Warrender v Warrender
[2013] NZHC 787
•17 April 2013
IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY
CIV-2012-463-259 [2013] NZHC 787
UNDER the Administration Act 1969
IN THE MATTER OF the estate of GEORGE ALEX WARRENDER
BETWEEN GLORIA JEAN WARRENDER Plaintiff
ANDROBERT WARRENDER First Defendant
Hearing: 14 December 2012
Counsel: L Rowe and J Woodcock for the Plaintiff
R Wallis and P Fisher for the Defendants
Judgment: 17 April 2013
JUDGMENT OF WOODHOUSE J
This judgment was delivered by me on 17 April 2013 at 11:30 a.m. pursuant to r 11.5 of the High Court Rules 1985.
Registrar/Deputy Registrar
……………………………………
Counsel:
Mr L Rowe and Ms J M Woodcock, Armstrong Barton, Solicitors, Wanganui
Mr R D Wallis, Barrister, AucklandMr P H Fisher, Clancy Fisher Oxner and Bryant, Solicitors, Putaruru
WARRENDER V WARRENDER HC ROT CIV-2012-463-259 [17 April 2013]
Cont …
ANDSHEILA LOW Second Defendant
ANDMARY DUNCAN Third Defendant
ANDMICHAEL WARRENDER Fourth Defendant
ANDPATRICIA EVA JUNOR Fifth Defendant
ANDDAVID WARRENDER Sixth Defendant
The background
[1] The plaintiff, Gloria Warrender, has applied for a grant of letters of administration of the estate of George Warrender. This is opposed by the defendants. They are siblings of Mr Warrender. One or more of the defendants will be entitled to the grant if Mrs Warrender is not entitled and in that event they will also be entitled to succeed to the estate as beneficiaries on an intestacy.
[2] Mr Warrender died in May 2010. He died intestate and without issue. Mrs Warrender was married to Mr Warrender at the date of his death. They had married in 1983. However, they had separated in 1995. In 1997 they made an agreement, in writing, to live apart, dividing their matrimonial property, and settling all claims that either might have against the other. I will refer to this as the “property agreement”.
[3] After Mr Warrender died steps were taken on behalf of the defendants for administration of the estate. Mrs Warrender was asked to sign a consent for one of Mr Warrender’s brothers to be granted letters of administration and to confirm that she did not claim any beneficial interest in the estate. Following negotiations, and after Mrs Warrender had obtained legal advice, a compromise was reached and a deed of settlement entered into between Mrs Warrender and Mr Warrender’s siblings. Mrs Warrender agreed that her entitlement as a beneficiary was to 10% of the net value of the estate, that she would not apply for letters of administration and that she would consent, if necessary, to a grant to one of the siblings. I will refer to this as the “compromise”.
[4] Mrs Warrender now contends that the compromise was ineffective to remove her entitlement under the Administration Act 1969 (the Act) to succeed on the intestacy or, in the alternative, that the compromise should be cancelled for mistake pursuant to the Contractual Mistakes Act 1977. She further contends that, notwithstanding the property agreement, she is the sole beneficiary of Mr Warrender’s estate and, as such, entitled to apply for letters of administration.
The issues and the conclusions on them
[5] It is convenient to deal with the issues in reverse order. The broad issues, and my conclusions on each of them, are as follows.
[6] Issue 1: as a matter of law, can spouses contract out of the entitlement to succeed on an intestacy provided in s 77 of the Act?
Conclusion: there are no statutory provisions to the effect that a spouse cannot contract out of the entitlement in s 77 of the Act. There are no policy reasons for concluding that there can be no contracting out. In consequence the answer is yes, a spouse can contract out of the entitlement in s 77 of the Act.
[7] Issue 2: if spouses can contract out, did Mrs Warrender do so in the property agreement?
Conclusion: there is no express provision in the property agreement relating to s 77 of the Act. However, the terms clearly indicate an intention on the part of Mrs Warrender to contract out of all rights or entitlements she might otherwise have had to property owned by Mr Warrender at the date of his death.
[8] Issue 3: is the compromise binding and effective to prevent Mrs Warrender from applying for letters of administration and to limit her entitlement to the estate to
10%?
Conclusion: the compromise is binding. Contrary to the submission for Mrs Warrender, the compromise was not a waiver of an entitlement under s 77 which would need to comply with the provisions of s 81 of the Act. In addition, there was no mistake as to the legal effect of the property agreement. It was a compromise of competing claims where there was some uncertain of outcome had the matter gone to Court.
The statutory provisions
[9] The order of priority for the right to apply for letters of administration is prescribed by r 27.35 of the High Court Rules. Sub-clause (3)(a) provides that first in priority are persons having a beneficial interest in the estate according to a further order of priority set out in sub-clause (4). In terms of sub-clause (4) Mrs Warrender would be first in priority. But this is dependent upon her having a beneficial interest in the estate in the first place, and that is determined by s 77 of the Act and the answer to issues 1 and 2.
[10] The opening words of s 77 are as follows:
77 Succession to real and personal estate on intestacy
If a person (the intestate) dies intestate as to any real or personal estate and leaves the other person or people referred to in column 1 of the following table, that estate must be distributed in the manner or held on the trusts set out in column 2 of that table opposite the reference to the other person or people:
…
Following this are the priorities for succession, with first in priority being a surviving wife, husband, or other partner, when there is no surviving child or parent.
The property agreement
[11] The property agreement records the agreement of Mr and Mrs Warrender that, notwithstanding their marriage, they would “continue to live separate and apart from each other as if they were unmarried”. There is agreement for the division and retention of various items of property and as to the treatment of debts.
[12] There are then the following provisions of particular relevance to the matters in issue:
Implementation of division
19.Gloria and George shall immediately take any steps necessary to secure to the other party the title to and the possession of property to which that party may be entitled under this agreement.
…
Compromise of rights
21.The provisions of this agreement are in full and final settlement of all or any claims or rights which either Gloria or George may have against the other, whether under the provisions of the Matrimonial Property Act 1976 or under any Act or Acts passed for or in amendment thereof or substitution therefore or under any statute or rule of the common law or equity or otherwise howsoever arising.
22.This agreement shall be binding on Gloria and George in all circumstances including: (a) bankruptcy; and (b) the taking of property in execution by creditors; and (c) separation, whether on one or more occasions; and (d) reconciliation; and (e) dissolution of marriage; and (f) the death of one or both parties.
Independent legal advice
23.By this agreement Gloria and George each acknowledge that they have had independent legal advice and each now agrees to contract out of the provisions of the Matrimonial Property Act 1976 and estops herself or himself against the other from all or any claim or demand in respect of the property of any nature whatsoever.
The compromise
[13] The compromise is recorded in a “Deed of Settlement” entered into in March
2011. The background recitals are as follows:
BACKGROUND:
A. George Alex Warrender formerly of 85 Tirau Street, Putaruru (“the Deceased”) died on 9 May 2010. The parties understand the Deceased left no will and acknowledge that the Estate of the Deceased (herein called “the Estate”) needs to be administered in terms of the Administration Act 1964 [sic].
B. The Siblings are all the Deceased’s surviving brothers and sisters.
C. Gloria is the Deceased’s wife however [she] separated from the Deceased many years ago. At or about the time of their separation the Deceased and Gloria entered into a Matrimonial Property Agreement dividing their assets between themselves.
D. Gloria claims an interest in the assets of the Estate by virtue of the marriage remaining undissolved. Without entering into any dispute about the matter the Siblings (as the other closest next of kin of the Deceased) have agreed to settle by agreement.
E. The parties wish to record their agreement as to the administration and distribution of the Estate.
[14] The relevant operative provisions are:
1.Notwithstanding any statutory provisions relating to the administration and distribution of the Estate of the Deceased and the rights of either party the parties agree that the Siblings shall be entitled to 90% (equally among them) of nett distributable funds of the Estate and that Gloria will be entitled to 10% of the nett distributable funds of the Estate.
…
3.On signing of this agreement Gloria will sign a form waiving any rights she may have to be an administrator of the Estate and if necessary consenting to one or more of the Siblings being appointed as Administrator. The form shall be provided to the Estate solicitor.
…
11. The parties to this Deed acknowledge that they either have obtained independent legal advice as to the effect of this Deed before it was signed or freely had the opportunity of obtaining such advice and opted not to do so.
…
13.The Estate shall bear the costs of preparation of this Deed and all costs related to administration of the Estate. Any person requiring their own advice separate from the Estate shall be responsible for any associated costs.
[15] The deed of settlement is annexed to an affidavit of Mrs Warrender. In her affidavit she set out in some detail the sequence of events leading to her entering into the compromise, including legal advice she received to the effect that she had no claim to an interest in Mr Warrender’s estate.
[16] Mrs Warrender produced a copy of a letter from a solicitor she had consulted for advice on the compromise. The letter records instructions received by the solicitor, including the following:
Your husband passed away last year, although you had been living apart for some years prior to that. You bought [sic] with you a copy of the Relationship Property Agreement which you signed when you separated. You indicated that you had agreed with George not to pursue a claim against his estate, and you were requested by MooreLaw to sign a Waiver of your right as spouse to administer the estate. You came to me in October or November anxious about this, and I indicated then that I did not think you could claim against the estate because of the Relationship Property Agreement.
…
The Putaruru lawyers … who proposed to administer the estate on behalf of George’s siblings in the United Kingdom brokered a deal whereby you would receive 10% of the proceeds of the estate – which you understood was moderately substantial. You came to me in January to tell me this good news, and you have come again today with a copy of the settlement agreement to be signed.
Issue 1: Can spouses contract out of the entitlement to succeed on an intestacy provided in s 77 of the Act?
[17] Mr Rowe, for Mrs Warrender, referred to the statutory exceptions to the general right of succession provided in s 77. He submitted, in essence, that because there is no provision in the Act for contracting out there is no right to contract out. I was not referred to any authority to this effect.
[18] I am not persuaded that the absence of a statutory provision for contracting out means that a spouse is not able to contract out. There is no general rule of law to that effect in relation to statutory provisions which provide rights to private property. There is no provision in the Act which, expressly or by necessary implication, prohibits contracting out. The question must then be determined by considering whether there is any other basis, and in particular the policy underlying the rules for intestate succession, which make clear that Parliament intended that a party could not contract out of a right available under s 77. Mr Rowe did not refer me to any policy which persuades me to that effect. And in my judgment there is no sound policy reason for concluding that there can be no contracting out.
[19] Section 77 is concerned with rights to private property. The law, in general, provides wide freedom to deal with property rights. This includes contracting out of rights which may be available from a range of sources, both statutory and non- statutory. The fact that property rights are regulated in numbers of ways, through statute and the common law, does not derogate from the general freedom that underpins the law in relation to private property rights as a whole. There does not appear to be any sound reason to elevate the statutory right of succession provided by s 77, being a provision dealing with the distribution of private property, above the more fundamental right to choose not to receive a benefit.
[20] These general conclusions are reinforced by considering the particular purpose of s 77. Section 77 can be described as a default provision. To avoid difficulties that might otherwise arise, the law, through a statute, prescribes the way in which private property is to be disposed of when the deceased person who owned the property did not do what that person otherwise could lawfully have done; that is, dispose of the property by will or in some other way. As a default provision, disposition under s 77 is determined simply by status – the relationship of people to the deceased person. This statutory disposition based solely on status is carried through to the exceptions; for example, the normal default result for a spouse will
not apply if there has been the simple formality of a separation order.1 Mr Rowe
referred to this in support of a submission to the effect that the only circumstance in which the s 77 entitlement will be excluded will be if there is a statutory exception. I do not agree. A statutory system based on fairly arbitrary provisions of this nature is not one which suggests that it would be contrary to policy for those who might otherwise be entitled to the property to contract out of the entitlement.
[21] There is persuasive Canadian authority that parties are free to contract out of their rights to succeed on an intestacy. This is a unanimous decision of five Judges of the Appellate Division of the Alberta Supreme Court in Re Rist.2 Ford JA,
delivering the principal judgment, said:3
There is I think ample authority for the proposition of law that a wife may forfeit her rights upon her spouse’s intestacy by express agreement made either prior or subsequent to the marriage and indeed that an express or implied agreement may exist between the spouses excluding the survivor from any claim to the other’s property or intestacy.4
[22] The agreement in Re Rist was express in its terms in relation to contracting out of a right to succeed on an intestacy. The relevant part of the agreement in that
regard was:
1 Section 77A of the Act.
2 Re Rist [1939] 2 DLR 644.
3 At 648.
4 See: S N Grant-Bailey Lush on Husband and Wife (4th ed, Stevens & Sons Ltd, London, 1933) at 79; Halsbury’s Laws of England (2nd ed, 1932) vol 10 Distribution and descent at [840]. See especially: note (t) Druce v Denison (1801) 6 Ves Jun 385, 31 ER 1106; Gurly v Gurly (1842) 2 Dr & Wal 463, 8
CL & Fin 743, 8 ER 291.
The said Kate Rist doth hereby covenant and agree with the said Thomas Rist that in case the said Thomas Rist shall predecease the said Kate Rist, testate or intestate, the said Kate Rist shall have no right claim or demand of any nature or kind under The Intestate Succession Act or any other Act or Law whatsoever against the estate of the said Thomas Rist. …
[23] Mr Rowe submitted that Re Rist should be distinguished because in this case there is no express reference to an entitlement on an intestacy. This point of distinction does not bear on the present issue whether, as a matter of principle, a person can contract out of the entitlement under s 77 of the act. If there can be contracting out, the question will of course remain as to whether the terms of the agreement have the effect of contracting out. This is the question arising in issue 2.
[24] In addition, it is clear from the judgment of Ford JA that the point of principle did not turn on the express contracting out of the right to succeed on an intestacy. Ford JA observed that the provisions in an agreement dealt with in another case, Re Anderson, would effectively exclude the right.5
[25] Re Rist and Re Anderson also considered the question whether, as a matter of public policy, a wife could contract out of her entitlement under another Alberta statute, the Widows’ Relief Act. This is an Act in some broad respects similar to the New Zealand Family Protection Act 1955. It was held that a wife could not contract out of the Widows’ Relief Act. This point is relevant to illustrate the fact that, in the absence of an express statutory provision or permission, the question is an open one to be determined by reference to the policy underlying the statute.
[26] As Mr Wallis noted, for the defendants, Re Rist is cited as good authority on the effectiveness of contracting out in Sherrin and Bonehill, The Law and Practice on Intestate Succession.6 In Dobbie’s Probate and Administration Practice the
ability to contract out appears to be taken as uncontentious.7 The authors set out the
5 Re Rist, above n 2, at 649; Re Anderson [1934] 2 DLR 484 (another decision of the Appellate
Division of the Alberta Supreme Court).
6 C H Sherrin and R C Bonehill The Law and Practice on Intestate Succession (Sweet & Maxwell, London, 1987) 347-348. In addition to the early cases cited in Re Rist, noted above at n 4, Sherrin and Bonehill refer to Henderson v Northern Trusts Co [1953] 1 DLR 109; Re Janes [1950] 2 WWR
313; Penny v Milligan [1907] 5 CLR 349.
7 J Earles, WLB Douglas, C Kelly and G Kelly Dobbie’s Probate and Administration Practice (5th ed, Lexis Nexis, Wellington, 2008) at [29.3.1].
exceptions to the general rule that a surviving spouse or other partner of an intestate person is entitled to a grant of administration. One of the exceptions is:
If the parties have signed a separation deed or relationship or matrimonial property agreement which deprives the survivor of any interest in the deceased’s property, the grant will be made to the next of kin; although older cases held that the husband would be entitled to receive notice of the application8 - the reason was that the husband might dispute the deed.9
[27] The discussion in Dobbie is concerned with applications for administration, now governed by r 27.35 of the High Court Rules.10 Mr Rowe submitted that the opinion in Dobbie could have no application to a surviving widow’s entitlement to benefit provided by s 77 of the Act. I do not agree, for reasons already discussed; the right to administer the intestate estate is dependent upon having a beneficial interest and this turns on s 77.
[28] Mr Rowe submitted that the decision of this Court in Re Trotter11 is authority for his submission that a spouse (or other partner) cannot contract out of the right that person may have under s 77 of the Act.
[29] The facts of Re Trotter are similar to the facts of this case. It concerned an application for administration of the estate of Murray Trotter by Christine Trotter. When Murray Trotter died he was married to Christine Trotter. They had separated some eight years earlier but there was no separation order. They made a matrimonial property agreement after they parted. The terms of the agreement of present relevance were described in the judgment as follows:
[6] The agreement included a standard clause to the effect that the agreement effected a final settlement between the parties "under the Matrimonial Property Act 1976 or under any Act or Acts passed in amendment or Rule of the common law or of equity or otherwise": cl 6.1. Further, cl 6.2 provided:
8 In bonis Piggott (1873) 42 LJP&M 79; Re Humphrys, Allen v Humphrys (1883) 8 PD 16.
9 In bonis Megson (1899) 80 LT 295.
10 The reference in Dobbie is to the former r 665(3)(a), which in material respects is to the same effect as r 27.35.
11 Re Trotter HC Christchurch CIV-2009-409-2584, 10 May 2010.
This agreement shall be binding on the parties in all circumstances including bankruptcy, the taking [of] property in execution by creditors, separation (whether on one or more occasions), reconciliations, dissolution of the marriage or the death of one or both parties.
[30] Christine Trotter was successful in her application to be granted letters of administration. The result was therefore the result Mrs Warrender seeks in this case. However, the Judge was not required to deal with the question whether a party can contract out of an entitlement under s 77 of the Act. The scope of the argument in Re Trotter was clearly limited. The parties opposing the application by Christine Trotter, a brother and cousin of Murray Trotter, appeared in person. It appears that they questioned whether there should be a grant to Christine Trotter because of the matrimonial property agreement. But they were also concerned by Christine Trotter’s application because they understood that Murray Trotter had been living in a de facto relationship at the time of his death.
[31] The effect of the matrimonial property agreement was dealt with very briefly, as follows:
[10] But did she still have “a beneficial interest in the estate” given the separation, and more particularly, the matrimonial property settlement? Section 77C of the Administration Act governs succession on an intestacy where the deceased dies leaving a wife, civil union partner and one or more de facto partners. In that event a sole surviving wife or partner takes the entire estate (s77C(2)(a)), or in the event that there are two or more qualifying claimants the estate is distributed in equal shares (s77C(2)(b)). Hence, Christine Trotter as a surviving wife has a beneficial interest in the estate, regardless of the matrimonial property settlement (and absent the existence of a separation order).
[32] The narrow scope of the argument is apparent. Not only was there no argument about contracting out, the Judge was not even required to refer to s 77. The only reference is to s 77C which is concerned with beneficial entitlements when a person dies leaving a surviving spouse and one or more de facto partners. The Judge also noted that the exceptions to an entitlement to a grant in r 27.35(4)(a) of the Rules did not apply because, although Mr and Mrs Trotter had parted, there was no Court order for separation. The Judge was not referred to Re Rist, or any of the other authorities or commentaries already referred to in this judgment. It is apparent that the point made by Murray Trotter’s brother and cousin, in opposing the
application, was simply that there was a matrimonial property agreement. They were also concerned for the person who they understood to have been Murray Trotter’s de facto partner. But that person advised the Court that she had no intention to claim an interest in the estate.
[33] It is of significance that the Judge said, when dealing with the question of costs:
[20] … I find that the caveators in this case acted out of genuine concern and accepted the inevitable, once the possibility of a rival de facto claimant fell away.
The Judge contrasted this approach to the approach in another case referred to by counsel for Mrs Trotter. Panckhurst J said that in that case it was “apparent that the opposition to probate was much more concerted than in this case”.12 So too, in the present case, the argument in opposition to the grant of administration was much more concerted.
[34] Mr Rowe referred also to the decision of the Family Court in SLW v KP.13
The issue now being considered did not arise in any direct way in that case. It was concerned with a question whether s 4A of the Property (Relationships) Act 1976 excludes distribution under s 77 of the Administration Act.
[35] For these various reasons I am satisfied that a spouse can contract out of her entitlement to succeed on the intestacy of her spouse.
Issue 2: Did Mrs Warrender contract out of her entitlement to succeed if Mr
Warrender died intestate?
[36] Mr Rowe submitted that the agreement is confined to settlement of claims to matrimonial property.14 He submitted, in effect, that once Mr and Mrs Warrender had agreed on the division of matrimonial property and title to the agreed items had
gone to the appropriate party, the property one spouse then owned remained subject
12 Re Trotter, above n 10, at [19].
13 SLW v KP [2012] NZFC 3293.
14 The term “matrimonial property” is conveniently used because it is the term appropriately used by
Mr and Mrs Warrender.
to rights of the other spouse under enactments other than the Matrimonial Property Act 1976 (as it was then called). As a result, it was submitted, a claim under s 77 of the Act remained available to Mrs Warrender. Mr Rowe also submitted that the agreement, whatever its scope, entailed contracting out of “rights”, whereas s 77 confers an “entitlement”. There is nothing in the distinction.
[37] In my judgment the agreement clearly is not limited in the way submitted by Mr Rowe, and it did extinguish Mrs Warrender’s entitlement under s 77; she did contract out of her right to acquire Mr Warrender’s property if he died intestate.
[38] The effect of the agreement is appropriately considered by reference to its effect on Mrs Warrender, although the effect on Mr Warrender would have been the same if Mrs Warrender had died before Mr Warrender and died intestate.
[39] Mrs Warrender acknowledged that the agreement settled all claims she might otherwise have had against Mr Warrender pursuant to any legal entitlement. Clause
21 refers, amongst other things, to any claims or rights Mrs Warrender may have under any statute. This, by its express terms, includes the Administration Act.
[40] Clause 23 refers to claims in respect of property, but this appears to be confined to matrimonial property passing to Mr Warrender under the agreement. However, the agreement as a whole is wider. A settlement of all claims against Mr Warrender, as provided in clause 21, is plainly intended to include claims of any nature to any of the property of Mr Warrender.
[41] Clause 22(f) then makes clear, beyond reasonable argument, that property of Mr Warrender excluded from a claim by Mrs Warrender, or in respect of which she contracted out of all rights, included all property owned by Mr Warrender at his death. This can only mean, in the circumstances that arose, that Mrs Warrender contracted out of the right she would otherwise have had to succeed to Mr Warrender’s estate if he died intestate. And this is exactly what Mrs Warrender herself understood the effect of the agreement to be, as she told her solicitor.
Issue 3: Is the compromise effective and binding?
[42] Mr Rowe advanced alternative arguments. He submitted, first, that the compromise is a purported disclaimer by Mrs Warrender of the interest she had as a widow, but the deed recording the compromise does not comply with s 81 of the Act. Section 81 sets out the requirements for a valid disclaimer. Mr Rowe submitted there was non-compliance because, contrary to s 81(3), there was consideration for the disclaimer and the deed made provision for the assignment of the disclaimed interest and directed disposition of the residue.
[43] This argument depended on a finding in Mrs Warrender’s favour on issues 1 and 2. The argument fails because of the findings against Mrs Warrender on those issues. It also fails because the compromise, as a matter of construction, is not a disclaimer of an established interest under s 77. It is a compromise between two parties, each of whom was claiming to be the party entitled under s 77.
[44] The alternative argument for Mrs Warrender was that the compromise should be set aside because of a mistake by both parties. The parties were said to have been mistaken in their understanding that the effect of the property agreement was that Mrs Warrender had no entitlement to any part of the estate. Mr Rowe submitted that this understanding was mistaken because the property agreement did not have that effect. This argument also cannot succeed because of the conclusions on issues 1 and 2. If it is assumed that both parties – Mrs Warrender on one side and the siblings on the other – understood that Mrs Warrender had no entitlement because of the property agreement, that understanding was correct.
[45] In addition, I am not persuaded that there would have been a mistake as alleged even if the conclusion on issues 1 and 2 had been different. The foundation for the compromise was not the same understanding on both sides as to the effect of the agreement, but uncertainty of outcome had the matter gone to court. This is a very common and conventional compromise of competing claims to the same interest.
[46] I am accordingly satisfied that Mrs Warrender is bound by the compromise.
Costs
[47] Mr Wallis submitted that, if the defendants were successful, there should be an order for indemnity costs in their favour with those costs to be paid by Mrs Warrender. I am satisfied that there should be an order for costs against Mrs Warrender and that those costs should be in a sum in excess of scale costs fixed on a
2B basis.
[48] It is not possible to fix the quantum of costs because I do not have sufficient information for that purpose. In addition, I consider it is desirable that the parties have an opportunity to seek to agree on the quantum of costs to be paid by Mrs Warrender. To assist in discussions I will make some observations in response to the submissions that were made on the question of costs.
[49] In my judgment this claim should not have been brought by Mrs Warrender. The central reason for that conclusion is that Mrs Warrender entered into the compromise and did so having received independent legal advice. She entered into that compromise when she herself was of the opinion that she had no claim to Mr Warrender’s estate. As earlier recorded, this was her understanding of the effect of
the property agreement.15 Mrs Warrender’s understanding as to the effect of the
agreement is not a matter that could be taken into account to assist in interpreting what the parties had recorded. But it does bear on the question of costs. There will be occasions when a compromise entered into to avoid litigation will be set aside, but there was no reasonably arguable basis for challenging this compromise solemnly entered into to avoid, for all parties, what Mrs Warrender then embarked on with her claim.
[50] Because of those considerations, any uncertainty as to whether Mrs Warrender could, as a matter of law, contract out of her entitlement under s 77 was not relevant to the question as to whether this proceeding should have been commenced. But in that regard, before the proceeding was commenced, Mrs Warrender and her legal advisers had information from the defendants’ solicitors
which should have indicated that the prospects of success on issues 1 and 2 were not
15 Recorded in her solicitor’s letter as noted above at [41].
high. The defendants’ solicitors had provided Mrs Warrender’s solicitors with reasonably full legal argument including reference to Re Rist, Sherrin and Bonehill’s The Law and Practice of Intestate Succession, and Dobbie’s Probate and Administration Practice. The defendants’ solicitors also referred Mrs Warrender’s solicitors to Re Trotter and noted the matters that have been dealt with in this judgment to indicate that Re Trotter was unlikely to be determinative.
[51] If agreement has not been reached on costs within one month of the date of this judgment, a memorandum for the defendants should be filed and served. The memorandum should include sufficient particulars of actual costs incurred, if indemnity costs are sought, together with any further submissions on the reasons why a particular level of cost is sought. A memorandum in response for Mrs Warrender should be filed and served three weeks after receipt of the memorandum for the defendants.
Result
[52] The plaintiff’s claim is dismissed.
[53] The plaintiff is to pay the defendants’ costs in a sum to be fixed in accordance with [47]-[51] of this judgment.
[54] Letters of administration of the estate of George Warrender are to be granted to one or more of the defendants as shall be stipulated by the defendants and otherwise in accordance with the deed of settlement made between the plaintiff and the defendants dated 2 March 2011.
[55] The estate is to be distributed in accordance with the provisions of the deed of settlement dated 2 March 2011 subject, in the case of the defendants’ interests in
accordance with paragraph 1 of that deed, to payment of costs by the plaintiff.
Woodhouse J
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