Estate of Domney

[2020] NZHC 1968

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE

CIV-2017-485-611165

[2020] NZHC 1968

UNDER

the Administration Act 1969

IN THE MATTER OF

AND

the Estate of NOELINE ADA DOMNEY

IN THE MATTER OF

an application to remove Administrators

BETWEEN AND

AND

JUDITH KAY MCKELLOW

Applicant

STEVEN LYALL DOMNEY and ROSS PAUL DOMNEY

Respondents

LYALL WILLIAM DOMNEY

Interested Party

On the papers

Counsel:

M J Wenley for the Applicant A McEwan for the Respondents

D I Sheppard for the Interested Party

Judgment:

6 August 2020

JUDGMENT OF CULL J

[On Costs]

[1]    Following the judgment of 26 May 2020,1 Counsel for the applicant and the respondents have filed memoranda. Counsel for both parties are agreed that 2B schedule scale costs are applicable for all but three items sought by the respondents,

1      McKellow v Domney [2020] NZHC 1118.

Estate of Domney [2020] NZHC 1968 [6 August 2020]

which they have calculated on a 3C scale costs basis. I record that costs as between the applicant and her father, the interested party, have been settled by agreement.

[2]The three items sought to be calculated on a 3C schedule scale costs basis are:

(a)filing a notice of opposition and supporting affidavits;

(b)preparation of written submissions; and

(c)appearance at the hearing.

[3]    The difference between the schedule 2 costs as agreed by the applicant and the increased costs sought by the respondents is approximately twice the 2B scale costs calculation. 2B costs total $11,343 and the respondents’ calculation, with 3C scale costs for the above three items, total $21,032.

[4]    Counsel for the respondents relies upon a Calderbank offer made by them prior to the commencement of the proceedings, which they say entitles the respondents to seek indemnity costs. It appears the indemnity costs amount to $22,164 and on that basis, the respondents’ Counsel submits that the increased costs at 3C are reasonable in the circumstances, being less than indemnity costs.

[5]    In addition to  submissions  made by the  respondents’ Counsel  based  upon rr 14.2(1), 14.6(3), 14.6(4)(a) and 14.11(3) of the High Court Rules 2016, it is submitted that Counsel for the applicant unreasonably opposed the request for an adjournment of the settlement conference at the time of the COVID-19 lockdown.

[6]    In response, Counsel for the applicant submits that the proceeding was issued as an originating procedure, designed to dispose of matters economically and expeditiously. He points to Associate Judge Johnston’s email, recording that the Judicial Settlement Conference scheduled for 3 April 2020 had to be vacated because of the COVID-19 crisis but that the parties by consent agreed to the matter being determined by the Associate Judge as a referee under s 25 of the Senior Courts Act 2016. The matter came before this Court because of a concern that the Associate

Judge’s jurisdiction may not extend to the equitable jurisdiction under the Administration Act 1969.

[7]    As the authorities have recorded, scale costs should apply in the absence of some reasons to the contrary. Scale costs are intended to be a legislative indication of what is reasonable in the vast majority of cases.2 Further, an award of scale costs represents a reasonable contribution to the costs actually and reasonably incurred and does not depend on the actual costs incurred by the successful party. As the Court of Appeal reinforced, the losing party is not paying for service provided to it by the successful party or its lawyers.3

[8]    I consider that 2B costs in these circumstances is a reasonable contribution to the respondents’ costs. I acknowledge that there were attempts by the respondents to settle this matter, but at the end of the day this is a dispute arising among family members, who are co-executors of their late mother’s Estate. There needed to be an independent determination given the issues that were raised, the hostility among the co-executors, and the referral to a Judicial Settlement Conference and/or a determination by a referee under s 25 of the Senior Courts Act was not possible. These were not complex proceedings and do not justify increased costs in the circumstances.

Nor does this proceeding involve exceptional circumstances.4

[9]    I consider therefore that the 3C calculation for the three steps relied on by the respondents is not justified by the complexity of the matter.

[10]   It should not be overlooked, as Counsel for the applicant submits, that  Steven Domney benefits significantly from not having to bring his loans to account until the death of his father, when the residue is to be allocated in three equal shares.

2      Development Finance Corporation New Zealand Ltd v Bielby [1991] 1 NZLR 587 (HC) at 576.

3      New Zealand Venue and Event Management Ltd v Worldwide NZ LLC [2016] NZCA 282, (2016) 23 PRNZ 260 at [10].

4      Bradbury v Westpac Banking Corporation [2009] NZCA 234, [2009] 3 NZLR 400 at [28].

[11]   Accordingly, costs are awarded to the respondents on a 2B basis for all steps of the proceeding in the sum of $11,343, with reasonable disbursements as approved by the Registrar.

Cull J

Solicitors:

Willis Legal, Napier for the Applicant Langley Twigg, Napier for the Respondents