Prager-Machol v Michell and Stuhlmann as Executors and Trustees of the Estate of Angela Leggett HC Auckland CIV 2010-404-917

[2010] NZHC 1526

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2010-404-000917

BETWEEN  GIUSEPPINA PRAGER-MACHOL Plaintiff/Respondent

ANDSUSAN MICHELL AND ROSS RICHARD STUHLMANN AS EXECUTORS AND TRUSTEES OF THE ESTATE OF ANGELA LEGGETT Defendants/Applicants

Hearing:         5 August 2010

Appearances: S A Grant/B R Saldanha for the Plaintiff/Respondent

K F Gould for the Defendants/Applicants

Judgment:      6 August 2010

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on

06.08.10 at 5:00pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors/Counsel:
R Stuhlmann, Bruce Scott Stevens – [email protected]
K Gould, Barrister, Auckland – [email protected]

B Hopkins, Auckland –  [email protected]

S Grant, Barrister, Auckland – [email protected]

GIUSEPPINA PRAGER-MACHOL V SUSAN MICHELL AND ROSS RICHARD STUHLMANN AS EXECUTORS AND TRUSTEES OF THE ESTATE OF ANGELA LEGGETT HC AK CIV 2010-404-000917

6 August 2010

[1]      This hearing concerns the defendants’ application for security for costs.

[2]      The plaintiff is 87 years of age.  She has filed a Testamentary Promises claim in the estate of her sister Angela who died on 10 July 2009.  The plaintiff is a United Kingdom resident.   The deceased left her estate as to two-thirds to a nephew and niece and the balance, to other relatives.   The estate includes a house valued at

$420,000 together with some jewellery and effects.

[3]      In November 2009 the plaintiff sold her house for £168,000.  The bulk of the proceeds have been given to her son and daughter equally.   Gifts have also been provided to her seven grandchildren.  £30,000 was provided for a conversion to her daughter’s home to enable the plaintiff to live there.

[4]      The statement of claim asserts the provisions of services in exchange for which the deceased promised at least 50 per cent of her estate to her.  Those services included:

(a)Between 1965 and 1973 the plaintiff relinquished to her brother her share in family land owned in Yugoslavia, at the request of the deceased, for a promise of ‘at least half’ of her sister’s estate;

(b)Between 1965 and 1973, looking after their younger brother at the request of the deceased, for a promise of ‘most of’ her sister’s estate;

(c)During the early 1980s helping the deceased to buy her house in England, and, in 1984, dealing with its sale for a promise that she would receive at least half of her estate;

(d)      The deceased living with her for 10 months prior to moving into their

England property.

[5]      The defendant executors have applied for security of costs on the grounds the plaintiff is resident out of New Zealand and because it is believed the plaintiff could not afford to pay the defendants’ costs if unsuccessful.

[6]      By a notice of opposition the plaintiff confirms:

(a)She is 87 years of age and is dependent on her family and a welfare benefit.

(b)      She intends applying for Legal Aid.

(c)       An order for security will prevent her from bringing her claim. (d)     She has good prospects of success.

[7]      By her affidavit in opposition the plaintiff provides details confirming her total  dependence  on  her  daughter  to  look  after  her.    She  attributes  her  current financial position to the work and services she performed for the deceased and the deceased’s failure to keep her promise to reward her.

[8]      It was always her intention to sell her house and to give the proceeds to her two children.  Her gift to her daughter helped to offset the costs of keeping a large house to accommodate her.  Her gift to her son enabled him to help his daughter out of a “negative equity situation”.

[9]      The plaintiff always planned and promised to distribute her funds in that way believing the deceased would include her in her will.

[10]     The plaintiff resides out of New Zealand.  Without the assistance of legal aid, or, if required to pay security, likely she will be unable to afford the cost of security, estimated by the defendants to be $35,000 (and by the plaintiff’s solicitors $25,000) for a three-day trial.

[11]     If it appears the plaintiff will be unable to pay the costs of the defendants if unsuccessful, the Court needs consider whether to exercise its discretion to order security.

[12]     The   Court   approaches   these   questions   on   a   case   by   case   basis. Considerations of the convenience and the cost of enforcing a costs judgment outside

of New Zealand is a primary consideration.  The Court needs balance the plaintiff’s interests in pursuing her claim with the defendants’ interests in not being drawn into unjustified litigation.  In this case primary consideration needs to be given to:

(a)     The plaintiff’s present impecuniosity. (b)          Her intention to apply for legal aid.

(c)     An assessment of the merits of her claim.

[13]     If the plaintiff is required to pay security then whether or not she is granted legal aid, she is unlikely to be able to continue her proceeding.  The plaintiff asserts her current financial position is because of the work and services she performed for or at the request of the deceased.

[14]     If she is to succeed with her claim the plaintiff bears an onus of establishing the rendering of services and performance of work for the deceased; the terms of the express  or  implied  promise  of  reward;  and  establishing the  connection  between services provided and the promise made.

[15]     In this case the deceased died in July 2009.   The plaintiff sold her own property in November 2009 and largely gifted the proceeds to her son and daughter. She is impecunious because of these gifts albeit that in part they were designed to provide assistance and car for her.   She retains a sum of between £20,000 and

£28,000 to meet future care costs.

[16]     Counsel have estimated that between one and three days hearing time will be required.    That  might  be optimistic for  the case that  is  not  just  about  whether promises were made and services were appropriately provided.  It is also about how a positive outcome for the plaintiff will affect the estate’s beneficiaries each of whom has been bequeathed a portion of the deceased’s estate.

[17]     It is difficult to make any real assessment of the merits of the claim but as I earlier noted the plaintiff will have to provide more than she has so far by way of evidence.

[18]     Her testamentary promises claim is not like a family protection claim which is usually an enquiry about whether or not the Will benefited a family member sufficiently in circumstances where a testor had a moral duty to provide.  Here, the plaintiff is not in that category.  It is not a foregone conclusion that in the outcome the costs of all parties will be met by the estate.

[19]     Recognition ought to be given to the fact the plaintiff is of modest means.  It should not be overlooked that she is in that situation because of her generosity to her children.  The consequences of those gifts should not be ignored in the balance of considerations.   I think something modest but nonetheless meaningful by way of security is appropriate.

Result

[20]     I fix security in the sum of $12,000 to be paid into Court to be held in an interest bearing account pending further order of the Court.

[21]     Leave is reserved to the plaintiff to apply for that order to be reviewed in the event she is granted legal aid.

[22]     Costs are to be reserved.

Associate Judge Christiansen