Mr Guest and the respondents at an earlier stage that ground of the defence may not have been advanced at hearing.

[29]              That is, in my view, why exceptional reasons exist to depart from the general principle that costs should follow the event. In this case I consider both the applicant’s and respondents’ costs should be met from the residuary estate.

Result

[30]I make the following award of costs:

(a)Scale costs on a 2B basis amounting to $13,145 to the applicant; and

(b)Scale costs on a 2B basis of $11,233 to the respondents.

Doogue J

Solicitors:

Klinkert Law, Dunedin

Eagles Eagles & Redpath, Invercargill