Loosley v Powell
[2018] NZCA 73
•28 March 2018 at 11:30 am
| IN THE COURT OF APPEAL OF NEW ZEALAND |
| CA168/2017 [2018] NZCA 73 |
| BETWEEN | JENNIFER LOOSLEY AND ROBERT GEORGE LOOSLEY AS EXECUTORS OF THE ESTATE OF ALLISON SLATER |
| AND | KATHERINE ANNE POWELL, BENJAMIN EDWARD POWELL, BARBARA ANNE POWELL, JILL ROSEMARY ELEVELD AND MARK ELEVELD |
| Court: | French, Cooper and Asher JJ |
Counsel: | A F Grant and H G Holmes for Appellants |
Judgment: | 28 March 2018 at 11:30 am |
JUDGMENT OF THE COURT
The appellants and respondents are each entitled to costs for a standard appeal on a band A basis and usual disbursements, to be paid out of the estate. We certify for two counsel for each side.
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REASONS OF THE COURT
(Given by Asher J)
Introduction
This Court, in its judgment of 2 February 2018, dismissed the appeal of the appellants Jennifer and Robert Loosley.[1] The High Court had recalled probate of a will made by Allison Slater on 2 May 2014, because she lacked testamentary capacity.[2] We said in relation to costs in this Court:[3]
[125] We received submissions on costs at the end of the hearing, at our request. Having reflected on the matter we think it only fair that the parties have the opportunity of addressing the question of costs in the light of this judgment. We invite submissions …
[1]Loosley v Powell [2018] NZCA 3.
[2]Farn v Loosley [2017] NZHC 317, [2017] 3 NZLR 383.
[3]Loosley v Powell, above n 1.
We have now received the submissions for the parties. Mr Morgan QC, for the respondents, seeks costs from the appellants in their personal capacity, rather than as executors. He contends they should be personally liable to pay costs on the appeal because they were effectively acting for their sons who are residuary beneficiaries, and not in their capacity as executors.
Mr Grant for the appellants resists this submission. He points out that such a result would be contrary to the decision of Courtney J as to costs in the High Court.[4] He submits that the appellants were carrying out their duties as executors when they resisted the claim and brought the appeal. We record that in both the oral and written submissions counsel have been seeking scale costs and not indemnity costs.
[4]Farn v Loosley [2017] NZHC 1951.
In her costs decision in the High Court Courtney J observed, on the issue of testamentary capacity, that the litigation was largely attributable to Allison’s own conduct.[5] In that context she clearly saw the appellants as acting as executors.[6] She stated:
[22] Mrs Loosley certainly had an interest in the proceeding as a beneficiary as well and would have been entitled to participate in the proceeding to advance that interest. But her participation as a defendant was advanced in tandem with her husband, who was not a beneficiary, and was consistent with their positions as executors. I am satisfied that Mr Grant’s representation of the defendants was related to their status as executors and that the calculation of costs should include the costs of that representation.
[5]At [14].
[6]At [22].
Although Courtney J’s costs judgment was challenged on appeal before us, there was no dispute as to this finding.
Our analysis
This Court has an overriding discretion as to costs in all proceedings and a regime is set out in the Court of Appeal (Civil) Rules 2005 (the Rules).[7] The approach to costs in proceedings involving contested wills is not referred to in the Rules but is regarded as settled by the statement of Stringer J in Re Paterson (Deceased) where he observed, following English authority:[8]
(i) If the litigation originates in the fault of the testator — eg 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.
[7]Court of Appeal (Civil) Rules 2005, r 53.
[8]Re Paterson (Deceased) [1924] NZLR 441 (SC) at 442–443, citing Mitchell v Gard (1863) 3 Sw & Tr 275 and Spiers v English (1907) P 122.
The usual position under r 53A(a), that the person who has failed in the litigation pays costs, is modified by the Re Paterson approach, applied by the Court in its overriding discretion. In this case the will-maker had made a will, the appellants were the executors, and the beneficiaries under that will might well have had a sound basis for complaint if the executors had not defended her will against allegations of invalidity because of mental incapacity. There were arguments that properly could be run by the appellants in support of the will of 2 May 2014, and these were run. The fact that they failed does not mean that there were not “sufficient and reasonable grounds”, in terms of Re Paterson, to pursue the litigation.[9] In this regard we apply the same approach of Courtney J, which although this was an appeal, in the circumstances remains applicable.
[9]Re Paterson (Deceased), above n 8, at 442.
It follows that the appellants, in resisting the claims of mental incapacity and in bringing this appeal, were acting in a manner consistent with their positions as executors. The fact that their children would have benefitted from a successful appeal as residuary beneficiaries cannot be seen as having cancelled their position and duties as executors.
We have reached the view therefore that the costs of all parties in this Court should be payable from the estate. Obviously the respondents should have their costs payable by the estate because they were successful.
There was also an appeal against Courtney J’s costs judgment, heard and considered together with the substantive appeal on testamentary capacity. The appeal on costs was dismissed. The respondents seek an allowance for costs in respect of that appeal. However, that issue took little time before us, and we do not consider that any particular costs award under that head is warranted.
Result
The appellants and respondents are each entitled to costs for a standard appeal on a band A basis and usual disbursements, to be paid out of the estate. We certify for two counsel for each side.
Solicitors:
Duthie Whyte, Auckland for Appellants
Harkness Henry, Hamilton for Respondents
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