MCKINNON AND ORS V MACDUFF AS EXECUTRIX IN THE ESTATE OF PETER LEYS CHIGNELL HC CHCH CIV-2006-409-003030

MCKINNON AND ORS V MACDUFF AS EXECUTRIX IN THE ESTATE OF PETER LEYS CHIGNELL HC CHCH CIV-2006-409-003030 4 July 2007IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY CIV-2006-409-003030UNDER the Family Protection Act 1955 AND UNDER the Matrimonial Property Act 1963 IN THE MATTER OF the Estate of Beryl Daisy Chignell BETWEEN AVENAL BERYL ELIZABETH MCKINNON TRACEY OWEN GOUGH HARCOURT DAVID GOUGH ANTHONY GOUGH Appellants AND ALISON KEILLER MACDUFF AS EXECUTRIX IN THE ESTATE OF PETER LEYS CHIGNELL Respondent Hearing: 28 May 2007 Appearances: NRW Davidson QC for Appellants D H Hicks for Respondent A Segaran for Trustees Judgment: 4 July 2007RESERVED JUDGMENT OF HON. JUSTICE JOHN HANSEN[1] This was an appeal against a costs order made by Judge Walsh in the Christchurch Family Court dated 22 November 2006. Mr Segaran, on behalf of the trustees, made no submissions. [2] Mrs Gina Williamson, along with her husband, appeared on her own behalf. She has been expressing concerns for some time that in the Family Court proceedings, and in the initial notice of motion of appeal, she was named as plaintiff and respondent respectively. This was in her personal capacity. By order dated 7February 2007 Fogarty J, in this Court, amended the name of the respondent to Alison Keiller MacDuff as Executrix in the Estate of Peter Leys Chignell. [3] However, Mrs Williamson continues to have genuine and reasonable concerns in relation to the Family Court decision. On a number of occasions she has written to the Family Court in relation to this matter. Apparently, an application had been made to change the name of the plaintiff in the Family Court, but due to error this was not dealt with. Her efforts to have the matter corrected were ultimately referred to the Judge, who responded:I have considered Gina Williamson's letter of 10/2/07. I entirely accept that an error occurred with respect to the naming of Gina Williamson as "plaintiff", and unreservedly apologise to Gina Williamson for my oversight.[4] Unfortunately, the Judge did not take the obvious step of recalling his judgment and amending the name of the plaintiff to correct the error. [5] In this Court none of the parties objected to my making an appropriate order. Accordingly, pursuant to the inherent powers of this Court, the name of the plaintiff in the Family Court proceeding, including the judgment, is amended to be that of Alison Keiller MacDuff of Christchurch, Solicitor, as Executrix in the Estate of Peter Leys Chignell. [6] The Judge dealt with costs as follows:[101] Although the plaintiff has been unsuccessful the question of costs is at the Court's discretion. [102] However, I have been driven to the conclusion that, as the plaintiff commenced these proceedings in her role as an attorney on behalf of her father when he was alive but incapacitated by his ill health, that it is only fair and just, after considering all matters, that there be no order for costs against the plaintiff and that all parties costs be borne out of Beryl's estate.[7] It is apparent that the reserved decision was delivered some seven months after the hearing. Somewhat surprisingly for a reserved decision, memoranda as to costs were not called upon from the parties. I understand that costs were not fully addressed at the hearing.[8] On behalf of the appellants Mr Davidson accepted that the proceedings were properly issued in the Family Court by Mrs Williamson as attorney for her father. This was by way of statement of claim dated 31 January 2002. The late Mr Chignell died on 12 July 2002. Mr Davidson accepts that costs up until his death are properly borne by the estate. But his submission is that after that the proceedings were continued, not for his benefit, but for the benefit of his beneficiaries. He said in those circumstances, coupled with the merit findings made by the Judge, the estate should not have to bear the plaintiffs' costs in the Court below. [9] However, Mr Hicks submitted that the discretion to award costs in the Family Court is extremely wide, and that the Judge properly exercised his discretion in the costs award he made. He referred to the usual practice that the costs of parties are borne out of the residue of the estate. [10] It is apparent that upon the death of Mr Chignell the Family Protections proceedings had no chance of success. The basis for them had gone. As far as the Matrimonial Property proceeding, Mr Davidson's submission that they were to the benefit of the beneficiaries must be correct. [11] Turning to the merits of the matter, the Judge's findings are emphatic:[75] I find after considering all matters that the plaintiff has not proven on the balance of probabilities that Peter made contributions of a qualitative nature to improve, enhance or maintain 105 Dyers Pass Road, 15 Webb Street, Beryl's household chattels or her cash savings during their relationship. I find that Peter and Beryl were two elderly persons in their twilight years who decided to marry and live together having agreed that they would equalise outgoings and maintain their respective capital positions. [76] I find it of significance that the plaintiff in her last affidavit claimed that her father "had a regular cashflow, whereas Beryl did not, so sometimes his funds were used first on the basis of sheer availability". The plaintiff has conveniently ignored the fact that Beryl was contributing an annuity of $60,000.00 per annum from Gough Gough and Hamer together with her National Superannuation and some investment income. Unfortunately, I find that the plaintiff's affidavit on this point paints a distorted picture concerning the parties' income. [77] I prefer Mrs Bartlett's evidence that she did have a close and personal relationship with Beryl notwithstanding the plaintiff's attempts to minimise the extent of that relationship in her last affidavit. I accept entirely Mr McVeigh's submission that "historically" Mrs Bartlett had a much closerand more intimate relationship with Beryl in start contrast to the Williamson's relationship.And further, at [85]:[85] In summary, I find that there is no justiciable property and I therefore find against the plaintiff on this ground. In short, Peter brought no capital assets into the marriage, he enjoyed a financially subsidised existence, a home, a lifestyle where outside employment provided Peter and Beryl with cooking, gardening and cleaning and he was gifted $50,000.00. After eight years of marriage, Peter became seriously ill and his health deteriorated resulting in hospitalisation for periods of time. [86] With respect to the Punakaiki property, I prefer Mrs Bartlett's and Mrs Ford's evidence that initially Peter was keen to accompany Beryl to this property for holidays, but over the last five years of his life he simply lost interest. For Peter, the Punakaiki property simply did not hold the same close attachment that Beryl had to it. This was reflected in her decision to gift the property to Mrs Bartlett.[12] In relation to the Family Protection claim, the Judge had this to say:[87] I do not find that Beryl was in breach of her moral duty to Peter by the provisions that she made for Peter in her final will. [88] In my view Beryl's will was prepared after considerable thought and reflection and, advice from her trusted professional advisers. [92] In summary, Peter had the use of the house for his lifetime, he had power to resort to capital and assets of approximately $290,000.00. I find that Peter was very well provided for by Beryl in a carefully considered will. This is further confirmed by the provision in clause 8 that the income that the residuary estate would pass to Peter during his lifetime and resort to capital could be made. Beryl's concern is expressed in these terms: In exercising these powers, my Trustees' first concern should be my husband's comfort and welfare. My Trustees should regard the need to maintain my husband's standard of living as more important as the need to preserve the capital of my residuary estate. [93] I find that Beryl was fully aware of her husband's financial limitations and vulnerability and, the above-mentioned wording of clause 8 illustrates her generosity of spirit in ensuring that her husband was properly looked after upon her death.[13] It is true that the learned authors of Patterson's Law of Family Protection and Testamentary Promises (3rd edition) at paragraph 17.40 say:The usual practice with regard to applications under the Family Protection Act 1955 is for the Court to order that the costs of all parties shall be borne out of the residue of the estate of the deceased; but this is not a universal practice[14] However, in Re Blakey [1957] NZLR 875, North J stated:I cannot allow it to be assumed that people who come along and make applications under this Act can do so in the confident hope that, even if they do not succeed, at least they will get their costs.[15] To like effect is the decision in Lewis v Cotton [2001] 2 NZLR 21. At [62], Blanchard J, in delivering the decision of the Court, stated:Whilst Gae is understandably very disappointed at not being treated more generously by her father, she has not proved any breach of moral duty in terms of the Family Protection Act. The Court does not undertake the exercise of rewriting a will merely because it can be perceived as being unfair to a family member who is not actually in need of maintenance and support. Whilst Susan and Graeme, particularly the latter, have been much better treated, it is not for them, as a matter of law, to have to justify what they have been given by their father in circumstances where no breach of any moral duty to Gae has been shown.[16] Further examples are gathered in Lexis Nexis Family Law Service – Family Protection, paragraph 7915, page 8, 803, 801. [17] In Re Miller (HC AKLD M60/SD00, unreported 2 April 2001, Rodney Hansen J) the Court stated that at some times a successful applicant would be required to meet their own costs. Rodney Hansen J saw no reason why Family Protection proceedings should be excluded from the operation of general principles as to costs set out in r47 of the High Court Rules. [18] I accept there is a wider jurisdiction in r45 of the District Court Rules as Mr Hicks submitted. However, as a matter of principal I consider the Judge should have called for detailed submissions as to costs, rather than deal with the matter in the way he did. Furthermore, I consider there is an error of principal in a case like this. It is quite clear that after the death of Mr Chignell, which was long before the eventualhearing of this matter, that the hearing was unmeritorious. This is emphatically confirmed in Judge Walsh's decision. [19] Accordingly, I am satisfied the appeal should be allowed. The respondent is entitled to costs from the estate up until the death of Mr Chignell. I consider it appropriate that proper consideration should then have been given as to whether it was proper to proceed, and a further month allowed to enable that to take place. However, thereafter the costs should not have been awarded out of the estate. Lewis v Cotton is apposite in this context. [20] Accordingly, there will be an order that no costs be awarded from the estate to the plaintiff from the period one month after Mr Chignell's death until judgment. [21] I note that the notice of appeal does not seek costs on the appeal. I assume in those circumstances it is considered that costs should lie where they fall on the appeal. [22] If that is not the case the parties are invited to file memoranda as to costs of the appeal within ten working days of the handing down of this judgment.Solicitors: Anthony Harper Lawyers, Christchurch D H Hicks, Christchurch Rolton MacDuff, Christchurch Cameron & Co, Christchurch