Wardill v Anderson

[2017] NZHC 306

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

CIV-2015-404-003017

[2017] NZHC 306

IN THE MATTER

of an application pursuant to section 14 of the Wills Act 2007

AND

IN THE MATTER

of the estate of Sandy Maureen Anderson, Deceased

BETWEEN

PATRICIA DIANE WARDILL AND DAVID ROBERT PASLEY

Applicants

CHRISTOPHER GRANT ANDERSON
Interested Party

JOHN RATTRAY

Interested Party

Hearing:

On the Papers

Counsel:

J H Hunter for Applicants

D A Campbell and D R Duffield for C G Anderson J M Skinner for J Rattray

Judgment:

1 March 2017

JUDGMENT NO 2 OF PALMER J

(Costs)

This judgment is delivered by me on 1 March 2017 at 2.00 pm pursuant to r 11.5 of the High Court Rules.

.....................................................

Registrar / Deputy Registrar

Solicitors & Counsel:

J H Hunter, Barrister, Auckland Wardill Pasley Law, Auckland

WARDILL & PASLEY [2017] NZHC 306 [1 March 2017]

Kensington Swan, Auckland Skinners Law, Auckland

Applications

[1]    Ms Wardill and Mr Pasley applied for a final version of an unsigned will to be declared valid under s 14 of the Wills Act 2007. They then abided the decision of the court. Mr Anderson supported the application. Mr Rattray opposed it. In my judgment of 16 December 2016 I declared the will valid.1 Ms Wardill and Mr Pasley became the executors of the estate. Mr Anderson and Mr Rattray are equal beneficiaries under the will.

[2]In the last paragraph of the judgment I stated:2

I am inclined to agree with the request from Ms Wardill and Mr Pasley that costs be met from the estate. If that cannot be agreed between the parties I grant leave for submissions to be filed within 20 working days of this judgment.

[3]    Counsel for Ms Wardill and Mr Pasley, and for Mr Anderson, filed a joint memorandum, and two supporting affidavits, regarding costs on 3 February 2017, when the 20 working day deadline expired. Counsel for Mr Rattray filed a memorandum in response on 21 February 2017, a day after counsel for Mr Anderson invited me to determine the matter.

Law

[4]    Davidson J in Harris v Taylor has recently addressed the question of costs in s 14 cases:3

[16] The authors of Law of Costs identify three general rules to strike the appropriate balance between ensuring that "doubtful wills should not pass easily to proof by reason of the cost of opposing them" but also ensuring that parties will "not be tempted into fruitless litigation by the knowledge that the costs will be defrayed by the estate of the testator".⁴ These are:⁵

1      Wardill & Anor v Anderson & Anor [2016] NZHC 3114.

2 At [53].

3      Harris v Taylor [2016] NZHC 483. Relied upon by Gendall J in Winterburn v Wilson [2016] NZHC 2687 at [7].

4      G E Dal Pont Law of Costs (3rd ed, Lexis Nexis, Australia, 2013) at [10.17] citing Mitchell v Gard

(1863) 3 Sw & Tr 275 at 279; 164 ER 1280 at 1282.

5      At [10.17] (footnotes omitted).

1.Where the opposition to a will was made without proper inquiry into the facts, or without reasonable ground so as to make it unjustifiable opposition, a costs order lies against the party opposing the will.

2.Where the testator has, by his or her own conduct, in effect caused the litigation, the costs of the unsuccessful party are to be paid out of the testator's estate.

3.If the facts reveal that neither the testator, the executor or persons interested in the residue have been to blame, but that the opponents of the will have taken proper steps to acquaint themselves of the facts and have been led reasonably to the bona fide belief that good ground existed for impeaching the will, either no order as to costs will be made or costs will be allowed, whether wholly or partly, out of the estate.

[17]      In the New Zealand context, Stringer J, in In re Paterson (dec 'd), enunciated principles, applied by the Court in Squires v Nijsse, relating to matters of probate where the costs of an unsuccessful party may be ordered to be borne by the estate itself:⁶

(i.)If the litigation originates in the fault of the testator - e.g., by   the state in which he left his testamentary writings, or by his eccentric or irrational habits and mode of life – or of those interested in the residue, the costs may properly be paid out of the estate.

(ii.) If there be sufficient and reasonable ground, looking to the knowledge and means of knowledge of the opposing party, to question either the execution of the will or the capacity of the testator, or to put forward a charge of undue influence or fraud, the losing party may properly be relieved from the costs of his successful opponent.

(iii.) Unless the circumstances of the case are such as to bring it  within one of the foregoing exceptions, the general rule that costs should follow the event ought to prevail ...

[18]     These principles emphasise the High Court's discretion to award costs to achieve justice between the parties. Although costs may be ordered to be paid out of the estate, judges have made it clear that this is not always the case, Scrutton LJ stating, "I should be reluctant to do anything to create the idea that unsuccessful litigants might get their costs out of the estate, without making a very strong case on facts".⁷ To that end, it must be remembered that one of the general principles of costs is that they follow the event, and this is not to be departed from solely on the basis that the proceedings involved a deceased's estate.⁸

[5]    Davidson J concluded “[t]he Court must take account of all relevant consideration [sic] and order costs in a way to do justice to all the parties”.9 In that

6      In re Paterson (dec’d) [1924] NZLR 441 (SC).

7      Wild v Plant [1926] P 139 at 152.

8      High Court Rules, r 14.2(a).

9      Harris v Taylor, above n 3, at [31].

case he found that the conduct of the parties disentitled either of them to costs and ordered costs to lie where they fell.

[6]    Rule 14.6(3)(b)(ii) of the High Court Rules 2016 provides “[t]he court may order a party to pay increased costs if the party opposing costs has contributed unnecessarily to the time or expense of the proceeding or step in it by taking or pursuing an unnecessary step or an argument that lacks merit”. Rule 14.6(4)(a) entitles a court to order indemnity costs if “the party has acted vexatiously, frivolously, improperly, or unnecessarily in commencing, continuing, or defending a proceeding or a step in a proceeding”.

Submissions

[7]Ms Wardill, Mr Pasley and Mr Anderson submit:

(a)The costs and disbursements of Ms Wardill and Mr Pasley which would have arisen from an unopposed application for validation, totalling

$9,015, should be met from the estate on an indemnity basis.

(b)The remaining costs and disbursements of Ms Wardill and Mr Pasley, totalling $12,811, should be met by Mr Rattray, personally, on a full indemnity basis or, alternatively, on a 2B basis.

(c)The costs of Mr Anderson, totalling $85,416.13, should be met, on a full indemnity basis, by Mr Rattray personally or, alternatively, out of the estate.

[8]    Ms Wardill and Mr Pasley submit Ms Wardill brought the application out of a sense of professional and moral duty and the costs of bringing such an application have routinely been paid out of the deceased’s estate on an indemnity basis. But they also submit that the additional costs caused by Mr Rattray’s unreasonable opposition to the application ought to be paid by Mr Rattray on a full indemnity basis. They characterise a finding of inconsistency between Mr Rattray’s sworn affidavit and his evidence under cross-examination as effectively a finding Mr Rattray was untruthful.

They say that, had Mr Rattray been honest from the outset, he would have had no reasonable basis to oppose the application.

[9]    Mr Rattray does not challenge Ms Wardill’s and Mr Pasley’s costs of $9,015, which would have arisen from an unopposed application for validation, being met from the estate on an indemnity basis. He does challenge Ms Wardill’s, Mr Pasley’s and Mr Anderson’s submission regarding the rest of the costs. Instead he submits, Ms Wardill and Mr Pasley should receive costs from the estate on a 2B basis for sealing the judgment and Mr Anderson should be awarded costs from the estate on a 2B basis, totalling $11,819. By comparison, Mr Rattray’s costs were $26,357. He doesn’t make any proposal that they be met by anyone else.

[10]   Mr Skinner, for Mr Rattray, submits Mr Rattray’s opposition was on reasonable grounds and it was appropriate for a court to decide the matter by testing the evidence. He submits the deceased, Ms Anderson, must bear some responsibility for not getting the draft will signed and thus causing the litigation. He says Mr Rattray should not be punished for being misled into thinking Ms Anderson wanted the signed will to be her last will. He opposes indemnity costs, rather than scale costs, because Ms Wardill did not take all reasonable steps to get the will signed. Neither, he says, did Mr Anderson need to engage in the litigation. Finally, Mr Skinner says what Mr Rattray knew about the draft will was irrelevant because he was firm that Ms Anderson intended her last signed will to be her last will. The case did not turn on the evidential issue identified.

Costs here

[11]   In the judgment, I accepted Mr Rattray’s evidence under cross-examination, that he did not know about the draft will until six weeks after her death, rather than his affidavit evidence, explaining what Ms Anderson had told him about the draft will.10 The fact he offered inconsistent affidavit evidence does not mean he was obligated to accept the draft will should be validated without testing that in court. I do not consider it was unjustifiable or unreasonable for Mr Rattray to oppose the application, although his conduct in doing so, by providing an initial alternative explanation, was unjustifiable or unreasonable.

10     Wardill & Anor v Anderson & Anor, above n 1, at [48].

[12]   I also agree with Mr Rattray’s submission that Ms Anderson’s conduct was a substantial cause of the litigation. I found Ms Anderson’s wish to avoid conflict was at the root of her failure to attend to the formalities that would have made the draft will valid.11

[13]   I made no finding that Ms Wardill could have made more effort to get the draft will signed. There was no evidential foundation to support me doing so.

[14]   Mr Anderson was entitled to support the validation application. It was in his interests to do so. The applicants were abiding the decision of the court.

Result

[15]On this basis, I order:

(a)The costs of Ms Wardill and Mr Pasley, totalling $21,826, should be met from the estate on an indemnity basis because they were acting responsibly in making the application which was necessary because of the testator’s conduct.

(b)The costs of Mr Anderson, totalling $85,416.13, should be met from the estate on an indemnity basis because he was entitled to support the application. Because Mr Rattray was entitled to oppose the application I do not order Mr Anderson’s costs be met by Mr Rattray.

(c)For the avoidance of doubt, the costs of Mr Rattray, totalling $26,357, should lie where they fall, consistent with his submissions, because of his conduct in providing an alternative explanation of Ms Anderson’s testamentary intentions that he contradicted under cross-examination.

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Palmer J

11 At [50].