Winterburn v Wilson

[2016] NZHC 2687

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2015-409-000767 [2016] NZHC 2687

IN THE MATTER OF

ESTATE OF DAWN UNA RICHARDS

BETWEEN

JEROME RANGI WINTERBURN AND NGAIRE PEARL ARCUS

Plaintiffs

AND

DAVID JAMES WILSON Defendant

Hearing:	(Dealt with on the papers)
Counsel:	J M Stringer for Plaintiffs D R Weatherley for Defendant
Judgment:	9 November 2016

JUDGMENT OF GENDALL J (As to Costs)

WINTERBURN v WILSON [2016] NZHC 2687 [9 November 2016]

[1]      In a judgment I issued in this proceeding on 28 June 2016 I made an order under s 14(2) of the Wills Act 2007 declaring file notes and a will instruction sheet completed by the deceased Dawn Una Richards (the deceased) in August 2014 to be her valid will.   The effect of this was that the bulk of the deceased’s estate was effectively left equally to her sons, the first named plaintiff, Jerome Winterburn, and his brother, Raymond Winterburn.

[2]      These file notes  and  will  instruction  sheet (completed shortly before  the deceased died on 22 August 2014) had the effect of revoking her previous will signed on 3 October 2003 by which the defendant Mr Wilson, who was the de facto partner of the deceased, was to receive all of her estate.

[3]      At paras [50] and following of my 28 June 2016 judgment, I noted that the plaintiffs sought an award of costs here.  The defendant too indicated a wish to be heard on that question.  I therefore reserved costs and indicated that, if counsel were unable to agree on this issue between themselves, they could file memoranda.  These memoranda were then to be referred to me and, in the absence of either party indicating they wished to be heard personally on the question of costs, I would decide that question based on all the material before the Court.

[4]      Counsel have now advised that they have been unable to agree on the issue of costs.  Accordingly, counsel for the plaintiffs has filed an initial memorandum on costs dated 21 September 2016.   Counsel for the defendant in turn has filed submissions  dated  3 October  2016  and  counsel  for  the  plaintiffs  has  filed  brief submissions in reply dated 25 October 2016.  No party has indicated they wished to be heard personally on the issue.

[5]      I have now had an opportunity to consider all those submissions and give my decision on the costs question.

[6]      In this case, the plaintiffs seek an order for costs against the defendant. Alternatively, if this fails, they seek an order that the defendant should bear his own costs with respect to the proceeding.   The defendant’s position in response is threefold.   First, he says that, on the basis that his opposition to the plaintiffs’

application was entirely reasonable, in these circumstances his costs should be met from the deceased estate.  Secondly and alternatively, he says he should not be liable for the plaintiffs’ costs at all.   And thirdly and last, he argues that if this Court disagrees and finds that the defendant is to be liable for the plaintiffs’ costs, then the defendant contends that his liability should be limited to steps taken after he filed his notice of opposition.

[7]      This issue of costs in proceedings over wills, such as the present testamentary promises action by the plaintiffs, was recently addressed in this Court by His Honour Davidson J in Harris v Taylor.1    Certain comments in this judgment are usefully repeated here.

[16] The authors of Law of Costs [G E Dal Pont (3rd ed), Lexis Nexis] 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”. These are:

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 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:

(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.

1      Harris v Taylor [2016] NZHC 483.

(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”. 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]      As I have noted above, here the plaintiffs contend that an order for costs should be made against the defendant or, alternatively, if this argument fails the defendant should bear his own legal costs and receive no costs reimbursement from the deceased’s estate.

[9]      On  this  aspect,  the  plaintiffs  suggest  these  proceedings  to  validate  the deceased’s will instructions as her last will did not originate from any fault on her part.  The plaintiffs say therefore there is no justification for the defendant’s costs here on this basis to be borne out of the estate.

[10]     It is clear from the evidence before the Court that it was on 12 August 2014 that the deceased made an appointment with her solicitor to make a new will.  She arrived at this appointment prepared for a discussion, bringing her existing will and personal notes on what she wanted to include in the new will.   Her solicitor then gave her a will instruction sheet to complete which she did, returning that sheet to the solicitor the next day.   This will instruction sheet set out what she wanted to include in her new will and included an acknowledgment form declaring that, if she died before signing a formal will, the will instruction sheet was to be her last will. Unexpectedly the deceased then died nine days later when she was undergoing minor surgery.

[11]     The plaintiffs note that the Court does have a discretion in relation to whether it awards costs in terms of r 14.1 of the High Court Rules.  The general rule outlined in r 14.2 which is to prevail in most cases is that costs usually should follow the event, with the party failing paying the other party’s costs.

[12]     In opposing the plaintiffs’ submissions however, the defendant notes that the relevant legal principle in proceedings involving estates, and more particularly, the claims involving validation of will material, are modified to an extent.  This is to the effect that, in such a case, the costs of an unsuccessful party should be paid out of the estate where the testatrix has by her own conduct caused the litigation, for example by the state in which she left her testamentary documentation.

[13]     Here, the defendant suggests that these proceedings were required due to what he suggests was a fault on the part of the deceased in not leaving her affairs in order.   Mr Weatherley, counsel for the defendant, whilst acknowledging that there was no real question of blame or criticism against the deceased in this case, given that her death was plainly unexpected and unforeseen, nevertheless, it cannot be denied that the application involved in the present proceeding arose from the fact that her affairs were not in order.  She had not completed a will that complied with the Wills Act.  The defendant notes also that, even leaving aside his opposition to the present application, it is one which would have been required anyway because the approval of this Court was needed to give the documents in question testamentary effect.

[14]     Therefore, because these proceedings transpired as a result of the state of the deceased’s affairs, the primary position adopted by the defendant here is that his costs, as well as those of the plaintiffs, should be met out of the estate.  Also, he contends that in any event his opposition to the plaintiffs’ application was reasonable and entirely justified even though it was ultimately unsuccessful.  On this he noted that the change to the deceased’s earlier will provisions resulted in a significant alteration to his entitlement in that he went from receiving the bulk of the deceased’s estate to receiving none of it.  Whilst this is true, at para [49] of my judgment of

28 June  2016  I  did  note  that  any  claims  against  the  deceased’s  estate  by  the

defendant here were better resolved (if that was thought appropriate) through the

Property (Relationships) Act 1976.

[15]     With all these matters in mind, overall I am of the view that the defendant’s opposition to the present application was properly brought and bona fide and he should not be liable for the plaintiffs’ costs.   Further, although it seems clear here that the deceased cannot in any sense be “blamed” for the failure to have her affairs in order given her untimely and unforeseen death, nevertheless this present application (which would have been necessary in any event) did arise from the fact that her affairs were not fully in order.  Accordingly and particularly given the major alteration to the deceased’s entitlement in this case, there was a serious issue to be tested.

[16]     At  this  point  I  note  the  comments  in  McGechan  on  Procedure  at  para HR Pt 14.15(1) that, unless the probate litigation in question arises through the fault of the testator or unless there are reasonable grounds to question the execution of the will or the testator’s capacity, or to put forward a charge of undue influence or fraud the general rule that costs should follow the event ought to prevail.

[17]     With this in mind and, in taking into account all relevant considerations here, I am of the view that justice between the parties is best served here by ordering that costs should lie where they fall.

[18]     Accordingly, an order is now made that costs will lie where they fall.  There is no order for costs made in the estate other than, of course, to recognise that Ms Stringer’s costs as counsel for the plaintiffs and those of her firm are properly charged to the estate on an indemnity basis.

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

Gendall J

Solicitors:

Young Hunter Lawyers, Christchurch

Saunders Robinson Brown, Christchurch