Ferguson v Holland - [2023] NZHC 1509

IN THE HIGH COURT OF NEW ZEALAND MASTERTON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKAORIORI ROHE

CIV-2022-435-10

[2023] NZHC 1509

UNDER section 21 of the Administration Act 1969 and s 112 of the Trusts Act 2019

IN THE MATTER

of an application for removal of an administrator of the estate of James Edwin Veale

BETWEEN

ANGELA WENDY FERGUSON and GARRY JAMES VEALE

Plaintiffs

AND

MARGARET HANNAH HOLLAND

Defendant

Hearing: On the papers

Appearances:

D Kerr for Plaintiffs

E Cox and R Georgiou for Defendant

Judgment:

16 June 2023

JUDGMENT OF ASSOCIATE JUDGE SKELTON

[Costs]

[1] This proceeding relates to the estate of the late James Edwin Veale. The defendant, a sister of the deceased, was the executor of the estate. The plaintiffs are two of the deceased’s three children and beneficiaries of his estate.

[2] The plaintiffs sought the removal and replacement of the defendant as executor under s 21 of the Administration Act 1969 and s 112 of the Trusts Act 2019.

FERGUSON v HOLLAND [2023] NZHC 1509 [16 June 2023]

[3] On 6 March 2023, Associate Judge Johnston made orders by consent which removed and replaced the defendant as executor of the deceased estate. Those orders provided that the new executor would have sole management and administration of the estate and may review the prior conduct of the administration of the estate.1 Those orders determined the substantive issues in the proceeding.

[4] Costs were reserved and the parties were directed to file submissions. Both parties have filed submissions seeking costs.

Legal principles

[5] Costs are ultimately a matter of the court’s discretion, the overall objective being to achieve an outcome that best meets the interest of justice.2 However, that discretion is qualified by the applicable costs rules, contained in pt 14 of the High Court Rules 2016. The primary principle applying to the determination of costs is that costs follow the event – meaning that a party who is unsuccessful pays costs to a party who is successful.3

[6] The Court may order a party to pay increased costs where the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or a step in it.4 An example of this is failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under r 14.10 or some other offer to settle or dispose of the proceeding.5 Essentially, increased costs may be awarded where there is a failure by the paying party to act reasonably.6

[7] The Court may also award the actual costs reasonably incurred by a party (indemnity costs).7 Indemnity costs may be ordered if, for example, the party has acted

1 Ferguson v Holland HC Wellington CIV-2022-435-010, 6 March 2023 (Minute of Associate Judge Johnston.
2 High Court Rules 2016, r 14.1; Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305 at [7] and [16]; Glaister v Amalgamated Dairies Ltd [2004] 2 NZLR 606 (CA) at [21]–[24] and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Ferguson v Holland

Details

AGLC: Ferguson v Holland [2023] NZHC 1509
Case: [2023] NZHC 1509
Decision Date: 16 June 2023

CaseChat Overview and Summary

The case of Ferguson v Holland involved the estate of James Edwin Veale, where Angela Wendy Ferguson and Garry James Veale, the children of the deceased, sought the removal of Margaret Hannah Holland, the deceased’s sister and executor of the estate, on grounds of misconduct. The plaintiffs argued that Holland had mismanaged the estate and sought personal costs and compensation from her. The court was required to decide whether Holland should be held personally liable for the plaintiffs' costs and whether she should be indemnified for her own legal expenses.

Associate Judge Skelton found that Holland had behaved cooperatively and reasonably in handling the proceedings. Although the plaintiffs had made allegations of misconduct against Holland, these had not been determined. The court considered the conduct of both parties in relation to the proceedings, noting that Holland had been willing to consent to her removal as executor and had engaged in settlement negotiations. The court found that the appropriate course was to award scale costs to the plaintiffs on a category 2B basis, to be paid out of the estate. The court also ruled that Holland's costs in defending the proceedings should be met by the estate.

The final orders of the court were that the plaintiffs' costs in relation to the proceedings were to be met by the estate on a category 2B basis, totaling $14,101.00, together with disbursements of $1,400.00. The defendant’s actual and reasonable costs and disbursements in relation to defending the proceedings were to be met by the estate, with Holland required to prepare a costs schedule for approval by the Court within 14 days of the date of the judgment.

Orders