McFadzean v Moleta - [2013] NZHC 2694

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

CIV-2012-441-000682 [2013] NZHC 2694

UNDER the Administration Act 1969

IN THE MATTER

of the Estate of the late DONNA JUNE BENGSTON

BETWEEN

JOHN DOUGLAS McFADZEAN

Plaintiff

AND

GLYNIS ROSILYN MOLETA AND KIM ANTHONY MOLETA

Defendants

PETER KANE BENGSTON
Added Party

Judgment: 16 October 2013

JUDGMENT AS TO COSTS OF COLLINS J

Introduction

[1] In a decision dated 28 June 2013 I determined that Donna Bengston had testamentary capacity when she made a will on 27 February 2012, and granted probate to the plaintiff (executor), in relation to that will. I allowed the parties to file memoranda within 15 working days on costs if they could not be agreed upon. Counsel have since filed memoranda, with the Moletas seeking full indemnity costs out of the estate and Mr Bengston seeking costs from the Moletas. The last submissions on costs were filed on 25 September 2013.

Background to the proceedings

[2] The executor of Donna Bengston’s will sought a grant of probate but otherwise remained neutral. The Moletas, who were Donna Bengston’s adult brother and sister, opposed the application for probate, as they claimed that Donna Bengston

McFADZEAN v MOLETA [2013] NZHC 2694 [16 October 2013]

lacked testamentary capacity at the time the will was made. Mr Bengston, Donna Bengston’s husband and the sole beneficiary under the will, supported the executor’s application and sought to have the will declared valid. The result of my finding that Donna Bengston had testamentary capacity, and that she made a valid will on 27 February 2012, meant that Mr Bengston’s case was successful.

Mr Bengston’s position on costs

[3] As the successful party, Mr Bengston has claimed 2B costs and disbursements from the Moletas. He accepts that Donna Bengston’s testamentary capacity justified investigation. However, in circumstances where he is the sole beneficiary under the will, he will effectively have to meet his own costs out of the estate.

The Moletas’ position on costs

[4] The Moletas seek to have their costs and disbursements met by the estate on an indemnity basis.

[5] The Moletas submit that estate litigation is an exception to the usual rule, that an unsuccessful party should pay the successful party’s costs. They submit that they were justified in opposing the will made while Donna Bengston was seriously ill, very soon before her death. They therefore submit it is appropriate that they be reimbursed for their total costs and the disbursements they incurred in challenging the will.

Analysis

[6] The general principle prescribed by the High Court Rules in respect of this Court’s civil jurisdiction is that costs should follow the event, and be awarded to a successful party against an unsuccessful party.1 Departures from that general principle are allowed in the circumstances set out in r 14.7.

1 High Court Rules, r 14.2(a).

[7] In probate proceedings where the capacity of the testator is at issue, this presumption can be displaced, as it is the Court’s obligation to ensure that legitimate concerns about…

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 McFadzean v Moleta

Details

AGLC: McFadzean v Moleta [2013] NZHC 2694
Case: [2013] NZHC 2694
Decision Date: 16 October 2013

CaseChat Overview and Summary

In the High Court of New Zealand, Napier Registry, McFadzean v Moleta was a case regarding the estate of the late Donna June Bengston. John Douglas McFadzean, the plaintiff and executor of the will, was opposed by Glynis Rosilyn Moleta and Kim Anthony Moleta, who were Bengston's siblings, and Peter Kane Bengston, who was Bengston's husband and the sole beneficiary under the will. The main legal issue was whether Donna Bengston had testamentary capacity when she made her will on 27 February 2012, and if the will was valid. The court determined that Bengston did have testamentary capacity and the will was valid, leading to the grant of probate to McFadzean.

The court's reasoning in this case was based on the general principle that costs should follow the event, and be awarded to a successful party against an unsuccessful party. However, in probate proceedings where the capacity of the testator is at issue, this presumption can be displaced, as it is the Court's obligation to ensure that legitimate concerns about the capacity of the testator are investigated. The court found that there were sufficient and reasonable grounds for the Moletas to challenge the capacity of Donna Bengston when she made her 2012 will, as she was seriously mentally unwell at the time the will was made, the will was made within 24 hours of her death, and the new will substantially altered the dispositions under the old will.

The court decided that even though the Moletas were unsuccessful parties, they were justified in challenging the will given the nature of the case and the issues it raised. Consequently, they should be entitled to recover their costs on a scale 2B basis and disbursements as set by the Registrar, from the estate. This decision was based on the precedents set in Woodward v Smith, Nijsse v Squires, and Fraser v Chalmers, where the challengers were either excused from paying the successful party's costs or awarded costs out of the estate. The final orders were that the Moletas would be entitled to recover their costs on a scale 2B basis and disbursements as set by the Registrar, from the estate.

Orders