O'Neill v O'Neill - [2021] NZHC 450

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2019-419-000062

[2021] NZHC 450

IN THE MATTER of the estate of LARRY MICHAEL O’NEILL

UNDER

Part 27 of Rule 27.6 of the High Court Rules 2016

BETWEEN

JUDITH ANNE O’NEILL

Plaintiff

AND

DAVID MICHAEL O’NEILL

Defendant

CIV-2020-419-000126

IN THE MATTER

of an application under the Family Protection Act 1995 and an application

under Part 18 of the High Court Rules 2016

BETWEEN

DAVID MICHAEL O’NEILL, MARTIN TIMOTHY O’NEILL and PHILIPPA SUSAN DENNIS

Applicants

AND

JUDITH ANNE O’NEILL

Respondent

Hearing: On the papers

Judgment:

10 March 2021

JUDGMENT OF DOWNS J (Costs)

This judgment was delivered by me on Wednesday, 10 March 2021 at 11 am pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

O’NEILL v O’NEILL [2021] NZHC 450 [10 March 2021]

[1] Larry O’Neill died 15 August 2016, aged 84. Larry had three adult children from his first marriage: David, Martin and Phillipa.1 In 1979, Larry commenced a relationship with Judith.2 They married in 1999. Their relationship endured until Larry’s death.

[2] Larry made wills in 2002, 2007 and 2012. The children learned of the 2007 and 2012 wills after Larry’s death. They said Larry lacked testamentary capacity when he made the 2012 will, and both the 2007 and 2012 wills were a product of Judith’s undue influence. Judith said Larry was mentally alert until his death and freely chose to distribute his assets as he did. The children said even if this was correct, Larry breached his moral duty to provide for them and advanced a claim under the Family Protection Act 1955. Judith said Larry had good reasons for doing what he did.

[3] I delivered judgment 13 November 2020.3 I found Judith had established Larry’s 2012 will was made with testamentary capacity. I also found the children had not established the 2007 and 2012 wills were the product of undue influence, or their claim under the Family Protection Act.

[4] I noted Judith would normally be entitled to costs, but that she was legally aided. I encouraged agreement about costs. That encouragement has not borne fruit.

[5] Subject to the legal aid issue, Judith seeks indemnity costs of $100,000 or increased costs of $69,369.75, a 50 per cent uplift on scale. Costs would be $46,246.50 were they 2B. Judith’s actual, legal aid costs were $46,773.29.

[6] Rule 14.6(4) of the High Court Rules 2016 identifies when indemnity costs may be awarded. Paragraph (a) signals the high threshold envisaged by the rules. The offending party must have acted “vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing or defending a proceeding or a step in the

1      The defendants (and applicants).
2      The plaintiff (and respondent).
3      O’Neill v O’Neill [2020] NZHC 2988.

proceeding”. The Court of Appeal has said indemnity costs may be ordered where the party “has behaved either badly or very unreasonably”.4

[7] On behalf of Judith, Mr Dale QC argues this threshold is…

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.

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Details

Case: [2021] NZHC 450
Decision Date: 10 March 2021

CaseChat Overview and Summary

The case of O’Neill v O’Neill involves the estate of Larry O’Neill, who passed away in 2016. His widow, Judith Anne O’Neill, is the plaintiff, and his children from his first marriage, David Michael O’Neill, Martin Timothy O’Neill, and Philippa Susan Dennis, are the defendants. The children contested Larry’s wills made in 2007 and 2012, claiming that Larry lacked testamentary capacity and that Judith exercised undue influence over him. They also claimed that Larry breached his moral duty to provide for them under the Family Protection Act 1995. Judith argued that Larry had testamentary capacity and that the wills were valid.

The court had to decide whether the children’s claims about Larry’s capacity and undue influence were valid, and whether Larry breached his moral duty under the Family Protection Act. The court also had to determine the appropriate costs to be awarded to the parties, given Judith’s legal aid status.

The court found that Judith had established that Larry had testamentary capacity when he made his 2012 will, and the children had not proven that the 2007 and 2012 wills were the result of undue influence. The court also found that the children had not proven that Larry breached his moral duty to provide for them. The court noted that Judith would normally be entitled to costs, but she was legally aided. The court encouraged the parties to agree on costs, but they did not. Judith sought indemnity costs of $100,000 or increased costs of $69,369.75, a 50 per cent uplift on scale. Judith’s actual legal aid costs were $46,773.29.

The court ruled that indemnity costs could only be awarded if the offending party acted vexatiously, frivolously, improperly, or unnecessarily. The court found that the children’s claims were not frivolous or vexatious, as they had some evidence to support them. The court also ruled that increased costs could only be awarded if the party failed to accept a reasonable offer of settlement, and if this failure contributed materially to the costs. The court found that the children failed to accept Judith’s offer of 40 per cent of the estate, but this did not contribute materially to the costs. The court awarded Judith her actual legal aid costs of $46,773.29, as a costs award should not exceed the costs incurred by the party claiming costs.

Orders