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Pratley v Courteney

Pratley v Courteney

Case [2018] NZCA 436 17 October 2018

Civil Litigation & Procedure

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IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA40/2018
[2018] NZCA 436

BETWEEN	LANCE HOWARD PRATLEY Appellant
AND	STEVEN COURTENEY First Respondent
AND	KLAUDIA ARIANE COURTENEY Second Respondent

Hearing:	1 October 2018
Court:	Gilbert, S France and Dunningham JJ
Counsel:	R J B Fowler QC and G F Kelly for Appellant J M Morrison for Respondents
Judgment:	17 October 2018 at 3 pm

JUDGMENT OF THE COURT

AThe appeal is allowed.
BThe judgment entered in the High Court ([2017] NZHC 3285) is set aside.
CThe appellant’s reasonable costs and expenses incurred in his capacity as sole executor and trustee of the estate of William Ronald Courteney in defending the claim brought against the estate by the first respondent in the District Court (CIV‑2012‑035‑52) are to be met from the assets of the estate.
DThe first respondent must pay the appellant costs for a standard appeal on a band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Gilbert J)

The issue on this appeal is whether an independent professional executor and trustee should be indemnified from estate assets for costs incurred in unsuccessfully defending a claim against the estate. The High Court found that although the executor and trustee acted with the best of motives, believing he was discharging his professional obligations, he should bear the costs personally because it was not necessary for him to defend the claim.[1] For the reasons set out below, we have come to a different view.

Background

[1]Courteney v Pratley [2017] NZHC 3285 (2017) 4 NZTR 27-030 at [39]–[40] [High Court judgment].

William Ronald Courteney (Ron) died on 17 July 2011 leaving the whole of his estate to his wife Joan Ayleen Courteney (Joan) who was the sole executor under his will. Joan died in Munich nearly a year later, on 21 May 2012. She left the whole of her estate, including assets in New Zealand, Jersey and Germany, to one of their two middle-aged sons, Stuart Courteney (Stuart), who was also living in Munich at that time. Joan appointed Stuart as the sole executor and trustee of her estate. Stuart therefore became the sole executor of both estates following Joan’s death.[2]
[2]Administration Act 1969, s 13.
In 2013 the couple’s other son, Steven Courteney (Steven), the first respondent, brought a claim in the High Court under the Family Protection Act 1955 seeking an order that proper provision be made for his maintenance and support from Joan’s estate.[3] Steven’s adult daughter and the only grandchild, Klaudia Courteney (Klaudia), the second respondent, joined the Family Protection proceedings as a second plaintiff.
[3]Courteney v Courteney HC Wellington, CIV-2013-485-5912 [Family Protection proceedings].
Steven experienced difficulties obtaining adequate disclosure from Stuart as to the overseas assets of the estate. To overcome this problem, Steven applied to the High Court for an order removing Stuart as the sole executor and trustee and replacing him with an independent solicitor, Lance Pratley, the appellant. The order was duly…

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 Pratley v Courteney

Details

AGLC: Pratley v Courteney [2018] NZCA 436
Case: [2018] NZCA 436
Decision Date: 17 October 2018 at 3 pm

CaseChat Overview and Summary

In the Court of Appeal of New Zealand, the case of Pratley v Courteney involved a dispute between Lance Howard Pratley, the appellant, and Steven Courteney, the first respondent, over the costs incurred by Pratley in defending a claim against the estate of William Ronald Courteney. The central issue in the appeal was whether an independent professional executor and trustee should be indemnified from estate assets for costs incurred in unsuccessfully defending a claim against the estate. The High Court had ruled that Pratley should bear the costs personally as it was not necessary for him to defend the claim.

The Court of Appeal reviewed the High Court's decision and found that Pratley should be indemnified from estate assets for the costs he incurred in defending the claim. The Court held that Steven's claim against the estate in the District Court fell into the third category of disputes involving trustees, which is a third party dispute, and not a beneficiaries dispute as the High Court had found. Consequently, the Court concluded that Pratley, as the executor and trustee, had a duty to protect the estate assets for the benefit of all beneficiaries and to represent the estate in a third party dispute. The Court also found that Pratley acted reasonably in continuing the defence of the claim in accordance with the legal advice he received.

The Court of Appeal allowed the appeal, set aside the judgment of the High Court, and ordered that Pratley's reasonable costs and expenses incurred in his capacity as sole executor and trustee of the estate of William Ronald Courteney in defending the claim brought against the estate by Steven Courteney in the District Court are to be met from the assets of the estate. Furthermore, Steven Courteney was ordered to pay Pratley costs for a standard appeal on a band A basis and usual disbursements.

Orders