Harsant v Menzies [2014] NZHC 563 (25 March 2014)

Last Updated: 13 May 2014

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-000007 [2014] NZHC 563

UNDER	the Administration Act 1969
IN THE MATTER	of the estate of the late FREDERICK GEORGE HARSANT deceased
BETWEEN	PAMELA CONSTANCE HARSANT Applicant
AND	GAIL MAVIS MENZIES, COLIN WALTER HARSANT and MALCOLM JOHN HARSANT Respondents

Hearing:	On the papers
Appearances:	B M Stewart and Mr Hall for the Applicant M J Harsant on behalf of the Respondents
Judgment:	25 March 2014

JUDGMENT OF ELLIS J (Correction to para [69] of [2012] NZHC 3390)

This judgment was delivered by me on Tuesday 25 March 2014 at 12.00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:...............................

Counsel/Solicitors:

B M Stewart, Simpson Western, North Shore, Auckland

_{Copy to: The Trustees of the F G Harsant estate.}

HARSANT v MENZIES [2014] NZHC 563 [25 March 2014]

[1] On 13 December 2012 I gave judgment in favour of the applicant, removing the respondents as trustees of the estate of Frederick George Harsant and appointing the New Zealand Guardian Trust Company Ltd in their stead.¹ I ordered that the applicant’s costs on a 2B basis be paid out of the estate.

[2] By a rather circuitous route (which I do not need, for present purposes, to set out) it has very recently come to my attention that in making that costs award I overlooked the fact that the applicant had, in fact, sought an award of indemnity costs on the basis of either r 14.6(4)(c) or (f). Those provisions state:

(4) The court may order a party to pay indemnity costs if—

...

(c) costs are payable from a fund, the party claiming costs is a necessary party to the proceeding affecting the fund, and the party claiming costs has acted reasonably in the proceeding; or

...

(f) some other reason exists which justifies the court making an order for indemnity costs despite the principle that the determination of costs should be predictable and expeditious.

[3] The applicant has asked me to correct my omission pursuant to the slip rule

(r 11.10).²

[4] As Harrison J noted in Waitara Leaseholders Association Inc v New Plymouth District Council³ r 14.6(4)(c) apparently has its origins in Re Buckton where Kekewich J said:⁴

In a large proportion of the summonses adjourned into Court for argument the applicants are trustees of a will or settlement who ask the Court to construe the instrument of trust for their guidance, and in order to ascertain the interests of the beneficiaries, or else ask to have some question determined which has arisen in the administration of the trusts. In cases of this character I regard the costs of all parties as necessarily incurred for the

¹ _{Harsant v Menzies [2012] NZHC 3390.}

2. That this was the appropriate course was advised to the applicant by the Court of Appeal in a recent minute: Harsant v Menzies CA52/2013, 28 February 2014.

³ _{Waitara Leaseholders Association Inc v New Plymouth District Council HC New Plymouth}

_{CIV-2004-443-000162, 27 June 2008.}

⁴ Re Buckton [1907] 2 Ch 406 at 414 – 415.

benefit of the estate, and direct them to be taxed as between solicitor and

client and paid out of the estate...

There is a second class of cases differing in form, but not in substance, from the first. In these cases it is admitted on all hands, or it is apparent from the proceedings, that although the application is made, not by trustees (who are respondents), but by some of the beneficiaries, yet it is made by reason of some difficulty of construction, or administration, which would have justified an application by the trustees, and it is not made by them only because, for some reason or other, a different course has been deemed more convenient. To cases of this class I extend the operation of the same rule as is observed in cases of the first class. The application is necessary for the administration of the trust, and the costs of all parties are necessarily incurred for the benefit of the estate regarded as a whole...

[5] Buckton J contrasted these two classes of case with a third, different type of proceeding, where a beneficiary makes an application that is adverse to the other beneficiaries. The Judge said that the ordinary costs rules should apply in cases falling within this latter class.

[6] Applying the terms of r 14.6(4)(c) itself to the present case:

[7] I have already ordered that the applicant’s costs should be borne by the relevant fund, namely Mr Harsant’s estate;

[8] The proceeding affected the fund and the applicant, Pamela Harsant, (who is a beneficiary) was, in my view, a necessary party to the proceeding;

[9] Pamela Harsant acted reasonably in the proceeding.

[10] As I think my substantive judgment makes clear, the application for removal of the respondents as Trustees was indisputably a step taken by Pamela Harsant in the best interests of the estate. Removal of the applicants was ordered for that very reason. As I said at [65] of my judgment, there were grounds for very considerable concern that the welfare of all the beneficiaries was at risk if the respondents had been permitted to continue in that role. It is therefore plainly appropriate that the estate bear Ms Harsant’s costs on a solicitor and client basis. It was only through oversight on my part that I did not make an order to that effect in December 2012.

[11] On that basis I simply direct that [69] of my judgment dated 13 December

2012 should read:

Pursuant to r 14.6(4)(c), the applicant’s costs are payable on an indemnity

basis out of the estate.

Postscript

[12] Due to the effluxion of time since the release of my original judgment, and changes to the processes by which judgments are published, it is not possible now simply to correct and republish that judgment. It seems to me, however, that that is of no particular moment, given the nature of the correction I am making.

[13] I simply record, therefore, that Harsant v Menzies [2012] NZHC 3390 needs to be read in conjunction with this judgment.

Rebecca Ellis J