Van Goch v Van Goch
[2019] NZHC 2978
•14 November 2019
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2017-404-001946
[2019] NZHC 2978
BETWEEN SANDRA PETRONELLA VAN GOCH
Plaintiff
AND
JOHANNES MARINUS VAN GOCH as
executor of the estate of Maria Martina van Goch
First Defendant
AND
HELEN WILHELMINA CATHERINA VAN
GOCH as executor of the estate of Maria Martina van Goch
Second Defendant
AND
SANDRA PETRONELLA VAN GOCH as
executor of the estate of Maria Martina van Goch
Third Defendant
AND
CHARLES GRAHAM MILLER
Fourth Defendant
Hearing: (On the papers) Counsel:
S Grant and S Laing for the Plaintiff and Third Defendant T Stapleton QC for the First and Second Defendant
B Cuff and R Thompson for the Fourth Defendant
Judgment:
14 November 2019
[COSTS] JUDGMENT OF MOORE J
This judgment was delivered by me on 14 November 2019 at 3:00 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/ Deputy Registrar Date:
VAN GOCH v VAN GOCH & ORS [2019] NZHC 2978 [14 November 2019]
Introduction
[1] This matter concerns the estate of Maria van Goch (“Maria”). She died in September 2016. The plaintiff, Sandra van Goch (“Sandra”), the first defendant Johannes van Goch (“John”), and the second defendant Helen van Goch (“Helen”) are the three children of Maria, and the executors of her estate.1
[2] In the substantive proceeding, Sandra applied for orders under the Family Protection Act 1955, the Law Reform (Testamentary Promises) Act 1949, and the Wills Act 2007. These relate to her allegation that, at the time Maria signed her Will in 2012, she was in cognitive decline and physically impaired, such that the Will does not reflect Maria’s testamentary intentions. In reply, John and Helen allege Sandra brought these proceedings only after having refused to co-operate with her fellow executors and having made unreasonable demands of her siblings and the estate solicitor. The solicitor, Mr Charles Miller, is the fourth defendant. He, together with John and Sandra, oppose Sandra’s claim.
[3] The present judgment determines the question of costs on several interlocutory applications brought by the van Goch siblings, which I determined in my judgment of 6 September 2018.2
Background
[4]In summary, the applications were:
(a)John and Helen’s application to remove Sandra as an estate executrix on the basis that, in issuing the substantive proceeding, she placed herself in a disqualifying position of conflict of interest and/or that Sandra’s removal is justified by events since Maria’s death;
(b)Sandra’s application for an order removing Mr Miller as solicitor on two bases; first, that he will be a critical witness in Sandra’s proceeding
1 Sandra is also third defendant in the proceeding, in her capacity as executor.
2 Van Goch v Van Goch [2018] NZHC 2335.
and, secondly, that he ought to have ceased acting when the executors were in dispute and could not give him unanimous instructions;
(c)Sandra’s application for an order directing Mr Murray McKechnie, the barrister who represented the executors in the substantive proceeding, to cease acting for John and Helen on the grounds he had previously acted for all three executors; and
(d)Sandra’s further application for an order requiring Mr Miller to supply a copy of the estate file to her.
[5] As recorded in that judgment,3 Ms Grant, for Sandra, submitted that if I considered Sandra should be removed the appropriate order was one replacing all executors with an independent executor. Mr Stapleton QC, for John and Helen, submitted that I did not have jurisdiction to make such an order and that procedural fairness required me to hear Sandra on a separate formal application.
[6] Ultimately, I found that the Court’s discretion under s 21 of the Administration Act 1969 was sufficiently broad to make such an order.4 I called for, and received, further submissions as to who should be appointed in the event I was to remove all executors.
[7] Having considered those submissions, I determined that while none of the siblings’ positions was entirely unreasonable, the extent of infighting between them raised legitimate concerns as to how the estate could ever be properly administered. It had resulted in delays. I determined this was caused by Sandra’s dissatisfaction and her interest in pursuing action against the estate, rendering her removal inevitable.5
[8] Sandra’s removal alone was, nonetheless, unlikely to resolve the issues for the administration of the estate, given the evidence regarding John and Helen’s conduct in making unilateral decisions concerning the estate and wrongly excluding Sandra from decision-making. This had caused them to lose the appearance of impartiality in
3 At [43]-[46].
4 At [57]-[66].
5 At [52]-[56].
dealing fairly with the interests of all beneficiaries, which would inevitably cause further mistrust and suspicion between the siblings and further impair the administration of the estate.6
[9] The appropriate course of action, having regard to the need to protect the interests of all beneficiaries and ensure the efficient and timely completion of administration, was thus to remove all three executors and replace them with a qualified and impartial independent executor.7 Accordingly, I ordered the Registrar to liaise with the President of the Waikato-Bay of Plenty branch of the New Zealand Law Society to request they nominate a suitable practitioner, with the necessary skills and experience,8 to act as sole executor of the estate.
[10] I recognised that such a practitioner might well regard Mr Miller’s services as estate solicitor an unnecessary burden on the estate or abide the Court’s decision as to Sandra’s substantive claims. In either case, the application to remove Mr Miller would become otiose. I thus reserved my decision on that aspect of the applications until a new executor was appointed and those matters determined.9
[11] As it is, on 28 November 2018, Mr Matthew Peploe of the law firm Harkness Henry informed the Court of his willingness to accept that appointment. He indicated that the firm would be appointed as estate solicitors, and that he would abide the decision of the Court in respect of Sandra’s substantive proceedings.
[12] As for the application to preclude Mr McKechnie from continuing to act, I considered there was no reason to question Mr McKechnie’s commitment to abide by his overriding duty to the Court. He had made an affidavit deposing to his relevant correspondence following his engagement. Absent more than mere speculation that there remained other relevant evidence, I was satisfied it was appropriate to proceed
6 At [63], citing Hinde v Cranwell [2012] NZHC 63 at [28(c)]; Nawisielski v Nawisielski [2014] NZHC 1547 at [19]; and Irvine v Public Trustee [1989] 1 NZLR 67 (CA).
7 At [63], citing Crick v Wallace [2015] NZHC 2260.
8 See [64].
9 At [67]-[69].
on the basis that what Mr McKechnie had sworn to was true and complete, and the high threshold for debarring counsel was not met.10
[13] On the remaining application, given that I had removed Sandra as an executor, she was no longer entitled as of right to the estate file. In any event, as I noted,11 she would obtain access to the parts of the file material to her claim through discovery on the substantive proceeding.
The parties’ positions
[14] Mr Stapleton applies for an award of costs (on a 2B basis) and disbursements against Sandra, as the unsuccessful party, in respect of John and Helen’s application for an order removing Sandra as an executrix and Mr McKechnie as counsel. It is submitted costs should ordinarily follow the event,12 and there are no special reasons why costs should not now be fixed on the interlocutory applications.13
[15] John and Helen also seek a 50 per cent uplift of costs, claiming the application ought not to have been made in the first place and certainly not pursued to a defended hearing.
[16] Ms Grant submits that John and Helen cannot claim victory in relation to the application to remove Sandra. They sought Sandra’s removal as executrix, with the goal of becoming sole executors. Instead, all executors were removed. Sandra’s position was to resist her removal while suggesting, in the alternative, that all three executors should be removed and replaced with an independent executor. Ms Grant submits that is the basis on which I disposed of the applications. Thus, Ms Grant submits that Sandra was the successful party and should be entitled to an award of costs.
[17] In the alternative, Ms Grant submits the parties’ costs should be met from the estate, which she says is sizeable enough to meet such an award. The resolution of the
10 At [70]-[76], citing Accent Management Ltd v Commissioner of Inland Revenue [2013] NZCA 155, [2013] 3 NZLR 374 at [32]-[33].
11 At [77]-[78].
12 High Court Rules 2016, r 14.2(a).
13 Rule 14.8(1)(a).
applications will allow, she says, for the efficient resolution of the parties’ conflicts and the best promotion of the beneficiaries’ interests. Alternatively, costs should lie where they fall, or be reserved pending “final wash up” of the estate. Ms Grant cites several authorities she says support either of these approaches where all executors were removed and an independent executor appointed.14
[18] As for the application to remove Mr McKechnie, Ms Grant submits that Sandra was reasonable in bringing and maintaining that application, given that Mr Miller was acting for the executors, had briefed Mr McKechnie, and that the estate had been charged for Mr McKechnie’s services. These points, counsel submits, provided a reasonable basis for Sandra’s view that Mr McKechnie was acting for the executors on Mr Miller’s instructions. It is entirely proper for a party to object to a lawyer acting where there is an appearance of conflict. A 50 per cent uplift is therefore not justified on a conduct basis.
[19] Alternatively, Ms Grant submits the costs claimed by John and Helen in respect of this application are disproportionate to the time occupied and importance of this issue at the hearing.
[20] In reply, Mr Stapleton submits that Sandra’s claim she was the successful party on the application to remove her could only have been sustained if she had either consented to the application or not opposed it, which would have significantly expedited the hearing of the application. This is also said to preclude costs lying where they fall, given the time and expense that John and Helen were put to in ensuring the Court could properly supervise the estate. As for the application to remove Mr McKechnie, Mr Stapleton submits the claims made in respect of that item are appropriately modest.
14 Citing J v T [2017] NZHC 3089; Osborne v Wilson HC Auckland CIV-2005-404-1252, 8 September 2005; Guest v Warner [2018] NZHC 666 at [42]; Guest v Warner (Costs) [2018] NZHC 1150 at [4]. In his submissions, Mr Stapleton submitted that none of these authorities assist Sandra.
Discussion
[21] In J v T, the facts of which case I have noted are similar to those in this proceeding,15 the parties were agreed that, if the Public Trust were appointed to administer the estate (as transpired), reasonable costs on the applications were to be paid out of the estate.16 In contrast, there is nothing approaching such an agreement here.
[22] However, the parties are agreed that the maxim “the loser, and only the loser, pays”,17 as an expression of the policy of r 14.2(a) of the High Court Rules 2016, applies. Their dispute is who won and who lost.
[23] The underlying principle that success is to be evaluated from who has benefitted in the bringing of proceedings, is relevant. The comment that “success on more limited terms is still success”18 points in the same direction. It suggests that the correct focus is on who benefitted overall; not on the extent to which that success was diminished by the loser’s efforts.
[24] In the present case no party got what they wanted. John and Helen came to Court seeking to oust Sandra as an executrix to enable them to manage the estate themselves. Sandra resisted her removal. Her response, namely that all the executors should be removed, was advanced as an alternative proposition in the event I considered her removal justified. As it was, I determined her removal was “all but inevitable”, given that she was the operating cause of the delays which had frustrated the operation of the estate.19 Her removal was what John and Helen sought.
[25] Equally, I am conscious that John and Helen resisted their removal by pursuing an argument that the Court’s jurisdiction under s 21 was insufficient. As noted, I considered their removal possible. I also considered their removal was necessary. The acrimony between the siblings meant John and Helen had lost the appearance of impartiality. Their continued involvement would likely operate as an impediment to
15 At [54], citing J v T, above n 14 at [19].
16 At [22].
17 Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523 at [19].
18 Weaver v Auckland Council [2017] NZCA 330, (2017) 24 PRNZ 379 at [26].
19 At [56].
the efficient completion of administration.20 This finding was based, in part, on their improper exclusion of Sandra from the administration of the estate.21
[26] The outcome of the application for Sandra’s removal was, as I said, “the best way forward” having regard to the Court’s imperative to expedite the administration of the estate.22 It reflected, in practical terms, a compromise between the parties’ preferred outcomes. All parties, as beneficiaries, have benefitted from the expeditious administration of the estate. Taking that broad view of the proceedings and the outcome, I consider costs should lie where they fall in relation to the application to remove Sandra as an executrix.
[27] But the position is different in relation to the application to debar Mr McKechnie as counsel. After the filing of Mr McKechnie’s affidavit, the basis for the application was removed. To that extent, John and Helen were entirely successful. Costs should follow the event.
[28] However, no uplift is warranted. I am not persuaded that Sandra lacked any reasonable basis initiating the application even if those concerns were ultimately exposed as unfounded.23 I accept that, following the filing of Mr McKechnie’s affidavit on 15 February 2018, it is arguable that counsel for Sandra may have reconsidered the viability of pursuing the relevant application. Ultimately however, while John and Helen were put to the expense and costs of defending this application, it did not occupy much time at the hearing, and was not a significant focus of the proceeding.24 In those circumstances, and given it is not clear that Sandra acted wholly unreasonably in bringing or continuing this application, I do not exercise my discretion under r 14.6 of the High Court Rules 2016 to uplift costs.
20 At [63].
21 At [62].
22 At [64].
23 See Bradbury v Westpac Banking Corp [2009] 3 NZLR 400, (2009) 19 PRNZ 385 (CA) at [27]. See also Broadspectrum (New Zealand) Ltd v Nathan [2017] NZCA 434 at [57].
24 See Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2010] NZCA 400, (2010) 24 NZTC 24,500 at [165].
Result
[29] Costs on the first and second defendants’ application to remove the plaintiff as executrix of the third defendant estate are to lie where they fall.
[30] The plaintiff is to pay the first and second defendants’ costs on the plaintiff’s application to debar counsel for the first and second defendants on a 2B basis, in the amount of $4,683.00. The plaintiff is further to pay the first and second defendants’ disbursements on that application in the amount of $394.06.25
Moore J
Solicitors:
Ms Grant, Auckland Mr Laing, Auckland
Mr Stapleton QC, Wellington
DLA Piper New Zealand, Auckland
25 As this application was not the subject of oral submissions, I have not allowed the first and second defendants’ claimed disbursements in respect of counsel’s travelling and accommodation costs in respect of that hearing.
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