|
|
Home
| Databases
| WorldLII
| Search
| Feedback
High Court of New Zealand Decisions |
Last Updated: 12 June 2020
|
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
|
|
CIV-2019-4099-000048
[2020] NZHC 1042 |
|
BETWEEN
|
PETER CHRISTOPHER EASTGATE
Applicant
|
|
AND
|
SHARON BEULAH WALKER-PRENTICE
First Respondent
LOIS REBECCA BECKWITH
Second Respondent
WARREN REGINALD WALKER
Third Respondent
|
|
Hearing:
|
21 April 2020
|
|
Appearances:
|
J V Ormsby for Applicant
G M Brodie for First Respondent
K W Clay and S J Jamieson for Second and Third Respondents
|
|
Judgment:
|
19 May 2020
|
JUDGMENT OF GENDALL J
This judgment was delivered by me on 19 May 2020 at 2:15 p.m. pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
EASTGATE v WALKER-PRENTICE [2020] NZHC 1042 [19 May 2020]
Introduction
[1] Zelda Rose Walker (Mrs Walker) died on 8 September 2018. The applicant, Peter Eastgate (Mr Eastgate) as executor has applied for probate in solemn form of a will of Mrs Walker dated 25 July 2012 (the 2012 Will). Mrs Walker’s youngest daughter, the first respondent Sharon Walker-Prentice (Sharon) opposes this application. Sharon’s opposition to probate being granted of the 2012 Will is based on her contention that a later will made by Mrs Walker on 17 April 2014 (the 2014 Will) is her last will and should be admitted to probate, instead. Alternatively, Sharon suggests that an earlier will made in 2011 might be admitted to probate but not the 2012 Will.
[2] Mrs Walker’s older children, the second respondent Lois Beckwith (Lois) and the third respondent Warren Walker (Warren), as I understand the position, support Mr Eastgate’s application and accept too that the 2012 Will should be admitted to probate. They oppose their sister Sharon’s claims to the contrary.
[3] The substantive solemn form probate application in this proceeding remains to be determined.
[4] Before me, however, was an application by Mr Eastgate seeking a prospective costs order in his favour in relation to the substantive proceeding. This judgment relates to that prospective costs order application.
Background facts
[5] An issue in the substantive proceeding here is whether the Court should grant probate to the 2012 Will or to the 2014 Will. Under the later 2014 Will, Lois, Warren and Sharon are appointed executors. Lois, however, has caveated the 2014 Will.
[6] The principal difference between the two wills relates to the forgiveness of a debt/gift of $600,000 made by Mrs Walker during her lifetime to Sharon. Under the 2014 Will, this amount is forgiven entirely. Under the 2012 Will it is not. In the case of each will, the estate residue is left between Lois, Warren and Sharon equally.
[7] If the 2012 Will is admitted to probate the effect is that Lois and Warren will receive an extra $400,000 ($200,000 each) which they would not receive under the 2014 Will. Sharon maintains that the $600,000 forgiveness noted at [6] above mirrors the provisions of all previous wills made by her mother except the 2012 Will.
[8] As I understand it, there have been long-running disputes between Sharon on the one hand and Lois and Warren on the other about this distribution of their mother’s estate. The estate is a substantial one. It is said by Mr Eastgate to have a value of about $4 million.
[9] Margaret Davidson and Davit Tait, who were originally named as executors of the 2012 Will, along with Mr Eastgate, have renounced as such, as they did not want to act as executors. Mr Eastgate remains the sole named executor of the 2012 Will.
[10] Linked to the present matter before me, in a prior minute in this Court dated 29 May 2019, Dunningham J made orders first, appointing Mr Eastgate as temporary administrator of Mrs Walker’s estate pursuant to s 7 of the Administration Act 1969 pending the outcome of this proceeding; and secondly, “that [Mr Eastgate] be:
(i) Paid his professional fees, costs and disbursements together with those of any staff or contractors engaged by him as temporary administrator of the estate...”
[11] Mr Eastgate says here that after taking advice from counsel, as he has formed the view that the 2012 Will was the last valid will of Mrs Walker, then he had a duty to seek probate and to propound this 2012 will.
[12] Mr Eastgate maintains that his position and role here is simply to present to the Court the known material facts and to test any contrary evidence that may be put forward. He says it is not his role to become involved in any hostile disputes between the respondents as children of Mrs Walker.
[13] Mr Eastgate contends that he just seeks here simply to comply with his obligation to propound the 2012 Will because he says the evidence gathered by him to date indicates that:
(a) It is likely Mrs Walker did not have testamentary capacity at the time the later 2014 Will was executed; and
(b) It appears that Mrs Walker was operating under the influence of her daughter Sharon at the time she signed this 2014 Will.
[14] But, ultimately, Mr Eastgate accepts these are matters for the Court to determine. He assures the Court that he seeks to discharge his obligations by simply bringing these matters before the Court to decide.
Prospective costs order in probate proceedings
[15] Costs in civil proceedings are at the discretion of the Court.1 That discretion is to be exercised in a principled way and in accordance with pt 14 of the High Court Rules 2016. It is a general principle that the unsuccessful party should pay costs. Costs are usually determined following the substantive hearing of the matter. A prospective costs order seeks determination of a costs matter in advance of the substantive hearing.
[16] Estate cases have their own established case law on costs. Re Paterson (deceased) is the leading authority on costs in probate matters generally. There, Stringer J set out the following principles:2
The Court has a general discretion as to costs in all actions and proceedings before it, but there are certain well-established principles upon which that discretion should be exercised in cases of contested wills. They are as follows: (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 following
1 High Court Rules 2016, r 14.1.
2 Re Paterson (deceased) [1924] NZLR 441 (SC) at 442–443.
exceptions, the general rule that costs should follow the event ought to prevail...
[17] A party may apply for a prospective costs order that:3
(a) their own costs will be paid out of the estate;
(b) they will not be liable to pay costs to any other party; and/or
(c) any costs they are ordered to pay to the other party will be paid out of the estate.
[18] As Associate Judge Andrew noted in Hiliau v Tu’ilotolava, applications for prospective costs orders are common in trust (and estate) litigation.4 His Honour said these disputes may be broadly categorised as either “friendly” or “hostile”.5 Friendly litigation generally involves proceedings where the Court’s direction on trust administration is sought for the benefit of the trust. Conversely, hostile litigation generally involves contested proceedings, such as a challenge to the validity of a trust. The nature of the litigation will determine whether a prospective costs order will be appropriate.
[19] In Re Buckton Kekewich J made his “classic statement”6 on the issue of costs in trust case, outlining the three categories:7
(a) Proceedings brought by trustees to obtain the Court’s guidance on the operation of the trust deed or the trust’s administration. In such cases, costs are treated as incurred for the benefit of the estate and ordered to be paid out of the trust.
3 Hiliau v Tu’ilotolava [2018] NZHC 2286, (2018) 4 NZTR 28-022 at [20] citing Woodward v Smith
[2014] NZHC 407, [2014] 3 NZLR 525 at [28].
4 Hiliau, above n 3, at [21].
6 As described in McDonald v Horn [1995] 1 All ER 961 (CA) at 970 per Hoffman LJ.
7 Buckton, above n 5, at 414–415.
(b) Proceedings brought by some person not a trustee to obtain the Court’s guidance on the operation of the trust deed or the trust’s administration. The same approach is taken to costs as for the first category.
(c) Proceedings brought by a beneficiary making a “hostile claim” against the trustees or another beneficiary. Under this category, the usual principles in relation to costs applies. Ordinarily they would follow the event.
[20] In Alsop Wilkinson (a firm) v Neary Lightman J followed the decisions in Buckton and McDonald v Horn in an application for a prospective costs order for indemnity only and not immunity.8 His Honour identified three categories of dispute:9
(a) “Trust dispute”: a dispute as to the trusts on which the trustees hold the subject matter. Can be either “friendly” or “hostile”. His Honour noted the line between friendly and hostile litigation is not always easy to draw.10
(b) “Beneficiaries dispute”: dispute with one or more beneficiaries as to propriety of actions of trustees.
(c) “Third party dispute”: dispute with persons other than beneficiaries in respect of rights and liabilities assumed by the trustees in the course of the administration of the trust.
[21] His Honour said (regardless of the categorisation):11
In a case where the dispute is between rival claimants to a beneficial interest in the subject matter of the trust, rather the duty of the trustee is to remain neutral and (in the absence of any court direction to the contrary...) offer to submit to the court’s directions leaving it to the rivals to fight their battles. If this stance is adopted, in respect of the costs necessarily and properly incurred
e.g. in serving a defence agreeing to submit to the courts [sic] direction and in making discovery, the trustees will be entitled to an indemnity and lien.
8 Alsop, above n 5; and McDonald, above n 6.
9 At 1223–1224.
10 At 1223 citing Buckton, above n 7.
11 At 1225.
[22] The New Zealand Court of Appeal in Loosley v Powell noted the unique situation of executors in will cases in relation to costs.12 The Court said in its substantive decision:13
...in determining costs in a proceeding challenging a will or aspect of the will the reasonableness of the positions taken by the executors and claimants is central. Although in the end one side is likely to win and other to lose in proceedings, it can often be reasonable in the case of wills for the parties to put their respective positions to the court for a judge to decide on the outcome. Executors are often bound by their duties to propound or contest a position.
[23] In the Loosley proceeding, the Court of Appeal determined the question of costs in a later decision.14 The Court found that even though the executors’ children would have benefitted from a successful appeal this did not affect their acting in a manner consistent with their positions as executors.15 It had also said earlier in its substantive decision, “Mr and Mrs Loosely are properly seen as acting as executors in the proceeding despite their personal interest” (emphasis added).16 And again from the Court’s costs decision: merely because their appeal was unsuccessful did not mean they did not have “sufficient and reasonable grounds”17 to pursue the litigation, which in this case they did.18 Accordingly, the costs of all parties were payable from the estate.
[24] In Fundación Pimjo AC v Aguilar & Aguilar Ltd Katz J made a prospective costs order in favour of a discretionary beneficiary, merely a “nominal plaintiff”, taking a neutral position in hostile litigation between the trustees and a third party alleging breach of trust.19 Her Honour observed the trustee’s neutral role in the litigation justified the order.20 Katz J cited the English text, Underhill and Hayton: Law of Trusts and Trustees, where its learned authors noted that even in the case of
12 Loosley v Powell [2018] NZCA 3, [2018] 2 NZLR 618.
13 At [119].
14 Loosley v Powell [2018] NZCA 73 [Loosley (costs)].
15 At [8].
16 Loosley, above n 12, at [120].
17 Re Paterson, above n 2, at 442–443.
18 Loosley (costs), above n 14, at [7].
19 Fundación, above n 5.
20 At [46].
Buckton category three disputes between beneficiaries, in which trustees take a neutral and passive role and submit to the court’s directions, they will be entitled to costs.21
Submissions
[25] For Mr Eastgate, Mr Ormsby puts his position thus. He is Mrs Walker’s independent, professional executor and an officer of the Court. The purpose of his application for probate in solemn form as I have noted above is to propound what he considers to be her last valid will based on an assessment of all relevant information, and to put that information before the Court for it to make its determination. Mr Eastgate as the applicant has thus far been required to incur the cost of the proceeding since November 2018 when all the parties agreed it was inevitable and necessary. Moreover, Mr Eastgate says he has always accepted that he need not actively participate in the proceeding and can abide the Court’s decision, subject to his obligation to assist the Court.
[26] Mr Ormsby submitted the present case falls within (i) and (ii) of the categories identified by Stringer J in Re Paterson, as outlined at [16] above. That is, the litigation originates in the fault of Mrs Walker (by the state of her testamentary writings) or of those interested in the estate; and/or there is a sufficient and reasonable ground to question the temporal capacity of Mrs Walker, or to put forward a charge of undue influence, in relation to the 2014 Will.
[27] Mr Ormsby accepted that in trust cases, trustees are not usually entitled to their costs in hostile litigation with beneficiaries unless they are successful, as Associate Judge Andrew emphasised in Hiliau. He accepts that in Hiliau, the Court did not make a prospective costs order because it was satisfied the trial judge could properly exercise the discretion by ordering the applicant’s costs be paid out of the trust. However, he submitted that Associate Judge Andrew appeared to conflate the case law relating to hostile litigation in relation to trusts and estates. He said further,
Hiliau was decided without reference to the Court of Appeal’s decision in Loosley v Powell, a decision released more than six months earlier.
[28] He also distinguishes Hiliau on the basis that in that case there was hostility between the competing executors such that there the Court found they were “not in my view truly independent, neutral parties” and that both sides had “strong personal views”. In the present case, Mr Ormsby contrasts the position and says Mr Eastgate is determined to simply assist the Court to determine which of Mrs Walker’s wills is valid, in compliance with his duty as executor to propound the 2012 Will.
[29] Mr Ormsby submits that while this is hostile litigation between the respondents, Mr Eastgate does not take a hostile position himself. He notes KekewichJ’s statement in Re Buckton that: 22
...once convinced that I am determining rights between adverse litigants I apply the rule which ought, I think, to be rigidly enforced in adverse litigation, and order the unsuccessful party to pay the costs.
Thus, unlike what was envisaged in Re Buckton, Mr Eastgate is not himself an adverse litigant. The adverse or hostile litigation is purely between the respondents. His role is to ensure the Court and parties have all relevant evidence, subject to the assistance the Court and the parties require of him.23
[30] Mr Ormsby analogises the role of an executor in a claim under the Family Protection Act 1955 or the Law Reform (Testamentary Promises) Act 1949. The executor will usually file a statement of defence but will abide the decision of the Court. However, the executor remains obligated to provide relevant information and evidence to the Court. He says that is what is seen here.
[31] As a final point, Mr Ormsby notes Mr Eastgate is not seeking an immunity from costs. So to the extent he takes any unreasonable steps, there is a mechanism for the Court to address it later. In all of the circumstances, this is an appropriate case to make a prospective costs order in favour of Mr Eastgate.
22 Re Buckton, above n 5, at 415.
[32] Sharon’s position on Mr Eastgate’s application for a prospective costs order is that such an order should not be made subject to a payment being made from the estate but only for the costs of:
(a) An application to the Court for appointment of an interim administrator.
(b) Administration incurred in gathering and protecting the assets of the estate pending the outcome of the application for probate in solemn form.
(c) Commencing an application for probate in solemn form but only to the extent that such costs can be identified as having been incurred in taking a neutral position by placing the two wills before the Court and thereafter taking a neutral position in the litigation and abiding the outcome.
[33] Mr Brodie submits on Sharon’s behalf that the costs claimed by Mr Eastgate in the application before the Court are in reality the costs of preparing a claim alleging undue influence and want of capacity. He claims the application is launched solely for the benefit of Lois and Warren. These costs should not be awarded as costs in the administration of the estate, but should be seen as costs in contentious litigation which must be awarded in accordance with normal costs rules.
[34] Mr Brodie cites Re Evans (deceased), a decision of the English Court of Appeal.24 There, he highlights that Nourse LJ said as where an executor seeks costs in bringing a probate application, every case turns on its own facts and is essentially for the judge to determine within their discretion.25
[35] He notes that in Re Thomas (deceased) Simon France J said:26
24 Re Evans (deceased) [1986] 1 WLR 101 (CA).
25 At 106.
26 Re Thomas [2019] NZHC 1585 at [29] (unpublished).
[There does not appear to be a case] where a Beddoe order was made in a hostile beneficiary dispute situation. There are not in my view “exceptional” features of this case that support making it the first.
[36] Mr Brodie also notes that Mr Eastgate’s role as executor imposes a duty of even handedness between beneficiaries.27 In the forthcoming litigation, he might properly take no active part and abide the decision of the Court.28
[37] As to his primary submissions, Mr Brodie says the claimed costs which relate in any way to the establishment of the alleged undue influence and want of capacity, must be regarded as costs in hostile litigation that must be left for determination at the disposal of the proceeding. He notes the affidavits and pleadings filed by Mr Eastgate touch on a number of very contentious issues surrounding Mrs Walker’s and Sharon’s personal and financial relationship with each other. He says these documents are clearly aimed at advancing a case in support of allegations of lack of capacity and undue influence. It would be unfair to allow a party in contentious proceedings to have the luxury of an order that their costs are to be paid in full on an indemnity basis, as Sharon would effectively be funding, at least in part, the claim brought against her.
[38] Mr Brodie submits Mr Eastgate has misunderstood his duty as executor. He is not bound to pursue what he considers is a claim of testamentary capacity and undue influence, regardless of the views and wishes of the beneficiaries. Mr Brodie says the beneficiaries were not consulted. There was no letter before action, no request for explanation and no opportunity to put forward countervailing evidence. Mr Brodie says Mr Eastgate has been asked to make files available to Sharon, but he declined.
[39] As to Mr Eastgate’s proper duty as executor, he cites Re Young where Wilson J said:29
In the instant case I am informed that the plaintiffs are uncertain which of the two wills of which they are the executors should be admitted to probate but have no reason to doubt that the earlier will was made by a free and capable testatrix. Their proper course was, therefore, to bring an action for probate in solemn form of law of the later will and, alternatively, (should that be held invalid) of the earlier.
27 Irvine v Public Trust [1988] NZCA 161; [1989] 1 NZLR 67 (CA).
28 Re Sheward [2016] NZHC 1888.
29 Re Young [1968] NZLR 1178 (SC) at 1179.
Mr Brodie therefore suggests Mr Eastgate has a duty to do no more than put the 2012 Will before the Court and leave the parties to litigate any issues arising from it. He says there does not appear to be any authority for Mr Eastgate’s claimed duty to advance the proposition that a later will is invalid, if that will apparently revokes the earlier one.
[40] Mr Brodie notes also that Lois and Warren have not pleaded lack of capacity or undue influence, and instead rely entirely on Mr Eastgate’s pleadings (“to which they have coat-tailed”). He submits it is difficult to reconcile this with an executor’s duty of even-handedness between beneficiaries.
Submissions for Lois and Warren
[41] Mr Clay cites Re Westdock Realisations Ltd as a case where a prospective costs order was granted in hostile litigation.30 The dispute was between a liquidator and receiver to determine how surplus funds were to be dealt with. As a result of the test case nature of the litigation and the complexity of the issue, the costs of the liquidator were ordered to be paid out of the funds held by the receiver.
[42] Mr Clay accepts that the three Buckton categories have been accepted in relation to prospective costs orders by this Court in Fundación Pimjo AC v Aguilar & Aguilar Ltd and Easton v The New Zealand Guardian Trust Ltd.31 However, he submits these cases are to be approached with caution in light of this Court’s decision in McLaughlin v McLaughlin.32
[43] In McLaughlin, Thomas J noted that while the three Buckton categories applied to a prospective costs order, it is now apparent different considerations apply to a Beddoe application. The three categories are not determinative and are simply informative of prospective costs and Beddoe applications.33 Her Honour cast doubt on the assumed requirement of “exceptional circumstances” for the making of Beddoe orders in hostile proceedings, to the extent that had developed as a feature of the test
30 Re Westdock Realisations Ltd (1988) 4 BCC 192 (Ch).
31 Fundación, above n 5; and Easton v The New Zealand Guardian Trust Co Ltd [2016] NZHC 3011.
32 McLaughlin v McLaughlin [2018] NZHC 3198, (2018) 4 NZTR 28-033.
33 At [28].
for making prospective costs orders.34 Ultimately, the test is simply that Beddoe applications are gauged against the fundamental question of what is in the best interests of the trust.35 Her Honour found it difficult to imagine a truly hostile proceeding, such as an allegation of breach of trust with some prospect of success, where it is in the best interests of the trust to fund the proceeding out of its own funds prior to determination of the dispute.36 She doubted whether there would be a materially different result between a prospective costs application and a Beddoe application.37
[44] Mr Clay submits this proceeding falls within category 1 of the Buckton categories and the “trust dispute” Alsop category. However, he contends the proceeding does involve hostile litigation, at least between the respondents.
[45] Turning to the relevant considerations, Mr Clay suggests:
(a) Strength of the applicant’s case: The proceeding has at least, a very real prospect of success. It is supported by two substantial affidavits from solicitors setting out the relevant circumstances surrounding the making of the 2014 Will.
(b) Likely costs at trial: Mr Eastgate is almost certain to be awarded costs even if the application is unsuccessful. He considered he had a duty to issue proceedings and they appear to fall within the second category of Paterson.
(c) Justice of the application: The application is justified and for the benefit of the beneficiaries by bringing a final determination to the matter so as to enable the estate to be distributed.
34 At [27].
35 At [29].
36 At [29].
37 At [29].
(d) Special circumstances: The litigation history of this matter is such that the issue requires prompt resolution by the Court. Clearly it is in the interests of the estate for it to be finally distributed.
[46] And, if any prospective costs order is to be made, he said, however, it should only be:
(a) on a category 2B scale basis; and
(b) to permit Mr Eastgate to incur fair and reasonable costs arising from his carrying out of his duties as executor to propound the 2012 Will.
Analysis
[47] As I see it, Mr Eastgate’s application for solemn form probate of the 2012 Will here falls within the first and second of Stringer J’s categories in Paterson.38 The litigation originates in the fault of those interested in the residue of the estate because the respondents have failed to resolve the dispute between themselves,39 and, arguably there are sufficient grounds to question the capacity of Mrs Walker at various times and to put forward a charge of undue influence.40 Under those categories, Paterson states the “costs may properly be paid out of the estate” and “the losing party may properly be relieved from the costs of his successful opponent.”41
[48] Consistent with the Court of Appeal’s observation in Loosley v Powell regarding the unique situation of wills cases, Mr Eastgate has a duty to propound the 2012 Will,42 as he believes it to be the last valid will of Mrs Walker. The Court said, “[e]xecutors are often bound by their duties to propound or contest a position.”43 In the present case, the respondent children have been unable to resolve their dispute as to which will prevails, and the resulting distribution of the estate. Nothing else was
38 Paterson, above n 2, at 442–443.
39 Paterson, above n 2, at 442.
40 Paterson, above n 2, at 443.
41 At 442–443.
42 Loosely, above n 12, at [119].
43 Loosely, above n 12, at [119].
happening, it seems as the parties had reached a stalemate. Mr Eastgate’s present probate application was inevitable because Sharon earlier had applied for probate of the 2014 Will and Lois had lodged a caveat against that probate being granted. It seems some considerable time had passed thereafter without any action taken by Sharon to seek solemn form probate of the 2014 Will despite the fact that she could have so applied. In those circumstances, properly in my view, Mr Eastgate considered it his duty to put the issue before this Court to make a decision, a decision which no doubt would address a grant of probate in solemn form of either the 2012 Will or the 2014 Will (or indeed any other will that may be appropriate). The Court of Appeal’s decision in Loosely would appear to support this.
[49] As in Fundación, this proceeding does not fall neatly within any of the three Buckton categories.44 Here, the proceeding appears to fall somewhere between categories 1 and 3. Mr Eastgate has brought the proceeding to seek the Court’s guidance on which will is to prevail and the proper administration of the estate. This would indicate it falls into category 1, but the proceeding does really involve a hostile dispute between the respondents for resolution by this Court, indicating category 3. Lightman J’s discussion of the categories in Alsop recognises that there are cases where the dispute is such that the trustee becomes involved in proceedings where the dispute is in substance between rival beneficiaries.45 In such cases, his Honour said the trustee has a duty to remain neutral, to offer to submit to the court’s directions, and to leave it to the rivals to fight their battles.46 Where this is done, the trustee is “entitled to an indemnity and lien.”47
[50] In Fundación, Katz J said the party’s neutral role in the proceeding, which was essentially hostile litigation between “[t]hose involved historically in the administration of the trust”,48 “justifie[d] a prospective costs order in its favour.”49
44 Fundación, above n 5, at [45].
45 Alsop, above n 5, at 1225.
46 At 1225.
47 At 1225.
48 At [45].
49 At [46].
Her Honour said, “[i]t is overwhelmingly clear from the case law that a neutral party will typically be provided with an indemnity from the trust fund.”50
[51] Here, Mr Eastgate in my view is entitled to a prospective costs order to cover his reasonable costs first, in issuing this proceeding, secondly, for both discovery (if this proves necessary) and for preparing necessary materials for the substantive hearing, and thirdly, for his costs in participating as a neutral and passive party at the hearing to assist the Court where necessary. He is a lawyer and professional executor. He says he has taken counsel’s advice and after examining all the available evidence, he has determined there are reasonable and sufficient grounds to consider either that Mrs Walker did not have testamentary capacity or that she was operating under undue influence at the time of execution of the 2014 Will.51 Where the respondent children for some time had taken no effective steps to resolve the dispute between them, it was reasonable, as I see it, that Mr Eastgate acted as he did by filing an application for probate in solemn form of the one will of which he was executor.
[52] Moreover, as Mr Eastgate acknowledges, he has no personal interest in the outcome of the proceeding. The Court of Appeal in Loosley held personal interest is not fatal to a finding that an executor’s decision to propound a will is reasonable and required by their duties.52 But it must be the case that the lack of any personal interest, as here, only further bolsters a legitimate claim to costs. And, in this case, whilst Mr Eastgate seeks for his costs to be paid out of the estate as this litigation progresses, importantly, Mr Ormsby confirms, as I note at [31] above, that Mr Eastgate is not seeking immunity from costs, which can also be sought as part of a prospective costs order. To the extent it might be considered that his actions are unreasonable, therefore, there is a mechanism for the Court to address this if necessary.
[53] As a professional executor with no personal interest in the litigation, he must also take a truly neutral role in the proceeding in what is essentially hostile litigation between those interested in the residue of the estate.53 While the respondent children
50 At [46].
51 See Paterson, above 2; and Loosley, above n 12, at [119].
52 Loosely, above n 12, at [119]; and Loosely (costs), above n 14, at [8].
“fight their battles”,54 Mr Eastgate is to remain neutral and impartial and is simply to provide assistance to the Court when called upon. In his 13 May 2019 affidavit filed in this proceeding Mr Eastgate indicated he had no interest in any particular outcome here and also at para 6 of his affidavit he emphasised that he had no wish to involve himself beyond simply presenting the knowledge and evidence in his possession relating to Mrs Walker’s various wills. On this basis his prospective costs application largely succeeds.
[54] That application, as I have noted, was linked to Mr Eastgate’s application also to be appointed as temporary administrator of Mrs Walker’s estate and to be paid for his fees and disbursements which, as I have noted at [10] were ordered by Dunningham J on 29 May 2019. Mr Eastgate’s fees and disbursements on the temporary administration are therefore covered by that 29 May 2019 order and are not the subject of the prospective costs order which I will make as outlined below. But the costs order to follow is appropriately made for actual indemnity costs and not for just category 2B scale costs as sought on behalf of the respondents here
Orders
[55] There is a prospective costs order made in favour of the applicant, Mr Eastgate, in this proceeding such that, subject to the matters outlined in [53] and [54] above, he is entitled to be paid on a solicitor and own client basis his fees (and those fees of his partners, staff or contractors) and disbursements including the fees of counsel (all amounts to be reasonable under the circumstances here), in respect of his proper role in this proceeding.
[56] As to costs on the opposed prospective costs application itself, reasonable solicitor and own client costs and disbursements on this application of all parties as approved by the Registrar are to be paid from the estate.
[57] Leave is reserved for the parties to revert to the Court again in the event that there is disagreement between them as to the proper costs amounts to be reimbursed to Mr Eastgate under the prospective costs order here.
54 Alsop, above n 5, at 1225.
...................................................
Gendall J
Tavendale & Partners, Christchurch
Copies to:
Jared Ormsby, Barrister, Christchurch Geoffrey Brodie, Barrister, Christchurch Kevin Clay, Barrister, Christchurch
NZLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.nzlii.org/nz/cases/NZHC/2020/1042.html