Norager v Norager
[2023] NZHC 1826
•13 July 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV 2022-404-000316
[2023] NZHC 1826
IN THE MATTER OF The Estate of HARLEY ROBERT NORAGER (Deceased) BETWEEN
MARIA THERESA ALFORD NORAGER
Applicant/Counterclaim Defendant
AND
ANDREW ROBERT NORAGER
First Respondent (Caveator)/Counterclaim Plaintiff
KURT CHARLES NORAGER
Second Respondent/Related Party
Hearing: On the papers Counsel:
N W Woods for the Applicant
T A Chubb for the First Respondent
K D Puddle for the Second Respondent
G D Stringer for the Applicant in her capacity as a BeneficiaryJudgment:
13 July 2023
JUDGMENT OF TAHANA J
(Costs)
This judgment was delivered by me on 13 July 2023 at 1.00pm Pursuant to Rule 11.5 of the High Court Rules
…………………………
Registrar/Deputy Registrar
Solicitors/Counsel:
Rice Craig, Auckland Inder Lynch Auckland Fencible Law Limited
K3 Legal Limited, Auckland
Tracy Chubb, Barrister, Auckland Kerry Puddle Law, Auckland Cooney Lees Morgan, Tauranga
NORAGER v NORAGER (Costs) [2023] NZHC 1826 [13 July 2023]
Introduction
[1] The first and second respondents (Mr Andrew Robert Norager (Andrew) and Mr Kurt Charles Norager (Kurt)) apply for costs in relation to my judgment dated 31 March 2023 discharging an order nisi held by Ms Maria Theresa Alford-Norager (Maria) and appointing a temporary administrator.1 The respondents seek costs on a category 2B basis with a 50 per cent uplift.
[2] Maria says that costs should lie where they fall or alternatively, be paid out of the estate.
[3] Counsel for the estate refers to the submissions of Maria and says that they anticipate that the new administrator may wish to instruct new counsel.
Relevant law
[4] Costs are at the discretion of the Court.2 Rule 14.2 of the High Court Rules 2016 (HCR) sets out the principles applicable to the determination of costs and include:
(a)the party who fails with respect to a proceeding or an interlocutory application should pay costs to the party who succeeds:
(b)an award of costs should reflect the complexity and significance of the proceeding:
(c)costs should be assessed by applying the appropriate daily recovery rate to the time considered reasonable for each step reasonably required in relation to the proceeding or interlocutory application:
(d)an appropriate daily recovery rate should normally be two-thirds of the daily rate considered reasonable in relation to the proceeding or interlocutory application:
1 Norager v Norager [2023] NZHC 699.
2 High Court Rules 2016, r 14.1.
(e)what is an appropriate daily recovery rate and what is a reasonable time should not depend on the skill or experience of the solicitor or counsel involved or on the time actually spent by the solicitor or counsel involved or on the costs actually incurred by the party claiming costs:
(f)an award of costs should not exceed the costs incurred by the party claiming costs:
(g)so far as possible the determination of costs should be predictable and expeditious.
Analysis
Should costs be awarded or lie where they fall?
[5] Andrew’s application dated 22 April 2022 to remove Maria as the holder of the order nisi was brought on the basis that she be replaced by Mr Vernon Reeve, as temporary administrator. At the hearing, counsel for Andrew indicated that a solicitor had agreed to act as an independent administrator and so if Mr Reeve was not deemed suitable a solicitor could be appointed. I held that Mr Reeve was not suitably independent.
[6] It follows that Maria’s position, that Mr Reeve was not suitable, was accepted and she was entitled to oppose the application on that basis.
[7] I also accepted that there was no misconduct on the part of Maria in her role as director in leasing the property owned by Hauiti Building Ltd (the company), in which the estate holds 99 per cent of the shares, and that was not a factor in determining that a temporary administrator should be appointed.3
[8] A temporary administrator was also not appointed only by reason of “hostility” by Andrew and Kurt towards Maria, but because of the conflicts of interest arising from Maria’s various roles – as director and shareholder of the company, as trustee of the Norager-Alford family trust (the Trust) (which owed monies to the estate), as
3 Norager v Norager [2023] NZHC 699 at [46].
beneficiary, and as executrix.4 Neither the company nor the trustees of the Trust had separate legal representation. That position was known to the estate and Maria, and they continued to oppose the appointment of an independent administrator.
[9] Counsel for Maria submits that Kurt should not be awarded any costs because he resisted the appointment of an impartial temporary administrator throughout. No evidence was provided in support of this submission. Kurt filed an affidavit dated 26 April 2022 which states in part:
Given these circumstances, I believe Maria is unable to discharge the duties of executor in an impartial manner. I therefore support my brother’s application to remove Maria as the executor of my father’s estate and to appoint an independent third-party executor to administer the estate. I agree with the appointment of Reeves Vern.
[10] The above passage does not indicate resistance and expressly refers to support for an “independent” third-party executor. The fact that Kurt supported Mr Reeve is not evidence that he would not support another suitability independent administrator.
[11] In those circumstances, it is appropriate that costs be awarded in favour of both of the respondents.
Uplift
[12] In seeking an uplift of 50 per cent the respondents rely on their solicitors’ correspondence proposing that an independent executor be appointed.
[13] The court may order a party to pay increased costs if the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by failing, without reasonable justification, to accept an offer of settlement.5
[14] Andrew relies on correspondence dated 10 September 2021 from his counsel (Ms Tracy Chubb) to solicitors for the estate (Rice Craig) proposing that Andrew withdraw the caveat and not oppose the granting of probate, and in return, Maria
4 At [40] to [62].
5 High Court Rules 2016, r 14.6(3)(b)(v).
renounce her role as executrix in favour of an agreed independent party. Andrew proposed that Mr Reeve be appointed by consent of all parties.
[15] On 13 September 2021, Rice Craig indicated that they would await receipt of Kurt’s position, upon which Andrew’s proposed settlement offer was conditional.
[16] On 27 September 2021, Kurt’s solicitors (K3 Legal) wrote to Rice Craig indicating that it would benefit all parties if an independent executor was appointed.
[17] Counsel for Andrew says that on or about 28 September 2021, Maria applied without notice for the order nisi, thereby indicating that she had no intention of engaging in settlement discussions.
[18] On 22 October 2021, Rice Craig declined the offer to agree to an independent executor noting that it was the deceased’s intention to appoint Maria as executrix and there were no grounds for her removal.
[19] A further letter dated 29 March 2022 was sent from counsel for both Andrew and Kurt indicating that both respondents would be filing applications for the removal of Maria as executrix, and that both considered she was “hopelessly conflicted.” The letter went on to state:
All parties will carry the burden of the legal fees in these proceedings unless their costs are paid out of the Estate. It is also noted that Ms Alford-Norager in her capacity as executrix is exposed to a costs award being made against her if she is removed from this role and her defence to this claim was found to be unreasonable.
[20] Counsel for Maria refers to Nandro Homes Ltd v Datt6 and submits that the offer is not a Calderbank offer because it did not offer to settle the proceeding.
[21] Ms Chubb’s 10 September 2021 letter, on behalf of Andrew, contained an offer to withdraw the caveat in return for an independent executor being appointed. That was an offer to resolve the application for an order nisi. Andrew offered to withdraw the caveat thereby removing the need for an application for an order nisi. The offer
6 Nandro Homes Ltd v Datt HC Auckland CIV-2008-404-006676, 13 July 2009 at [13].
was rejected on the basis that the deceased intended that Maria be appointed as executrix and there were no grounds to justify her removal.
[22] Maria then says that she was entitled to oppose the application in circumstances where the Court had issued a minute stating:7
[3] I note that one of the concerns the respondents raise is that Ms Norager has a conflict of interest between her role as executor and beneficiary. The usual way of managing this not uncommon situation is for the individual to be separately represented in each capacity. Ms Norager has separate legal representation in her capacities as executor and as beneficiary.
[23] I accept that the estate and Maria had a reasonable basis for rejecting the offers and opposing the application in circumstances where there was separate legal representation for the estate and the beneficiary. There was also no misconduct on the part of Maria. The Trust and the company however, continued to be represented by the same law firm as the estate. The above minute did not consider the issue of Maria’s role as director of the company, or as trustee of the Trust, which owed money to the estate. Those positions also gave rise to conflicts of interest such that the conflicts were not restricted to Maria’s roles only as executrix and as beneficiary.
[24]I do not consider that an uplift in costs is justified.
Should costs be paid by the estate, by Maria, or both?
[25] Andrew seeks costs against Maria personally. Kurt seeks costs against the estate and Maria jointly, as Maria opposed the application in both capacities.
[26] I consider that the costs should be paid by the estate. There was no misconduct on the part of Maria and it was not unreasonable for her to oppose the application in circumstances where the deceased had nominated her as the executor and she had separate legal representation as executrix and beneficiary under the will.
[27]Accordingly, I order that costs are payable on a 2B basis by the estate.
7 Norager v Norager HC Auckland CIV-2022-404-000316, 10 June 2022 (Minute of Associate Judge Gardiner).
Result
[28]I order that the estate:
(a)pay Andrew’s costs of $8,883.30 (including disbursements); and
(b)pay Kurt’s costs of $7,170.00.
[29] Neither party has fully succeeded in its arguments in relation to costs, and therefore I do not propose making any order for costs in relation to the submissions I have received on these applications for costs.
Tahana J
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