Estate of Peters-Eggers

[2024] NZHC 2502

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2024-485-603645

[2024] NZHC 2502

IN THE MATTER	of an Order calling upon Executor to show cause why probate should not be granted to the Other Executor alone date 24 May and the Consent memorandum dated 24 June 2024
IN THE ESTATE	of RAELYN EDNA PETERS-EGGERS

Hearing:

On the Papers

Counsel:

M L Harkness for Ms Shaw

C R Osborne for Interested Party K C Eggers

Judgment:

3 September 2024

JUDGMENT OF McQUEEN J

[Costs]

[1]                 This is an application for costs in respect of an interlocutory application for an order nisi. The applicant, Ms Shaw, seeks increased or indemnity costs, or 1B scale costs. The respondent (to the costs application), Mr Eggers, submits that costs should lie where they fall, and disputes that Ms Shaw’s third set of costs submissions should be considered by the Court. However, if the Court makes a costs order, Mr Eggers says 1A would be the appropriate scale, subject to disputing the recoverability of specific steps.

Background and procedural history

[2]The will-maker, Raelyn Edna Peters-Eggers, died on 28 August 2023.

ESTATE OF PETERS-EGGERS [2024] NZHC 2502 [3 September 2024]

[3]                 The executors named in the deceased’s will are Ms Shaw (the deceased’s sister), Mr Eggers (the deceased’s husband) and Mr Gilbot-Ducray (the solicitor who held the will).

[4]                 After a breakdown in relationship with Mr Eggers, Mr Gilbot-Ducray renounced his appointment as one of the executors of the will and accepted that the estate should be administered through the grant of probate.

[5]                 In February 2024, Ms Shaw filed an ex parte application for an order nisi calling on Mr Eggers to show cause why probate of the will should not be granted to Ms Shaw or some other person. This was supported by an affidavit from Ms Shaw which says Mr Eggers would not sign the documents required for grant of probate and raised concerns about dissipation of assets by Mr Eggers because of a difficult relationship between him and other beneficiaries. Ms Shaw is not a beneficiary of the estate.

[6]                 On 14 May 2024, the Deputy Registrar granted the application. The matter was listed for call in the Judge’s Chambers List on 10 June 2024.

[7]                 On 29 May 2024, counsel for Ms Shaw, Ms Harkness, filed a memorandum in the Court recording that it was understood that service had been effected on Mr Eggers and that Ms Shaw sought that probate be granted to her solely.

[8]                 Counsel for Mr Eggers, Mr Ballantyne, filed a memorandum dated 5 June 2024 recording Mr Eggers’ position, which was that he did not accept that he has refused to prove the will or renounce his right and title to probate and execution of the will. Mr Eggers said that he had made all reasonable efforts to contact Ms Shaw in relation to the grant of probate but she was overseas and was he unable to advance matters with her.

[9]                 When the matter was called in the Judge’s Chambers List on 10 June 2024, the parties informed the Court that they had agreed to appoint an independent solicitor to act as executor of the will. They subsequently confirmed in a joint memorandum to the Court their agreement to the appointment of a Mr Smith as sole administrator. This

memorandum also indicated that payment of costs to Ms Shaw was not agreed and proposed a timetable for the filing of affidavits and submissions, requesting that the Court then deal with costs on the papers.

[10]On 24 June 2024 Grau J issued a minute making the following directions:

(a)Accepting the renouncement of the remaining executors, Mr Eggers and Ms Shaw, from their appointment.

(b)Appointing Grant Smith of Canterbury Legal as the independent solicitor to act as the sole administrator of the estate.

(c)Granting Mr Smith leave to apply to the Court for further directions and orders.

(d)Timetabling for the filing of submissions as to costs as the parties proposed.

[11]             On 4 July 2024 counsel for Ms Shaw,  Ms  Harkness,  filed  submissions  (Ms Shaw’s first set of submissions) and a supporting affidavit from Ms Shaw as to costs. An order of costs in the amount of $10,229.63 was sought, representing the actual costs incurred by Ms Shaw. The submissions said that Ms Shaw sought either for herself or another person to be appointed as executor and by consent Mr Smith had been appointed. The submissions asserted that Ms Shaw had been successful as the estate has been advanced and Mr Eggers removed as executor. Reliance was placed on Mr Eggers’ conduct which was said to cause delay in the grant of probate and administration of the estate. Ms Shaw did not seek these costs as indemnity costs.

[12]             On 29 July 2024, Mr Ballantyne, counsel for Mr Eggers, filed submissions opposing costs (Mr Eggers’ first set of submissions). The costs sought were opposed for several reasons. First, because Mr Eggers was not a respondent but rather, as an executor, he was a party who should have been served with Ms Shaw’s application for an order nisi, and he consented to the appointment of an independent executor at the first opportunity. Second, because Ms Shaw was not successful in her application to

be appointed sole executor, as sought  in  May 2024. Third,  Mr Eggers  says  that Ms Shaw has caused delay in relation to the grant of probate and she misunderstands that various property became his under the rule of survivorship. Finally, because the costs claimed were significantly higher than the 2B scale and out of all proportion to the steps taken in the proceeding which were resolved before the first call of the matter in Court.

[13]             On 29 July 2024 Grau J issued a minute directing that, by virtue of r 14.2(1)(c) of the High Court Rules 2016 (the Rules):

3.… the costs table provided by Ms Shaw needed to calculate the recoverable scale rate of costs by reference to the daily recovery rate out in Schedule 2 of the High Court Rules, and the time allocations given to steps in the proceedings set out in Schedule 3. This table should set out the steps taken in the proceeding by reference to the step number and wording provided in Schedule 3, instead of by reference only to a date or invoice number.

4.I acknowledge that the invoices provided by Ms Shaw in her affidavit describe the legal services to which they relate, but the need for a costs table with detail of the type described above nevertheless remains. And although Mr Eggers has not taken specific issue with this component of the costs claim, sufficient particularisation of costs claimed is necessary for the Court to be satisfied there is no duplication involved, and that the costs claimed for each step are reasonable and do not exceed the appropriate daily recovery rate.

[14]             The Judge directed that an updated memorandum with a sufficiently detailed table be filed for Ms Shaw within  seven  working  days,  and  reserved  leave  for Mr Eggers to respond to the updated memorandum.

[15]             Ms Harkness did not initially see the email providing the minute. On 13 August 2024 she filed a further memorandum seeking leave for the late filing. The memorandum attached a schedule of costs totalling $7,991 (seemingly based on a category 1B scale) although the schedule also included reference to actual costs incurred of $10,229.63 (Ms Shaw’s second set of submissions). Mr Ballantyne emailed the Court consenting to the late filing provided that Mr Eggers would still be afforded three working days for any response. Mr Ballantyne also recorded that he considered there were some fundamental  issues  with  the  schedule  provided  in  Ms Shaw’s second set of submissions as far as the application of the costs regime was concerned, which might be reconsidered.

[16]             Also on 13 August 2024, the Registrar suggested by email an amended timetable to the parties, proposing that Ms Harkness have a week to file further submissions,  having  considered  the  Rules  relating  to  indemnity  costs,  with    Mr Ballantyne to then have three days to file a reply. The Registrar’s email said that if there was no agreement by the parties, the default position would remain, that is,   Mr Eggers would have three days to file submissions. That amended timetable was not expressly consented to by the parties because neither counsel replied to the Registrar’s email.

[17]             By 19 August 2024 Mr Ballantyne was no longer instructed by Mr Eggers and Mr Eggers personally filed submissions in response to the second set of submissions for Ms Shaw. It appears that the submissions were a draft that had been prepared by Mr Ballantyne that Mr Eggers then signed (Mr Eggers’ second set of submissions). This memorandum maintains Mr Egger’s position that costs should lie where they fall. It also records that Mr Eggers has personally paid the estate’s costs up to the time of Mr Smith’s appointment and he accepts responsibility for those costs. However, this memorandum was not served on Ms Shaw as Mr Eggers was not aware of the obligation to do so.

[18]             Ms Harkness then filed further submissions on 21 August 2024 (Ms Shaw’s third set of submissions). These submissions sought actual costs in the amount of

$10,229.63 on the basis that increased or indemnity costs are justified. A schedule of costs is attached, updating the 1B scale costs to the sum of $9940, as a claim for costs on the costs application is included. Various allegations are made about Mr Eggers’ conduct. It is noted that Ms Shaw is not a beneficiary of the estate, so she had nothing to gain from the estate being progressed, and she is out of pocket.

[19]             On 23 August 2024, Mr Eggers’ new counsel, Mr Osborne, filed a memorandum in response to Ms Shaw’s third set of submissions (Mr Eggers’ third set of submissions). Mr Osborne contended that Ms Shaw’s third set of submissions should not be read by the Court as they were not filed in accordance with the timetable and in any event opposed the award of increased or indemnity costs and said costs should lie where they fall or if the Court was so minded, costs on a category 1A basis

should be awarded. Mr Osborne submits that the unconventional approach taken to seeking costs has forced Mr Eggers to incur further costs in re-engaging counsel.

[20]             In summary, Ms Shaw set out costs on a 1B scale basis as against her actual costs in her second set of submissions and articulates the basis for seeking her actual costs (as indemnity or increased costs) in her third set of submissions. Mr Eggers says that the third set of submissions should not be considered by the Court but in any event, there is no justification for increased or indemnity costs, costs should lie where they fall, or if the Court is minded to award costs to Ms Shaw an award should be calculated on a 1A scale basis.

[21]The matter has now been placed before me, as Duty Judge, to determine.

Approach to determining costs

[22]             Costs generally follow the event.1 However, if the parties cannot agree on costs, the High Court has discretion to make costs orders.2

[23]             Scale costs are calculated by categorising the proceeding as either category 1– 3 under r 14.3 of the Rules; and allocating an appropriate band as either AC under     r 14.5 of the Rules, determining what is a reasonable time for steps taken, according to the steps in sch 3. Different steps within one proceeding can have different bands.

[24]             Rule 14.2 of the Rules sets out principles guiding the determination of costs. Increased and indemnity costs are governed by r 14.6 of the Rules.

[25]In Lepionka & Co Investments Ltd v Gibson Sheat, Cooke J observed:3

Given the schedular approach the Court should only be involved in the determination of costs in a limited number of cases. The regime is relatively straightforward and costs should be able to be settled by the parties in the majority of cases. Yet it has become increasingly apparent that the Court is

1      High Court Rules 2016, r 14.2(1)(a); and see also David Bullock and Tim Mullins The Law of Costs in New Zealand (LexisNexis, Wellington, 2022) at ch 2.

2      Rule 14.1.

3      Lepionka & Co Investments Ltd v Gibson Sheat [2023] NZHC 2745 at [7]; and see also Minister of Education v James Hardie New Zealand [2018] NZHC 2960 at [7] where Fitzgerald J made the same observations five years earlier.

being asked to grant uplifts, discounts or exceptions to costs awards almost routinely.

Should the third set of submissions be taken into account?

[26]             The Registrar’s email to the parties on 13 August 2024 expressly frames the suggested amended timetable as a suggestion. Further, the Registrar said “If the parties agree to this (or any other agreed preferred method for timetabling the costs issue) I can make orders by consent.”4 In my view it is clear from that statement that counsel needed to reply confirming the timetabling orders or presenting a different agreed position. The Registrar did not issue amended timetabling orders by consent as contemplated, because counsel did not reply to the proposed orders.

[27]             However, I consider that there was some confusion about the timetabling and in the interests of fairness, in principle, all submissions should be considered. Counsel for Mr Eggers has had the opportunity to respond to the third set of submissions filed by Ms Harkness.

[28]             I nonetheless record that resolution of costs has been regrettably drawn out in this matter. The usual expectation is that an applicant for costs would file one memorandum setting out the basis on which costs are sought, in accordance with the Rules, to which a respondent would respond.

[29]             In any event, as will become apparent, my view is that consideration of the details of the costs submissions is unnecessary.

Discussion

[30]             In Clarke v Clarke, two siblings named as executors in the will of their mother both sought an award of costs in their favour following their agreement to renounce their executorships in favour of an independent executor.5

[31]In her judgment, Edwards J observed:6

4      Emphasis added.

5      Clarke v Clarke [2022] NZHC 1212.

6      At [11]–[13] (emphasis added).

Both parties rely on the affidavits filed in the proceeding in support of their respective costs arguments. Those affidavits reveal a factual dispute as to who was obstructing or delaying the application for probate and whether issuing proceedings was reasonably necessary.

I am unable to resolve those disputed issues of fact on the affidavit evidence. The Court should be cautious about allowing a costs hearing to be turned into a mini-trial on substantive issues in a proceeding which has since been resolved by consent. …

The order nisi granted by Brewer J did not resolve the underlying issues in the proceeding. That order required Natalie Clarke to show cause why Paul Clarke should not be granted probate alone. The ultimate agreement reached resulted in both Natalie and Paul renouncing their executorships and an independent executor appointed instead. That result does not equate with Paul Clarke being the successor in the proceeding, as his counsel contends.

[32]             The Judge’s  comments  are  apposite  to  the  present  case.  Ms Shaw  and Mr Eggers both say that the other was obstructing or delaying the application for probate. I am not able to determine these disputed issues of fact on affidavit evidence and assertions of counsel. I share the reservations of Edwards J about allowing a costs hearing to be turned into a mini-trial on substantive issues in a proceeding which has now been resolved by consent.

[33]             Here, Mr Eggers was not a respondent to the application for an order nisi; he was served in his capacity as the other executor of the estate. In that sense he was not an unsuccessful party who should have to pay costs to a successful party. Also relevant is that (at least for a time) Ms Shaw sought to be appointed as sole executor in circumstances where she acknowledged disagreements with the other named executor, Mr Eggers. Ms Shaw and Mr Eggers appropriately agreed to appoint an independent executor at an early stage of the proceeding.

[34]             The award of costs is ultimately an exercise of the Court’s discretion. Taking all the circumstances into account, I do not consider that an award of costs to Ms Shaw against Mr Eggers is appropriate.

[35]             Nonetheless, I accept that the filing of the application for the order nisi brought matters to a head in relation to advancing the administration of the estate. Filing such an application is a proceeding of a straightforward nature, appropriately classified as category 1 under r 14.3 of the Rules. A comparatively small amount of time is

reasonable in relation such a step, such that band A under r 14.5 of the Rules is appropriate.

[36]             I therefore direct that Mr Smith, executor  of  the  estate,  consider  paying Ms Shaw the costs and disbursements relating to the filing of that application on a category 1A basis, being $1,590, plus a filing fee of $200 and the cost of sealing the order $50, as an expense of administration.

Result

[37]             I dismiss the applications for costs and direct that costs, including costs on the costs applications, should lie where they fall.

[38]             I direct the Registrar to provide a copy of this judgment to Mr Smith, the executor of the estate of Ms Peters-Eggers.

McQueen J

Solicitors:

Stevens Orchard Lawyers, Nelson McFadden McMeeken Phillips, Nelson