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Ormsby v Van Selm

Ormsby v Van Selm

Case [2016] NZHC 484 22 March 2016

Breach of Fiduciary Duty

Fiduciary Duty

Remedial

Costs

Constitutional Validity

Succession Law

Civil Litigation & Procedure

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NOTE: ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS
11B TO 11D OF THE FAMILY COURTS ACT 1980, FOR FURTHER INFORMATION, PLEASE SEE ION/RESTRICTIONS-ON-PUBLICATIONS

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2015-419-184 [2016] NZHC 484

BETWEEN
ALAN DE LISLE ORMSBY

Appellant

AND

JAKE VAN SELM First Respondent

JACQUELINE ANN VAN SELM Second Respondent

JANINE ALEXANDRA ORMSBY Third Respondent

Hearing: On the papers

Counsel:

D M O'Neill for appellant
D Mayall for second respondent
G M Spry for third respondent

Judgment:

22 March 2016

JUDGMENT OF KATZ J [Costs]

This judgment was delivered by me on 22 March 2016 at 2:00pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors: Koning Webster Lawyers, Papamoa Niemand Peebles Hoult, Hamilton Norris Ward McKinnon, Hamilton

ORMSBY v VAN SELM [2016] NZHC 484 [22 March 2016]

Introduction

[1] Alan Ormsby (“Mr Ormsby”) is the son of the late Elizabeth Ormsby (“Mrs Ormsby”), who died in 2007. In her will Mrs Ormsby left Mr Ormsby the family farm, which comprised approximately 98 per cent of her estate.

[2] The second and third respondents (“Ms Van Selm” and “Ms Ormsby” respectively) are Mrs Ormsby’s two surviving daughters. They brought a successful challenge to Mrs Ormsby’s will in the Family Court, pursuant to s 4 of the Family Protection Act 1955 (“Act”). The Family Court Judge held that the will did not provide for their proper maintenance and support and ordered that the farm be divided equally between Mr Ormsby, Ms Ormsby and Ms Van Selm.1

[3] Mr Ormsby appealed to this Court on the issue of quantum only. He did not dispute that there had been an egregious breach of moral duty on the part of Mrs Ormsby. In a decision dated 13 November 2015 (“Judgment”) I allowed Mr Ormsby’s appeal to the extent that I decreased Ms Ormsby and Ms Van Selm’s shares in the family farm from 33 per cent each to 30 per cent and 25 per cent respectively. 2 These awards were still significantly greater than those contended for by Mr Ormsby in either the Family Court or on appeal.

[4] The parties have been unable to agree costs issues following the delivery of the Judgment. Ms Ormsby and Ms Van Selm submit that the parties’ costs should be met out of the estate on a 2B scale basis, whereas Mr Ormsby submits that Ms Ormsby and Ms Van Selm should bear their own costs and also meet his costs, on a 2B scale basis.

Relevant legal principles

[5] The Court has a general discretion as to costs in all matters. Although there is no legal presumption that costs must be awarded out of the estate in family
protection cases,3 it is common for that to occur in the absence of exceptional

1      Van Selm v Van Selm [2015] NZFC 3242, [2015] NZFLR 693.
2      Ormsby v Van Selm [2015] NZHC 2822.
3      Re Lawler HC Palmerston North AP 10/02, 8 April 2003 at [87]; Re Blakey (Deceased)

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 Ormsby v Van Selm

Details

AGLC: Ormsby v Van Selm [2016] NZHC 484
Case: [2016] NZHC 484
Decision Date: 22 March 2016

CaseChat Overview and Summary

In the case of Ormsby v Van Selm, Alan Ormsby appealed a decision made by the Family Court regarding the distribution of his late mother's estate. The Family Court had found that Elizabeth Ormsby's will did not adequately provide for the maintenance and support of her two surviving daughters, Jacqueline Van Selm and Janine Ormsby. Consequently, the Family Court ordered the family farm, which comprised approximately 98% of the estate, to be divided equally among Alan Ormsby, Janine Ormsby, and Jacqueline Van Selm. Alan Ormsby appealed the decision, arguing that the award to his sisters should be reduced. The appeal was limited to the issue of quantum, and Alan Ormsby did not dispute that there had been a breach of moral duty on the part of his late mother.

The primary legal issue before the court was whether the costs of the proceedings should be paid out of the estate or borne by the respective parties. The Family Court had ordered that the costs be met out of the estate, but the parties could not agree on the matter following the appeal judgment. Jacqueline Van Selm and Janine Ormsby argued that their costs should be paid out of the estate on a 2B scale basis, while Alan Ormsby contended that they should bear their own costs and also meet his costs on a 2B scale basis.

The court considered the general discretion it has in awarding costs in all matters and the common practice of costs being paid out of the estate in family protection cases, especially when there has been a breach of moral duty by the deceased. The court also noted that although there is no legal presumption that costs must be awarded out of the estate in such cases, it is common for that to occur in the absence of exceptional circumstances. The court concluded that it was appropriate for the costs to be met out of the estate on a 2B scale basis, as sought by the respondents. The court found that the breach of moral duty by the late Elizabeth Ormsby was significant and necessitated the proceedings. The court further found that the respondents' conduct of the appeal was responsible and that their submissions were of considerable assistance in the exercise of assessing the appropriate quantum of the awards necessary to remedy Elizabeth Ormsby's breaches of moral duty.

In conclusion, the court ordered that the 2B scale costs and disbursements of the appellant and the second and third respondents be paid from the residue of the estate.

Orders