Gorringe v Pointon
[2022] NZHC 1621
•11 July 2022
IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE
CIV-2020-485-000349
[2022] NZHC 1621
BETWEEN ROMILEY CHANTAL GORRINGE and ASHLEY SHAYLIN GORRINGE
PlaintiffsAND
JUDITH ANNE POINTON and SUSAN
RUTH HENDERSON as executors of the Estate of Joan Blair Gorringe
Defendants
Hearing: On the papers Counsel:
J Hosking and C Drought for the Plaintiffs
K Catran for the First named Defendant (as beneficiary) S Scott for the Second named Defendant
Judgment:
11 July 2022
JUDGMENT OF WALKER J [COSTS]
This judgment was delivered by me on 11 July 2022 at 11 am Pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
GORRINGE v POINTON [2022] NZHC 1621 [11 July 2022]
Introduction
[1] Members of the Gorringe family have been engaged in a contest over the Will of Joan Gorringe (Joan). Joan died on 24 October 2019. She was 101 years old. A full description of the background to this proceeding is contained in my judgment on the substantive dispute.1 This judgment deals with the various costs claims following my judgment.
[2] The plaintiffs are two of Joan’s adult grandchildren who live in the United States. Their father, Peter Gorringe, was the son of Joan and Erl Gorringe. Peter passed away unexpectedly on 10 November 2015 following a medical event.
[3] The defendants, Judith Pointon (Judith) and Susan Henderson, are the executors of Joan’s estate (the Estate). Judith is Joan and Erl’s daughter and the plaintiffs’ aunt. Ms Henderson is a principal of Fenton McFadden and was also Joan’s solicitor but is a defendant only in her capacity as co-executor of Joan’s Wills.
[4] The plaintiffs challenged the validity of Joan’s Wills made on 16 March 2016 (2016 Will) and 19 November 2015 (2015 Will) respectively. They alleged that Joan lacked testamentary capacity at the time of both Wills. They also alleged undue influence on the part of Judith and breach of fiduciary duty by the executors. They sought orders to recall probate of the 2016 Will, declarations that both Wills are invalid, and for the grant of probate in respect of an earlier Will made by Joan in June 2011. That Will had been more favourable to the plaintiffs.2
[5] On 3 March 2022, I dismissed the plaintiffs’ claims. I determined on the weight of the evidence that Joan had testamentary capacity.3 I also found that the plaintiffs had failed to establish that Joan’s 2016 Will was the product of undue influence or that
1 See Gorringe v Pointon [2022] NZHC 342.
2 The June 2011 will contained a gift over clause which meant that in the event of the death of Peter or Judith before Joan, their share of Joan’s estate would pass to their respective children, Joan’s grandchildren. This would have seen the plaintiffs receive a much greater share of the Estate than under the 2016 and 2015 Wills which did not contain a gift over clause but instead made specific provision of $50,000 for each of Joan’s grandchildren.
3 At [149].
there had been a breach of fiduciary duty by the executors.4 I accordingly upheld the 2016 Will.5
[6] I reserved all questions concerning costs including what costs, if any, ought to be borne by Joan’s Estate. I invited the parties to file memoranda if no agreement could be reached. They have filed memoranda. The parties’ positions are diametrically opposed:
(a)Judith seeks a costs award in her favour of $79,810.91 calculated by reference to 2B costs until the date of a settlement offer on 18 June 2021, and thereafter indemnity costs. Judith also seeks an uplift of 25 per cent on that sum.
(b)Ms Henderson seeks 2B costs totalling $66,203.00.
(c)The plaintiffs seek an order that Joan’s Estate meet Judith’s actual costs, 80 per cent of their own scale costs and full disbursements, totalling
$76,301.40. They oppose Ms Henderson’s application for costs and seek an order that Ms Henderson should meet two thirds of the Estate’s actual costs to restore the Estate.
[7]It falls to me to decide the appropriate award and the incidence of costs.
Judith’s submissions
[8] Mr Catran, on behalf of Judith, submits that costs should follow the event in the ordinary way. He points to a settlement offer made to the plaintiffs which, if accepted, would have seen the plaintiffs sharing 20 per cent of the residue of the Estate (after certain deductions)6 in lieu of the $50,000 bequests made to each of them under the 2016 Will. It is not immediately apparent what that amount would have been but it would have been more than the bequests under the 2016 Will. That offer was not accepted by the plaintiffs. It expired on 22 June 2021.
4 At [192] and [201].
5 At [202].
6 This would have been after deduction of the Estate costs (including costs incurred by the Estate in responding to the proceedings) and after deduction of the bequests to Judith’s three children.
[9] Judith thus seeks 2B costs of $47,171.00 for the period prior to 22 June 2021 and indemnity costs of $32,067.75 for the period after 22 June 2021. She also seeks wasted expenditure of $572.16 in respect of an audio-visual link arranged for a witness in Sydney after the plaintiffs signalled that all witnesses who provided affidavits for Judith needed to be available for cross-examination. That link proved unnecessary during the trial as the witness was ultimately not cross-examined.
[10] Mr Catran submits that an uplift of 25 per cent, in addition to scale and indemnity costs, is warranted based on the way that the plaintiffs’ claim was presented. He submits that the allegation of breach of fiduciary duty in relation to non-supply of the Will and obtaining of probate before a caveat could be lodged had no prospect of success and was unsustainable on the facts. He notes in this respect that executors have no obligation to provide copies of wills prior to probate; there is no fiduciary duty to potential claimants to give them an opportunity to lodge a caveat, or to withhold a probate application until they do, especially in the absence of any indication that the validity of a Will might be attacked; it was clear that the delay in providing a copy of the Will was not deliberate or malicious; there was no rush to obtain Probate; and at the end of the day, this claim was not vigorously pursued in closing.
[11] Mr Catran also refers to extensive and unnecessary interlocutory arguments including “an endless series of demands for further discovery” and the issue of interrogatories; that the allegation about Judith bullying her mother was not established on the evidence and the attacks on Joan’s competence had no basis. He says that egregious allegations were levelled against Judith and what should have been a “straightforward investigation” became a “witch hunt”.
[12] Finally, he also seeks a direction that costs awarded to Judith are to be taken from the bequests of $50,000 to each of the plaintiffs.
Ms Henderson’s submissions
[13] Mr Scott, on behalf of Ms Henderson, submits that costs should follow the event in the usual way. While he considers that there is an entitlement to an uplift on
2B costs to reflect the manner in which the litigation was conducted, Ms Henderson seeks only 2B costs.7
[14] Mr Scott disputes any ‘fault’ on the part of Ms Henderson in terms of applying for Probate and asserts that Ms Henderson obtained her co-executor’s consent and disclosed the Wills and the reasons for the Wills together with a significant amount of information prior to the issue of proceedings. He submits it is not obligatory to provide former Wills or the reasons for Wills prior to the issue of proceedings, or that any delay in doing so can properly be the subject of a costs award. He also submits that the defendants were obliged to discover significant amounts of financial records and correspondence that were irrelevant to the pleadings; much of the plaintiffs’ filed evidence was inappropriate (being hearsay, submission, opinion or otherwise objectionable); and the plaintiffs’ opening was inappropriate in a number of areas.
[15] Mr Scott suggests that the fact the plaintiffs’ instructing solicitors did not squarely put their concerns in the letter dated 21 November 2019 but rather kept their powder dry was regrettable and not something that the defendants should be held responsible.
The plaintiffs’ submissions
[16] Ms Hosking submits that the confluence of Joan’s statements and the substandard processes at Fenton McFadden would cause anyone in the plaintiffs’ position to be concerned at what had transpired. She contends that a lack of candour on the part of the executors entrenched matters and their approach should have implications for costs.8 Ms Hosking rebuts the suggestion that the interlocutories were extensive and argues that the proceedings in fact began to stagnate because of the defendants’ failure to comply with directions.
[17]Ms Hosking responds to Mr Catran’s criticisms as follows:
7 I assume this claim to costs seeks to reimburse the Estate which has apparently paid Ms Henderson’s costs.
8 Relying on [197] of the judgment.
(a)Judith was required to find only 10 receipts. The plaintiffs’ concern had been that money was spent on Judith without Joan’s knowledge and consent, not what might have been spent on Joan herself.
(b)Judith was not present when the 2015 Will instructions were taken but this is not material for the claim of undue influence.
(c)The cause of action relating to testamentary capacity had an evidential basis and undue influence and testamentary capacity claims are routinely made in tandem because the state of the testator’s health is part and parcel of an assessment of their vulnerability to undue influence.
(d)The plaintiffs did not suggest that Joan was “kept away” from Peter’s funeral. Their evidence on this aspect was for the purpose of showing Joan’s fragility and vulnerability at the time she changed her will.
(e)The point of issuing interrogatories concerning the person who sat with Joan during the funeral is that this person may have been an independent person who could have given evidence as to Joan’s state of mind at the time.
(f)Notice was given that certain witnesses were not required for cross-examination. It is not uncommon for witnesses to be released and it did not add to the cost of the trial.
(g)While great emphasis is placed on the financial and emotional cost of these proceedings to Judith and her family, the plaintiffs have also suffered.
(h)Judith’s conduct in respect of providing information about the joint account was obstructive.
(i)Judith even claimed privilege attached to communications between herself and Fenton McFadden in respect of advice they might have given in respect of the removal of the $5,000 from the account.
[18] Ms Hosking submits that various minutes and memoranda make it clear that there was significant non-compliance by Ms Henderson with court directions. She says that Ms Henderson’s approach to discovery was also a significant source of frustration and entrenched the distrust held by the plaintiffs and that Ms Henderson did not act as a neutral provider of information but took a partisan stance in the litigation as a whole.
[19] Ms Hosking suggests that this is a claim that could have been prevented if Fenton McFadden had taken basic steps to ensure and record that their client had testamentary capacity and was making a Will that was truly reflective of Joan’s wishes and free from undue influence. The plaintiffs instead found themselves in a position where they had concerning disclosures from their grandmother and no independent evidence of her reasons to contradict what she said. Had there been thorough file notes, capacity testing and some indication that Joan received proper legal advice, this whole situation might have been avoided. The plaintiffs should not be punished for taking steps to challenge the Wills in these circumstances.
[20] Ms Hosking relies on Public Trust v Dollimore to submit that the Estate should only be responsible for one third of the fees and disbursements rendered by Mr Scott.9
Judith and Ms Henderson’s reply submissions
Judith
[21]Mr Catran submitted that the two grounds set out in In re Paterson (Deceased)
which would justify the Estate meeting the plaintiffs’ costs are not made out.
[22] First, Joan was not at fault because there is no irrational habit attributed to her or her writings. The only “fault” may be that she is claimed to have told the plaintiffs that she was bullied into changing her will. But the effect of any such fault was spent
9 Public Trust v Dollimore [2019] NZHC 607, [2019] 2 NZLR 901.
and is not relevant to the bringing or conduct of the litigation. The litigation was brought only to undo the financial detriment to the plaintiffs brought about by the Will change.
[23] Secondly, Mr Catran contends that the second ground is not made out because Judith did not possess the requisite knowledge. I consider this submission misapprehends the principle in Paterson because it is the knowledge of the challenger to a Will which is relevant and not the knowledge of the person said to have unduly influenced the will-maker.
Ms Henderson on behalf of the Estate
[24] Mr Scott submits that the authorities cited by the plaintiffs where the unsuccessful party’s costs were paid out of the estate, involved a genuine contest as to capacity. By contrast, he suggests in the present case no evidence was advanced in respect of the breach of fiduciary duty claim and Dr Malone’s evidence fell short of putting capacity at issue.
[25] Mr Scott notes that there was a potential cost consequence between respondents if the plaintiffs succeeded on their third cause of action given that Ms Henderson was acting in a dual capacity as executor and her firm was responsible for advancing the probate application. He rejects the proposition that Ms Henderson’s position was partisan as:
(a)No evidence was led by the Estate beyond the deponents Ms Henderson and Ms Hipkiss as to their interactions with the deceased and practice in respect of probate applications.
(b)Mr Catran and Ms Drought (the plaintiffs’ solicitor) both received Joan’s medical records on 5 October 2020 and other disclosed documents contemporaneously.
(c)Cross-examination of Dr Malone was limited to whether the deceased had capacity at the relevant time as his report was unclear.
(d)Cross-examination of Romiley was limited to what documents existed to enable identification of the loan position.
(e)No costs are sought for inspection (on behalf of the Estate) because none was undertaken by the Estate.
(f)But for the “novel” breach of duty cause of action, counsel for the Estate could have simply been present to lead the evidence of Ms Henderson and Ms Hipkiss, answer any questions in respect of Estate assets, and abide the decision of the Court.
Discussion
[26] The extent of disagreement between the parties about costs is a further reflection of the irretrievable break-down in the familial relationship. They do not agree who is entitled to costs and what costs, if any, ought to be borne by the Estate.
[27] The question is whether the ordinary approach to costs, in which costs follow the event, should be adopted.
[28] I apprehend that Judith’s claim to costs relates to her opposition to the challenge as primary beneficiary and Ms Henderson’s claim to costs represents the position of the co-executors in the interests of the Estate.
The principles identified in Paterson
[29] Matters as to costs are at the discretion of the Court but the discretion must be exercised in a principled way in accordance with pt 14 of the High Court Rules.10 The usual starting point is that costs follow the event.11 This would see the plaintiffs paying costs to the defendants.
[30] But, as always, context is everything. In cases involving contested wills, a series of well-established principles was set out in Paterson, namely:12
10 Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523 at [16].
11 High Court Rules 2016, r 14.2(1)(a).
12 In re Paterson (Deceased) [1924] NZLR 441 (SC) at 442–443.
(i.)If the litigation originates in the fault of the testator—e.g., by the state in which he left his testamentary writings, or by his eccentric or irrational habits and mode of life—or of those interested in the residue, the costs may properly be paid out of the estate.
(ii.)If there be sufficient and reasonable ground, looking to the knowledge and means of knowledge of the opposing party, to question either the execution of the will or the capacity of the testator, or to put forward a charge of undue influence or fraud, the losing party may properly be relieved from the costs of his successful opponent.
(iii.)Unless the circumstances of the case are such as to bring it within one of the foregoing exceptions, the general rule that costs should follow the event ought to prevail …
[31] The first principle plainly does not apply because there was no eccentric or irrational habit on behalf of Joan which prompted the plaintiffs’ challenge. Her conversation with the plaintiffs where she disclosed having changed her Will, albeit soon after Peter’s death, falls well short of this threshold.
[32] The second principle involves a more finely balanced assessment in the circumstances of this case. Simply because the plaintiffs failed in their claim does not mean that there were no reasonable and sufficient grounds for bringing it.
The challenge to testamentary capacity
[33] With respect to capacity, I found that none of the contemporaneous communications about Joan individually or collectively supported the plaintiffs’ case as to incapacity.13 Likewise, while there is no doubt that Joan was physically frail, no persuasive evidence was adduced to show that her physical ailments signalled a loss of mental acuity.14 The evidence of Dr Malone as to capacity did not take the point significantly further.
[34] Even so, I accept that there was a reasonable basis for the plaintiffs to inquire into the circumstances surrounding Joan’s 2015 and 2016 Wills. There is a need for great care and sensitivity whenever a testator of advanced years makes a new Will. That is particularly so when the changes mark a significant departure from prior dispositions or where the context could objectively suggest that the will-maker was
13 Gorringe, above n 1, at [107].
14 At [109].
under particular strain or stress, as here. As I observed in my judgment, the processes by which both the 2015 and 2016 Wills were drafted and executed were plainly inadequate.15 The interactions with Joan were relatively brief and no capacity testing was undertaken at the relevant time. The file notes were scant and failed to adequately record the rationale for Joan’s instructions. No-one at Fenton McFadden took appropriate steps to ensure that the changes were the product of Joan’s independent decision-making. The approach ultimately taken fell well short of the “gold standard” and I am satisfied that those deficiencies contributed significantly to the unease of the plaintiffs.16
The challenge concerning undue influence
[35] As to undue influence, the genesis of the plaintiffs’ concern was an interaction they had with Joan some 12 days after Peter’s death and only a few days after his funeral in Hamilton. The essence of Romiley’s evidence on this interaction was that Joan told the plaintiffs she had been bullied by Judith into changing her Will.17 It was argued by Ms Hosking at trial that this interaction, when combined with a Will which was “not rational on its face”, was determinative of undue influence.18
[36] I accepted that such an interaction took place between Joan, Romiley and Ashley in the days following Peter’s funeral and that their account was generally truthful about what Joan said to them. That however did not mean that undue influence existed in fact. As indicated in my judgment, there was no corroborating evidence from friends or staff at Somervale of bullying by Judith.19 To the contrary, the descriptions by care staff and others of Judith’s relationship with her mother were entirely inconsistent with a claim of undue influence.20 There were also a number of possible explanations for Joan’s statement which would not entail undue influence on
15 At [97]–[98].
16 At [98].
17 At [160].
18 At [159].
19 The corresponding paragraph in the judgment is between paragraphs [165] and [166], but there is a typographical error in the paragraph numbering which has resulted in the paragraph incorrectly being labelled as “[15]”.
20 At [180].
behalf of Judith.21 The changes Joan ultimately made in her 2015 Will were perfectly understandable for the reasons I outlined in the judgment:22
… I consider that Joan felt the weight of her ties of affection to Judith, deep appreciation for all that Judith and her husband did for her for many years and concern about Judith and Christopher’s financial future.
[37] Again however, the fact that the plaintiffs’ claim did not succeed does not determine the issue at hand. This interaction with Joan called for an answer. I do not consider that the plaintiffs were unreasonable in commencing the claim to explore the issue also. A claim of undue influence does not require any mal-intent on the part of the person said to have exercised undue influence. Again, the inadequate processes adopted by the solicitors hardly assuaged any justifiable concerns. There were sufficient grounds to raise the prospect of undue influence at the outset, at least until all the evidence was gathered.
[38] I conclude therefore that the plaintiffs had objectively reasonable grounds for concern within the second category in Paterson. This warranted the commencement of proceedings. While not on all fours with the facts in cases such as McFadzean v Moleta23 or Nijsse v Squires,24 I conclude that the plaintiffs are entitled to an order for costs to be met from the Estate.
The appropriate award
[39] The next question becomes what costs award is appropriate in these circumstances. Some cases in this area permit reasonable actual costs to be paid from the Estate while others limit the recovery of costs to scale costs. I record that the plaintiffs seek only scale costs (and with a 20 per cent reduction).
[40] The relevant criterion is the overall justice in the particular case. The touchstone is reasonableness. In my view, the relevant factors are:
21 At [174]–[180].
22 At [180].
23 McFadzean v Moleta [2013] NZHC 2694.
24 See Nijsse v Squires HC Auckland CIV-2002-404-1618, 12 December 2003; and Nijsse v Squires
CA53/04, 15 December 2004.
(a)the offer made by the defendants on a “without prejudice save as to costs” basis on 18 June 2021;
(b)the state of the evidence pre-trial;
(c)the manner in which the plaintiffs conducted the trial, in particular the attack on Judith’s management of her mother’s affairs although not a pleaded allegation;
(d)the manner in which the defendants conducted the defence of the proceedings, in particular the lack of openness, the approach to the interrogatories issued and the omission by Ms Henderson’s firm to discover the Enduring Power of Attorney before trial which suggested on its face that another member of Ms Henderson’s firm attended on Joan on or around the time the 2015 Will was made. (There is no suggestion that this omission was deliberate rather than the product of a system error during conversion of a paper file to an electronic record some time before the litigation).
The settlement offer
[41] Under r 14.6(3)(b)(v), a court may order a party to pay increased costs if the party opposing costs has contributed unnecessarily to the time or expense of the proceeding by:
… failing, without reasonable justification, to accept an offer of settlement whether in the form of an offer under rule 14.10 or some other offer to settle or dispose of the proceeding.
[42]Rule 14.10(1) provides that:
A party to a proceeding may make a written offer to another party at any time that—
(a)is expressly stated to be without prejudice except as to costs; and
(b)relates to an issue in the proceeding.
[43] To be effective for costs purposes pursuant to r 14.10 of the High Court Rules, the offer needs to be:25
(a)clearly and unambiguously stated;
(b)capable of contractual acceptance; and
(c)more beneficial (or close in benefit) to the other party than the judgment actually obtained.
[44] The relevant question is whether the plaintiffs failed to accept that settlement offer without reasonable justification. Any assessment of the reasonableness of an offer requires the court to consider the position at the time the offer was made rather than by reference to any subsequent result.26 This assessment involves factors such as the size and timing of the offer, the reasonable expectations of the party refusing the offer and the parties’ ability to assess the merits of the case at the time of the offer.27
[45] The offer dated 18 June 2021 was clearly and unambiguously stated. There was certainty as to what the offer entailed and it was clearly capable of contractual acceptance. It was expressly stated in bold text to be without prejudice save as to costs. The offer was also more beneficial to the plaintiffs than the $50,000 each of them stand to receive under the 2016 Will although the extent of benefit is difficult to assess. The offer included a stipulation that each party was to bear their own costs.
[46] The Estate had a value of approximately $1.5 million when the assets were gathered in by the executors.28 After deduction of the Estate costs and specific gifts of $50,000 to each of Judith’s three children, the plaintiffs’ 20 per cent share in the residue would have well exceeded the $50,000 they each receive under the 2016 Will. It was likely sufficient to enable full recovery of expended legal costs incurred to date.
25 Body Corporate S73368 v Otway [2018] NZCA 612, (2018) 20 NZCPR 477 at [80].
26 New Zealand Sports Merchandising Ltd v DSL Logistics Ltd HC Auckland CIV-2009-404-5548, 19 August 2010 at [36]–[37].
27 Weaver v HML Nominees Ltd [2016] NZHC 473 at [30].
28 Gorringe, above n 1, at [8].
[47] The offer was made on 18 June 2021 and expired on 22 June 2021. This was approximately one month before trial. By this time, the plaintiffs’ evidence was complete. They were in possession of the expert evidence from both Dr Malone and the “non-expert” evidence from Dr Newburn.29 By this stage, it ought to have been clear to the plaintiffs that there was no evidential foundation for the allegation of incapacity. Some trial preparation would have been completed by this stage but acceptance of the offer would still have avoided the need for a four day hearing.30 One of the conditions of the offer was that it was not only expressed to be in full and final settlement of claims against the Estate, but also full and final settlement of any claims against Fenton McFadden. No claim had been made in this proceeding against that firm.
[48] In my assessment, the offer was demonstrably reasonable. By not accepting the offer, the plaintiffs were “on risk” of not only meeting their own costs but of an adverse cost award also.
The plaintiffs’ conduct at trial
[49] The cross-examination of Judith in respect of her control of and spending from Joan’s bank account occupied considerable time. This line of attack was directed at impeaching Judith as a witness and illustrating control of Joan’s finances to establish Joan’s vulnerability, the opportunity and inclination to influence and a sense of entitlement to Joan’s money.
[50] Under r 14.6(4)(a) a court may order a party to pay indemnity costs if they have “acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing, or defending a proceeding or a step in a proceeding”. The leading authority on indemnity costs is the decision of Bradbury v Westpac Banking Corp,31 in which the Court of Appeal referred to observations from Woodward J in the Federal Court of Australia that:32
29 Although Dr Newburn is a psychiatrist of many years’ experience, he gave evidence as a family friend about a social interaction with Joan relatively close in time to the relevant period.
30 Or a reassessment even in the absence of the settlement offer could have significantly reduced the issues at trial.
31 Bradbury v Westpac Banking Corp [2009] NZCA 234, [2009] 3 NZLR 400.
32 Australian Transport Insurance Pty Ltd v Graeme Phillips Road Transport Insurance Pty Ltd
(1986) 71 ALR 287 (FCA) at 288 as cited in Fountain Selected Meats (Sales) Pty Ltd v
It is sometimes said that such costs can be awarded where charges of fraud have been made and not sustained; but, in all the cases I have considered, there has been some further factor which has influenced the exercise of the court’s discretion — for example, the allegations of fraud have been made knowing them to be false, or they have been irrelevant to the issues between the parties.
[51] There was nothing to suggest that the plaintiffs’ allegations in relation to Judith’s spending from Joan’s account were knowingly false. The allegations were not directly relevant to the pleaded case but amounted to a collateral attack. Although the relevance was only marginal, I do not consider this aspect reached the high threshold required to justify an award of indemnity costs.
[52] On the other side of the coin, I expressed concerns in my substantive judgment about the manner in which the defendants conducted the defence of the proceedings, including the lack of openness about the Wills, the probate process and impact on costs and the unfortunate late disclosure of an Enduring Power of Attorney executed by Joan on the same day she executed her 2015 Will.
[53] Balancing all these factors, and cognisant that the overarching objective is to do justice between the parties, I consider that the plaintiffs are entitled to scale costs from the Estate from the commencement of proceedings up to and including the expiry of the settlement offer, together with disbursements but excluding hearing fees.
[54] For all steps thereafter, the plaintiffs are to pay costs to Judith on a 2B basis. Since they have no interest in the residue of the Estate their on-going challenge after all the evidence was in and a reasonable settlement offer made, should not be indulged by the Estate.
Ms Henderson’s claim to costs
[55] Ms Henderson had a limited role in the proceeding as framed. But for the allegation of breach of fiduciary duty, her role would have been strictly limited to placing all relevant factual matters before the Court.
International Produce Merchants Pty Ltd (1988) 81 ALR 397 (FCA) at 400–401 referred to by the Court in Bradbury, above n 31, at [23].
[56] By the time of trial, this third cause of action was merely a backdrop to the main event.33 It occupied little time at the hearing. It cannot have contributed materially to the time and expense of the proceeding overall.
[57] There is merit to Ms Hosking’s submission that the lack of adequate processes at the time that Joan made the 2015 and 2016 Wills was a significant contributor to the dispute. Ms Hosking urges me to direct that the Estate should only be liable for one-third of the reasonable costs incurred by Ms Henderson instead of an indemnity for reasonable costs. I am not persuaded that this is open to me in the present circumstances. It is necessary to distinguish between Ms Henderson’s position as executor and as the supervising partner for the drafter of the 2016 Will.34 Any potential claim in respect of the drafting of the Will involves Ms Henderson in a different capacity altogether. Those different capacities ought not be conflated.
[58] This is factually different from the position in Farn v Loosley because there the Public Trust sought approval for payment of costs by the Estate. In this case, Judith has the only interest in the residue. While I am sympathetic to the proposition that she should be relieved of some of the cost burden arising in these circumstances (and the plaintiffs likewise should their appeal succeed) Judith has not supported the submission that only one-third of Ms Henderson’s costs be met by the Estate, even as an alternative.
[59] Properly seen, Ms Henderson had a limited role in the proceeding directed only to the defence of the allegation of breach of fiduciary obligation. As discussed above, this ended up playing a distinctly minor role legally yet the actions of the executors in the probate process undoubtedly coloured all that followed.
[60] For this reason, and because this claim to 2B costs is duplicative, I make an order for 30 per cent of 2B costs in favour of Ms Henderson against the plaintiffs for the steps after 22 June 2021 only. Based on Mr Scott’s schedule this is the sum of
$6,453.00 (30 per cent of $21,510.00).
33 Gorringe, above n 1, at [193].
34 Crawford (as executors of the estate of Phillips) v Phillips (as executor of the estate of Yukich)
[2018] NZCA 351 at [9].
Result
[61] Based on the schedules presented by each of the parties, the consequences of these orders are:
(a)The plaintiffs are to receive costs of $43,020.00 plus disbursements of
$16,373.4035 from the Estate. The total costs and disbursements payable to the plaintiffs are $59,393.40.
(b)Judith’s reasonable costs are to be met from the Estate.
(c)The plaintiffs are to pay to Judith 2B costs of $21,510 for steps after 22 June 2021, namely preparation for trial and appearance at trial, plus reimbursement for the wasted AVL link cost of $572.16.
(d)The plaintiffs are to pay Ms Henderson as executor costs of $6,453.00.
(e)The amounts in (c) and (d) are to be deducted from the sum in (a) in view of the fact that Judith has the sole interest in the residue of Joan’s Estate.
(f)The plaintiffs are therefore together entitled to payment of
$30,858.24.84 by way of costs from the Estate in addition to their specific bequests.
............................................................
Walker J
35 I have deducted the hearing fee from the actual disbursements claims.
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