McGarvey v Woodward

[2020] NZHC 2955

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE

CIV-2020-463-66

[2020] NZHC 2955

UNDER

the Property Law Act 2007 and Administration Act 1969

IN THE MATTER

of the estate of PEGGY McGARVEY

BETWEEN

SHEENA TEWAIMANIA McGARVEY

Applicant

AND

JUDY PIOI WOODARD and YVONNE

TAWHIWHI McGARVEY as trustees of the estate of PEGGY McGARVEY Respondents

Hearing:

On the papers

Counsel:

N Bradley for the Applicant

N Brazendale for the Respondents

Judgment:

10 November 2020

JUDGMENT OF GORDON J

This judgment was delivered by me

on 10 November 2020 at 4.15 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors:           Robinson Law Limited, Whakatane

Holland Beckett, Tauranga

McGARVEY v WOODARD [2020] NZHC 2955 [10 November 2020]

Introduction

[1]The applicant and respondents each seek costs against the other.

[2]                 In the substantive proceeding, brought by way of an originating application dated 7 August 2020 and filed on 11 August 2020, the applicant sought orders that:

(a)the respondents be removed as administrators  of  the  estate  of  Peggy McGarvey and an independent administrator be appointed in their place; and

(b)orders for the sale of a property at 20-22 Morrison Road, Taneatua with the net sale proceeds to be paid to the beneficiaries of the estate of Peggy McGarvey in accordance with her will.

[3]                 The applicant also sought leave to commence the proceeding by way of originating application.

Background

[4]                 As is apparent from the above reference to the orders sought, this proceeding concerns the estate of Peggy McGarvey who died on 21 September 2015. Under her will she left her residential property at 20 Morrison Road, Taneatua (the property) to her  eight  children  equally.  Three of those  children  are  the  applicant,  Sheena McGarvey (Sheena), and the respondents, Judy Woodard  (Judy)  and Yvonne McGarvey (Yvonne).1

[5]                 On Friday, 25 September 2020, the property was transferred to the beneficiaries of the estate. At the first call of the application before Associate Judge Bell, the following Tuesday, 29 September 2020, having regard to the transfer, Sheena no longer sought to remove the sisters as executors of their mother’s estate. But she wished to continue with her application under s 339 of the Property Law Act 2007 to

1      Given the common surname of the applicant and one of the respondents, I will refer to the applicant and both respondents by their Christian names.

have the property sold so that each of the eight children can share in the proceeds of sale.

[6]                 In his minute following the conference, Associate Judge Bell noted that each side sought costs on the proceedings to that date. The matters on which they sought costs being outside the jurisdiction of an Associate Judge, the Court directed that memoranda be filed and that the file then be placed before a High Court Judge to decide costs on the papers. Memoranda have now been filed.

Submissions

[7]                 The respondents seek costs on a 2B basis in the sum of $6,453: being $4,780 for filing a notice of opposition and supporting affidavits; $956 for filing a memorandum for case management conference or mentions hearing; and $717 for appearance at first case management conference.

[8]                 Ms Brazendale, for the respondents, first notes that Sheena is legally aided. She submits that s 45 of the Legal Services Act 2011 (the Act) makes it clear that the likelihood of a costs order against an aided person in civil proceedings is reduced but not removed altogether. She refers to s 45(2) of the Act which provides that a costs order will be made against an aided person only when the Court is satisfied that there are exceptional circumstances. By reference to the categories of conduct referred to in s 45(3), Ms Brazendale submits that exceptional circumstances exist.

[9]                 She submits the estate has incurred unnecessary cost. Ms Brazendale submits that Sheena was well aware prior to filing and serving the originating application that the property transfer by the executors was about to happen. She says on or about August 2020 Sheena made inquiries as to progress on the property transfer and was informed that there remained just two siblings still to execute their A & I forms and provide verified identification.

[10]              Ms Brazendale also refers to the history of the negotiations for the sale of the property and the alleged failure of Sheena to take part in the discussions, submitting that Sheena was simply wishing to cause division within the whānau. She submits

these matters also fall within the examples of exceptional circumstances in s 45(3) of the Act.

[11]              Ms Bradley, for the applicant, submits that Ms Brazendale’s submissions, as referred to in [10] above confuse the two separate applications within the originating application. Ms Bradley submits that most of Ms Brazendale’s submissions relate to the application for sale and are irrelevant to the issue of costs in relation to the application for removal of executors.

[12]              But in any event, Ms Bradley submits the application became necessary and appropriate when, after five years and with notice having been given to the executors that Sheena would file proceedings to have them removed, they did not immediately take steps to distribute the estate. She submits a delay of five years is an inordinate period of time.

[13]              She submits Sheena properly discontinued her application for removal as soon as the executors distributed the estate. She did not allow proceedings to continue unreasonably.

[14]              She further notes that Sheena had consented to an extension of time for filing a notice of opposition. She submits that, had Judy and Yvonne distributed the estate during this period, Sheena would then have discontinued her application for removal. The only reason a notice of opposition was required was because of the executors’ chronic delay in settling the transfer of the property.

[15]              So far as Sheena’s application for costs is concerned, Ms Bradley notes that, calculated on a 2B basis, the total costs would be $6,192.2 This is made up of three items: $4,780 for filing application and supporting affidavits; $956 for preparation for the first case management conference; and $717 for appearance at the first case management conference. However, Sheena’s actual costs (the amount she owes legal aid) are $2,175.20.

2      That is the sum stated in counsel’s memorandum. The correct total is $6,453.

[16]              In support of Sheena’s application for costs, Ms Bradley submits that the executors had clear notice that she intended filing proceedings if the property was not transferred to the beneficiaries. In a letter dated 31 May 2019, it was stated that Sheena was still considering applying to have the executors replaced and requested that the transfer of the property occur within 14 days of the date of the letter. She gave further notice by email on 17 January 2020.

Discussion

[17]              First, I agree that a significant portion of Ms Brazendale’s submissions on behalf of Judy and Yvonne (as referred to in [10] above) go to the application for sale. I put them to one side.

[18]              Second, r 14.1 of the High Court Rules 2016 provides that all matters are at the discretion of the Court if they relate to costs of a proceeding, or are incidental to a proceeding, or of a step in the proceeding. A proceeding must be extant before costs can be incidental to it.3 Generally costs are to reflect how parties have acted during litigation not before it.4

[19]              The complaints made by Judy and Yvonne against Sheena are in respect of conduct prior to the proceeding. It cannot be said Sheena behaved improperly in the proceeding. She discontinued the part of her application seeking removal of the executors on the second working day after Judy and Yvonne transferred title to the property to the beneficiaries.

[20]              Equally, I do not consider there is a basis for Sheena’s claim against Judy and Yvonne. The delays she complains of were almost all prior to the filing of her originating application. There was some delay into the following month before the property was in fact transferred. But that latter delay would not found an application for costs.

[21]In all the circumstances I consider costs should lie where they fall.

3      Braeburn Dairies Ltd v McGregor & White  Electrical  Ltd  HC Dunedin CIV-2009-412-668,  16 December 2011 at [14].

4      Paper Reclaim Ltd v Aotearoa International Ltd [2006] 3 NZLR 188 (CA) at [160].

Result

[22]              The applications for costs by the applicant and respondents are refused. Costs are to lie where they fall.

Gordon J