Hotham v Weir

[2006] NZCA 332

IN THE COURT OF APPEAL OF NEW ZEALAND

CA228/05
CA229/05

BETWEENSANDRA JEANETTE HOTHAM

Appellant

ANDANNE CHERYL WEIR

Respondent

Hearing:21 November 2006

Court:Chambers, Robertson and Ellen France JJ

Counsel:Appellant in Person

B M Cunningham for Respondent

Judgment:4 December 2006 at 3 pm

JUDGMENT OF THE COURT

CA228/05

A        Leave to appeal is granted.

B        The appeal is allowed. 

CThe High Court award of costs made on 9 August 2005 in favour of the respondent is set aside.

D        There will be no order as to costs in respect of the High Court or this court. 

CA229/05

EThe appeal is dismissed.

F        There will be no order as to costs. 

REASONS OF THE COURT

(Given by Chambers J)

An appeal about costs

[1]       We do not get many appeals purely on the issue of costs – but this is one.  Sandra Hotham, the appellant, feels strongly that she was wrongly ordered to pay costs in the sum of $2,650 to her sister, Anne Weir, the respondent.  It is most unfortunate that this family dispute arising from the parties’ late mother’s will has reached this court, especially on a relatively small order for costs. 

[2]       Before listing the issues that arise on this appeal, we set out the essential facts necessary for understanding the issues and our resolution of them. 

[3]       In August 2004, Juanita Pearson died.  Under her will, she appointed her daughter, Sandra Hotham, and her son, Gray Pearson, as her executors.  She also left both of them $50,000.  Among the other beneficiaries was another daughter, Anne Weir, to whom she left $10,000. 

[4]       The trustees, through their solicitors, sought the consent of all beneficiaries to enable payment to themselves of their $50,000 bequests.  All beneficiaries, including Mrs Weir, gave written consents.  Those bequests were paid. 

[5]       Following that, Mrs Weir commenced a proceeding in the Family Court under the Family Protection Act 1955.  She considered that her mother had not provided for her adequately under her will.  Through her lawyer, she sought to have the bequests repaid.  Mrs Hotham and Mr Pearson refused to repay them. 

[6]       Mrs Hotham decided that she would prefer the family protection proceeding to be heard in the High Court rather than the Family Court.  She applied for removal under s 3A(4) of the Family Protection Act.  Mrs Weir’s stance to that application was precisely set forth in her notice of opposition.  Paragraph 1 read as follows:

If the Trustees of the Estate fail or refuse to refund to the Estate the legacies of $50,000 each that were paid by the Trustees of the Estate to themselves on 1 September 2004, she will not oppose the present application, because she will herself make application to this Court for orders:

a.Under s 49 of the Administration Act.

b.For the refund to the Estate of the moneys paid by the Trustees to themselves, pending determination of Mrs Weir’s claim. 

[7]       If, on the other hand, the trustees repaid the bequests, then she advised she intended to oppose the application.  It is common ground that, before the hearing of the application, the trustees had made it clear that they did not intend to refund their legacies.  Accordingly, Mrs Weir’s stance was non-opposition to the removal. 

[8]       Mr McCartney represented the other interested parties, namely Mrs Pearson’s other children.  He advised, in a memorandum filed before the hearing, that they neither opposed nor consented to the application. 

[9]       The application came before Laurenson J in the High Court.  His Honour dismissed the application: Hotham v Weir HC AK CIV 2005‑404‑4067 9 August 2005.  His Honour awarded costs (later calculated at $2,650) to both Mrs Weir and the other parties represented by Mr McCartney.  It is against the costs order in Mrs Weir’s favour that Mrs Hotham seeks to appeal.  The other costs order is of no concern to her as Mr McCartney’s clients have indicated that they have no intention of enforcing it. 

[10]     Mrs Hotham does not seek to appeal against Laurenson J’s dismissal of her application to remove, as removal to the High Court was in fact achieved a week later by a decision of the Family Court: Weir v Pearson FC NSD FAM 2005/044/316 16 August 2005. 

[11]     Mrs Hotham, who at that stage was acting for herself, immediately sought to have Laurenson J’s costs order reviewed under r 264 of the High Court Rules.  That application came before Venning J, Laurenson J having by then retired.  Venning J declined the application on the ground of lack of jurisdiction: see minute dated 26 September 2005.  He advised Mrs Hotham that, if she were dissatisfied with the costs order, she should have appealed to the Court of Appeal.  Of course, by this time, Mrs Hotham was out of time for an appeal to this court. 

[12]     Venning J’s minute prompted Mrs Hotham to file two proceedings in this court.  The first, under CA228/05, was an application for leave to appeal out of time from Laurenson J’s costs order in Mrs Weir’s favour.  The other, filed under CA229/05, is an appeal against Venning J’s refusal to review Laurenson J’s costs order. 

Issues on the appeal

[13]     The first question is whether Mrs Hotham should be granted leave to appeal out of time against Laurenson J’s costs order.  Mrs Weir opposes the grant of leave.  For reasons we shall give, we have decided that it is appropriate for leave to be granted. 

[14]     That then leads on to the second issue: was the judge plainly wrong to award costs to Mrs Weir?  For reasons we shall give, we have determined that he was wrong.  Costs should have been allowed to fall where they lay. 

[15]     Mrs Hotham’s success on her out of time appeal against Laurenson J’s decision means that we do not need to consider her appeal against Venning J’s decision.  That appeal may simply be dismissed. 

[16]     The final issue is whether Mrs Hotham should receive costs in this court.  She seeks them. 

Should Mrs Hotham be granted leave to appeal against Laurenson J’s decision?

[17]     We have decided that Mrs Hotham should be granted leave to appeal out of time for the following reasons. 

[18]     First, the delay was not excessive.  Mrs Hotham could have appealed as of right up to 6 September 2005.  Her application for leave to appeal out of time was filed on 25 October 2005, about seven weeks out of time.  But the delay has been explained.  Mrs Hotham was acting for herself at that time.  She believed that Laurenson J’s costs order could be reviewed under r 264 of the High Court Rules.  She was mistaken in taking that course.  Once Venning J had corrected her, she sought leave to appeal out of time reasonably promptly. 

[19]     Secondly, Mrs Weir cannot point to any real prejudice from leave being granted.  She knew that Mrs Hotham was unhappy about the costs order from the time it was made.  The application to review the costs order was, after all, filed within a week of Laurenson J’s decision.

[20]     Thirdly, the intended appeal is certainly arguable. 

[21]     The only factor going the other way is the small amount of money involved.  But, against that, we accept that Mrs Hotham feels strongly about the principle involved in this case, especially given the fact that none of her siblings opposed her application to remove the family protection proceeding into the High Court.  Further, later in August 2005, effectively with everyone’s consent, Judge Fleming in the Family Court did exactly what Laurenson J had declined to do, namely remove the proceeding into the High Court.  While that fact is not relevant to the correctness of Laurenson J’s costs decision, it nonetheless is a factor in the overall question as to whether leave should be granted.  It is important that, given the very unusual course these proceedings have taken, these two sisters have the benefit of this aspect of their dispute being dealt with on the merits.  In these circumstances it would be unfair if Mrs Hotham were not able to have her complaint aired and determined because of her error as to the correct appeal/review path.

Was the judge plainly wrong to award costs to Mrs Weir?

[22]     At the hearing before Laurenson J, Mrs Hotham appeared in person.  Mr Gay represented Mrs Weir and Mr McCartney represented Mrs Pearson’s other children. 

[23]     Mr McCartney’s appearance was something of a surprise, as he had indicated in his pre-hearing memorandum that he would not be appearing at the hearing.  He apparently advised the judge that he would not be taking part in the hearing, but said that he would remain as an observer.  In these circumstances, the judge’s reference to Mr McCartney’s client’s “[opposing] the present application” is a little perplexing. 

[24] The judge recorded that “it suited Mrs Weir to have the matter transferred to [the High] Court”, as she intended to seek a tracing order under s 49 of the Administration Act: at [7].

[25]     Notwithstanding the fact that there was no real opposition to the transfer, His Honour ruled that the proceeding should not be transferred.  The reasons for His Honour’s ruling do not matter, as that ruling is not under appeal.  It was, of course, open to the judge not to make the order sought, even in circumstances where there was no true opposition to the course.  The reason there is no appeal from the judge’s refusal to transfer is that the transfer was later achieved by order of the Family Court. 

[26] Notwithstanding the decision of the High Court, Judge Fleming, on 16 August 2005, made the very order that Laurenson J had refused to make just a week before. Judge Fleming saw as decisive the fact that Mr Gay had indicated “that he [proposed] to make an application pursuant to s 49 of the Administration Act”, an application in respect of which only the High Court had jurisdiction: at [3]. Judge Fleming thought that the proceedings should be “resolved in the most economical way possible” and it seemed to her “to be unanswerable that if there is to be a further application made for a determination of one of the issues in the High Court, then the entire proceedings should be determined in that Court”: at [4]. She said that, as she understood Laurenson J’s judgment, “he also would have transferred the proceedings to the High Court…, had he realised that this further application was to be filed”: at [4]. In fact, Laurenson J had realised that Mr Gay intended to file a s 49 application, as that had been expressly noted in Mrs Weir’s notice of opposition in the High Court and it was referred to by Mr Gay in argument before Laurenson J: see the High Court decision at [7]. Laurenson J’s principal reason for refusing to remove the proceeding into the High Court was that he thought, given the modest size of the estate, the parties should resolve the dispute “as soon as possible”, an outcome most likely to be achieved swiftly in the Family Court environment: at [13].

[27] We are not concerned with the rightness or wrongness of the competing views as to appropriate forum. The only relevance of Judge Fleming’s decision is perhaps to show that Mrs Hotham’s application was not without merit. What we are concerned with is Laurenson J’s award of costs to Mrs Weir and Mr McCartney’s clients, in each case on a 2B scale basis. The calculation according to scale came to $2,650 each. The justification for that award was simply that, in His Honour’s view, “the present application was not warranted and has simply served to delay the matter and add costs”: at [16].

[28]     There was no possible justification for a costs order in favour of Mr McCartney’s clients.  His clients had not filed a notice of opposition.  Nor did Mr McCartney seek to take part in the proceeding before Laurenson J.  A week later, in the Family Court, Judge Fleming recorded Mr McCartney’s clients’ stance as follows, at [3]:

If [Mr Gay’s s 49] application is made then both the estate represented by Ms Duffy QC and the other interested [parties] represented by Mr McCartney take the view that it would be appropriate that all the proceedings, including the substantive family protection proceedings, be transferred to the High Court.

[29]     We are not, however, concerned with that particular costs order, since, as we have already stated, Mr McCartney’s clients have indicated that they do not intend to enforce it. 

[30] It seems equally clear that Mrs Weir should not get a costs order, given the stance she adopted in her notice of opposition, as set out at [6] above. It appears that at the hearing, Mr Gay’s stance wavered and became akin to opposition, although the passage from His Honour’s judgment we have quoted above at [24] would indicate that Mr Gay was still seeking “to have the matter transferred to [the High] Court”, albeit for a quite different reason from that which was motivating Mrs Hotham. Later in the month, he advised the Family Court of his “unequivocal instructions” to apply to the High Court under s 49, which led to the transfer of the proceeding to that court, the very course Mrs Hotham and Mrs Weir had sought from the start, for their differing reasons.

[31]     In these circumstances, Mrs Weir should not have been regarded as “the winner”.  Mrs Hotham did not (immediately) get what she wanted, but nor did Mrs Weir.  Had Laurenson J granted Mrs Hotham’s application, it would have been very unfair if Mrs Weir and Mr McCartney’s clients had been required to pay costs to Mrs Hotham, given their non-opposition to what was proposed.  The converse must also apply.

[32]     In short, we consider, with respect to His Honour, that his decision to award costs to Mrs Weir was plainly wrong in circumstances where she herself wanted the proceeding transferred to the High Court so that she could pursue an application under s 49 of the Administration Act.

[33]     Given the failure of the application despite the non-opposition, costs should have been allowed to fall where they lay.  For these reasons, we set aside the award of costs in Mrs Weir’s favour.

Should Mrs Hotham receive costs in this court?

[34]     If the appeal were successful, Mrs Hotham sought costs in this court.  We are clear that costs should lie where they fall in this court.  These are the reasons.

[35]     First, Mrs Hotham appeared in person.  The established rule in New Zealand is that a lay litigant is not entitled, except in exceptional cases, to recover costs: Re Collier (A Bankrupt) [1996] 2 NZLR 438 (CA) and Lysnar v National Bank of NZ Limited(No 2) [1935] NZLR 557 (CA). Mrs Hotham sought to argue that we should review that established rule. We decline to do so. If the rule is to be re-evaluated, it will need a much more compelling case than this one.

[36]     Secondly, Mrs Hotham has been granted an indulgence, in being permitted to appeal out of time. 

[37]     Thirdly, the amount in dispute was small. This dispute about a relatively small amount should have been able to be settled. 

[38]     The second and third reasons also persuade us that this is not an appropriate case in which Mrs Hotham should receive her disbursements on the appeal. 

Solicitors:
Appellant in Person
Barbara Vague Law, Auckland, for Respondent