Hita v Hita

[2023] NZHC 3095

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2021-419-126

CIV-2023-419-066 [2023] NZHC 3095

IN THE MATTER

of the Estate of EDWARD WILLIAM BENJAMIN HITA

BETWEEN

EMORA HITA

Plaintiff

AND

SAMANTHA JUNE URAIATA HITA

Defendant

Hearing:	24 July 2023
Counsel:	P A Depledge Defendant in person
Judgment:	3 November 2023

COSTS JUDGMENT OF ANDERSON J

This judgment was delivered by me on 3 November 2023 at 3.00 pm pursuant to r 11.5 of the High Court Rules 2016.

……………………………… Registrar/Deputy Registrar

Solicitors:      P A Depledge, Hamilton Copy to:  Defendant

HITA v HITA [2023] NZHC 3095 [3 November 2023]

[1]        This is a costs judgment following my substantive judgment concerning the will of Mr Edward Hita.1

[2]        Edward died leaving five children, including Samantha and Emora. His will appointed Samantha as executor and left all of his estate to her.2 My substantive decision addressed the following claims by Emora:

(a)in CIV-2021-419-126 (the Will Proceeding), an application for recall of probate and for letters of administration to be granted in her favour on the basis that the will was executed under undue influence from Samantha;3 and

(b)in CIV-2023-419-066 (the Family Protection Proceeding), for orders under the Family Protection Act 1955 on the basis that Edward breached his moral duty and for the Court to remedy any inadequacy.

[3]        Samantha was self-represented throughout. Emora is legally aided. She was represented by Mr Depledge.

[4]        The Family Protection Proceeding was initially filed in the Family Court. Samantha applied to strike out both this and the Will Proceeding. Both strike-out applications were dismissed. The Family Protection Proceeding was later transferred from the Family Court to be heard together with the undue influence claim.

[5]        During the hearing, I granted leave to add a secret trust claim to the Will Proceeding. This development came after I raised this as an issue with counsel. The hearing took one and a quarter days.

[6]        Ultimately, I held that neither of the claims in the Will Proceeding were made out. I was satisfied that the will was not executed under Samantha’s undue influence. The fact that Edward left nothing to his other four children was an unexpected decision

1      Hita v Hita [2023] NZHC 2171 (the substantive decision).

2      To avoid confusion among family members with the same name, I refer to all members of the Hita family by their first names.

3      A claim in the Will Proceeding that the will was invalid was not pursued in evidence or at the hearing.

requiring scrutiny. However, the evidence demonstrated that Edward had left all his estate to Samantha on the assumption that she would do the right thing by her siblings.4

[7]        I found that this was a moral, not trust obligation. The secret trust claim failed on that account and because the pleaded trust was that Samantha was required to distribute Edward’s estate to his children equally. The evidence supported only that Edward was leaving his estate for Samantha to decide how it was to be distributed.

[8]        However, Emora was successful in the Family Protection Proceeding. I made an order under s 4(1) of the Family Protection Act that she should receive $55,000 (about 15 per cent) of the net estate.

Parties’ position on costs

[9]        The parties’ contentions on costs are referable to the following annexures to Emora’s submissions:

(a)A schedule for costs at the 2B District Court scale for the Family Protection Proceeding for steps prior to the matter being transferred to the High Court. These total $4,870.50.

(b)A schedule for High Court costs on a 2B basis for steps in the High Court     (not            distinguishing             between    the    proceedings)    totalling

$40,749.50.

(c)A schedule of costs on a 2B basis for Emora’s successful opposition to Samantha’s application to strike out Emora’s claim in relation to undue influence/the will. These total $6,214.00. They are set out separately from the schedule of High Court costs, because in the strike out judgment, Gault J awarded Emora costs on a 2B basis plus disbursements.5

4 At [29].

5      Hita v Hita [2023] NZHC 752 at [24].

(d)Communications with the Legal Services Commissioner confirming that Emora’s total actual costs were $25,586.53 (including GST).

[10]      Mr Depledge submits that as the successful party, Emora is entitled to costs. However, Mr Depledge acknowledges that Emora’s actual costs are less than the 2B scale costs.6 Emora seeks this lower amount of $25,586.53. However, additionally she seeks costs of $6,214,7 being the 2B scale costs separately awarded in the strike out application. Costs are sought out of Edward’s Estate.

[11]      Samantha emphasises that Emora was unsuccessful in her claims other than the Family Protection Act claim. She consents to costs of $4,870.50 being awarded but nothing further, representing the District Court 2B scale costs for the Family Protection Proceeding prior to the matter being transferred to the High Court.8

[12]      Both parties also refer to various correspondence over the course of the proceeding to support their position on costs.

Legal principles

[13]      Costs are at the discretion of the Court.9 In exercising that discretion, the Court must have regard to the principles set out in r 14.2 of the High Court Rules 2016. Of particular importance is the principle that the party who fails in respect of a proceeding or an interlocutory application should pay costs to the party who succeeds.10 However, by r 14.2(f) an award of costs should not exceed the costs incurred by the party claiming costs.11

[14]      In matters of estate litigation, it has long been recognised that what would otherwise be the usual approach to costs in civil litigation may be displaced. In the leading case of Re Paterson, Stringer J said:12

6      Refer [9(a)-(b)] above.

7      Refer [9(c)] above.

8      Refer [9(b)] above.

9      High Court Rules 2016, r 14.1(1).

10     Rule 14.2(1)(a).

11     Rule 14.2(1)(f).

12     Re Paterson [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

…

[15]The Court of Appeal recently applied Re Paterson in Gorringe v Pointon.13

How the principles apply is very fact specific.14

Incidence of costs

[16]      Samantha is not only the sole executor but sole beneficiary. The claims were against the Estate. I agree with Mr Depledge’s submission that any costs award should be payable from the Estate. Samantha did not suggest otherwise.

[17]      I first consider who was the successful party. In the present case, Emora was successful in the Family Protection Proceeding but not the Will Proceeding. The secret trust claim in the Will Proceeding emerged only during the hearing. It was a rabbit set running by me. That cause of action required no further evidence and limited further submission. I do not consider it has materiality for costs purposes. The other cause  of action pursued in the hearing was the undue influence claim. This did have an impact on costs.

[18]      It has been held that where several claims are advanced and one or more succeed, the plaintiff can be regarded as the successful party in that there was a measure of success.15 Here, there are two proceedings which were originally separate only for jurisdictional reasons. They were then heard together, as the facts of both were intertwined. In light of that overlap, I treat Emora as the successful party given her success in the Family Protection Claim. However, the fact that Emora was not

13     Gorringe v Pointon [2023] NZCA 426.

14     Case law examples of the first principle are set out in Dodssuweit v Olivier [2019] NZHC 2707 at [13].

15     Weaver v Auckland Council [2017] NZCA 330, (2017) 24 PRNZ 379 at [26].

successful on all claims should be reflected in some discount to scale costs. I come back to this below.

[19]      I next need to consider Mr Depledge’s submissions on Re Paterson. He submits that “the litigation originate[d] in the fault of the testator”16 within the first principle in Re Paterson, displacing the usual rule that costs follow the event. This would presumably include any discount to scale costs that I make on account of unsuccessful  claims.  He  relies  on  comments  in  my  substantive  decision  where I expressed residual concerns as to whether the will reflected what Edward intended, noted that it was a pity that Edward did not obtain advice, and suggested that this may have avoided the current contest.17

[20]     I do not agree that the proceedings are due to Edward’s fault in the sense contemplated in Paterson. Edward went to the effort to obtain a will. The will is sufficiently clear. I have held that it is not affected by undue influence. There are no findings that the will does not reflect what Edward intended. The fact that legal advice would have been prudent is not of a character to engage the principle in Paterson.

[21]      Mr Depledge also relies on the second principle in Paterson. This relieves a party from paying costs where the plaintiff is unsuccessful in estate proceedings if there were sufficient and reasonable grounds for pursuing the claims. He argues, and I agree, that it was reasonable for Emora to bring the proceedings with all the claims made, including the unsuccessful claims. If applicable, the principle would mean that Emora would not be required to pay costs to Samantha. However, this principle is irrelevant in the current case. Samantha is not seeking costs. Moreover, I have taken an approach which views the proceedings as intertwined, and Emora as the successful party, albeit discounting costs to reflect that she was not wholly successful.

Costs assessment

[22]      Turning to the assessment of costs, I propose to adopt the approach of Young J in Taunoa v Attorney-General (compensation) to a legally aided plaintiff: 18

16     Re Paterson, above n 12.

17     The substantive decision, above n 1, at [107].

18     Taunoa v Attorney-General [compensation] (2004) 8 HRNZ 53.

[43] … I consider the proper approach here is to identify the proper category and band, calculate the total costs payable on that basis, reduce them by an appropriate percentage, in this case to reflect partial success only, and then compare this figure with the total fees payable to counsel from the Legal Services [Commissioner]. If the scale fees exceed the Legal Services payment then [r 14.2(f)] applies.

[23]There is no dispute that 2B is the appropriate category and band.

[24]      The total costs potentially payable at scale comprise three components. First, the sum of $4,870.50 represents scale costs for the steps taken in the Family Protection Act proceeding in the Family Court, prior to the transfer of that proceeding to the High Court. I reject Samantha’s submission that costs should be limited to this. This sum does not include any costs of pursuing the Family Protection claim in the High Court. There is no allowance in it for affidavit evidence, common bundle preparation, hearing preparation or attendance at the hearing.

[25]      Second, the total of High Court scale costs is calculated at $40,749.50. Of this figure, $22,227.00 is referrable to steps in the Will Proceeding before the Family Protection Proceeding was transferred to the High Court. I propose to discount scale costs so as not to include these costs because they related to unsuccessful claims. The balance of $18,522.50 is for steps afterwards associated with evidence, the common bundle, preparation and appearances calculated as one set of costs for both proceedings. I reduce these scale costs by 15 per cent to reflect the partial success. That gives scale costs of $15,744.13 for steps following the transfer of the Family Court proceeding to the High Court.

[26]      Third, Gault J directed scale costs on a 2B basis on the strike out application.19 These costs are $6,024.00. Contrary to submissions made by Samantha, Emora is entitled to the benefit of that decision notwithstanding she did not succeed on her substantive claims. It was an unnecessary interlocutory application.

[27]      Gault J does not appear to have been aware that Emora was legally aided and as to what actual costs she incurred. Based on overall costs, it is likely they were less than scale costs. Gault J’s decisions stands. However, I do not accept that Emora

19     Hita v Hita [2023] NZHC 752 at [24].

should be entitled to these costs plus her full actual costs as Mr Depledge appears to submit. I have regard to the principle in r 14.2(f) when I come to assess the total costs award.

[28]The total scale costs are therefore $26,638.24 comprising the following:

(a)$4,870.50 for steps in the Family Court;

(b)$15,744.13 for steps in the High Court (other than the strike out); and

(c)$6,024 reflected in Gault J’s costs award on the strike out.

[29]      This exceeds Emora’s actual costs of $25,586.53. In my view, it is appropriate to award Emora no more than that sum.20 To the extent that this needs to account for the award already made of scale costs of $6,024 for the strike out, I limit the aggregate costs recoverable for the other scale costs (in [28(a)–(b)] above) to a recovery capped by the total costs incurred.

Parties’ communications

[30]      The parties referred me to various communications said to be relevant to the costs issue. I do not agree that they are.

[31]      Mr Depledge highlights that Samantha rejected settlement proposals put to her and did not enter into settlement discussions. He argues that Emora’s Family Protection Act claim was obvious and Samantha’s conduct as executor was significantly influenced by her concern to protect her own personal interests as the beneficiary. The communications are of no significance given that I am awarding the full costs Emora incurred. In any event, the first communication written at the outset was not in the nature of an offer, let alone a Calderbank offer. It does not have a cost consequence. The second communication made an offer, but was made on the eve of trial. It was at such a late stage as to have minimal impact on a costs award. The letter also sought more than the sum received in the proceeding.

20     Taunoa v Attorney-General (compensation) at [45].

[32]      Samantha relies on letters she sent to Emora (through Mr Depledge) and to her other siblings. The letters inform them that Edward’s estate will not be liable for any costs incurred in relation to his estate unless they were incurred by Samantha. Samantha cannot unilaterally exclude Emora’s costs claim. This correspondence is also irrelevant.

Orders

[33]      Costs and disbursements21 of $25,586.53 are awarded to Emora to be paid out of the Estate of Edward Hita.

[34]      Samantha requested that I give her time to realise funds out of the Estate to meet a costs award given that its only asset is real property. I do not consider that this costs judgment is a proper forum for questions about delaying enforcement. I do not have sufficient information on steps that could be taken by Samantha in any event. Nor have I heard from Emora on this issue. I decline to make any order as to timing.

Anderson J

21     Although the annexures provided by Emora separately listed disbursements, the total paid to    Mr Depledge as legal services provider was $25,586.53, which I understand to include disbursements (Legal Services Act 2011, s 97 and 106).