HITA v HITA [2023] NZHC 3095

HITA v HITA [2023] NZHC 3095 [3 November 2023]IN THE HIGH COURT OF NEW ZEALANDHAMILTON REGISTRYI TE KŌTI MATUA O AOTEAROAKIRIKIRIROA ROHECIV-2021-419-126CIV-2023-419-066[2023] NZHC 3095IN THE MATTER of the Estate of EDWARD WILLIAMBENJAMIN HITABETWEEN EMORA HITAPlaintiffAND SAMANTHA JUNE URAIATA HITADefendantHearing: 24 July 2023Counsel: P A DepledgeDefendant in personJudgment: 3 November 2023COSTS JUDGMENT OF ANDERSON JThis judgment was delivered by me on 3 November 2023 at 3.00 pmpursuant to r 11.5 of the High Court Rules 2016.Registrar/Deputy RegistrarSolicitors: P A Depledge, HamiltonCopy to: Defendant[1] This is a costs judgment following my substantive judgment concerning thewill of Mr Edward Hita.1[2] Edward died leaving five children, including Samantha and Emora. His willappointed Samantha as executor and left all of his estate to her.2 My substantivedecision addressed the following claims by Emora:(a) in CIV-2021-419-126 (the Will Proceeding), an application for recall ofprobate and for letters of administration to be granted in her favour onthe basis that the will was executed under undue influence fromSamantha;3 and(b) in CIV-2023-419-066 (the Family Protection Proceeding), for ordersunder the Family Protection Act 1955 on the basis that Edwardbreached his moral duty and for the Court to remedy any inadequacy.[3] Samantha was self-represented throughout. Emora is legally aided. She wasrepresented by Mr Depledge.[4] The Family Protection Proceeding was initially filed in the Family Court.Samantha applied to strike out both this and the Will Proceeding. Both strike-outapplications were dismissed. The Family Protection Proceeding was later transferredfrom the Family Court to be heard together with the undue influence claim.[5] During the hearing, I granted leave to add a secret trust claim to the WillProceeding. This development came after I raised this as an issue with counsel. Thehearing took one and a quarter days.[6] Ultimately, I held that neither of the claims in the Will Proceeding were madeout. I was satisfied that the will was not executed under Samantha's undue influence.The fact that Edward left nothing to his other four children was an unexpected decision1 Hita v Hita [2023] NZHC 2171 (the substantive decision).2 To avoid confusion among family members with the same name, I refer to all members of the Hitafamily by their first names.3 A claim in the Will Proceeding that the will was invalid was not pursued in evidence or at thehearing.requiring scrutiny. However, the evidence demonstrated that Edward had left all hisestate to Samantha on the assumption that she would do the right thing by her siblings.4[7] I found that this was a moral, not trust obligation. The secret trust claim failedon that account and because the pleaded trust was that Samantha was required todistribute Edward's estate to his children equally. The evidence supported only thatEdward was leaving his estate for Samantha to decide how it was to be distributed.[8] However, Emora was successful in the Family Protection Proceeding. I madean order under s 4(1) of the Family Protection Act that she should receive $55,000(about 15 per cent) of the net estate.Parties' position on costs[9] The parties' contentions on costs are referable to the following annexures toEmora's submissions:(a) A schedule for costs at the 2B District Court scale for the FamilyProtection Proceeding for steps prior to the matter being transferred tothe High Court. These total $4,870.50.(b) A schedule for High Court costs on a 2B basis for steps in the HighCourt (not distinguishing between the proceedings) totalling$40,749.50.(c) A schedule of costs on a 2B basis for Emora's successful opposition toSamantha's application to strike out Emora's claim in relation to undueinfluence/the will. These total $6,214.00. They are set out separatelyfrom the schedule of High Court costs, because in the strike outjudgment, Gault J awarded Emora costs on a 2B basis plusdisbursements.54 At [29].5 Hita v Hita [2023] NZHC 752 at [24].(d) Communications with the Legal Services Commissioner confirmingthat Emora's total actual costs were $25,586.53 (including GST).[10] Mr Depledge submits that as the successful party, Emora is entitled to costs.However, Mr Depledge acknowledges that Emora's actual costs are less than the 2Bscale costs.6 Emora seeks this lower amount of $25,586.53. However, additionallyshe seeks costs of $6,214,7 being the 2B scale costs separately awarded in the strikeout application. Costs are sought out of Edward's Estate.[11] Samantha emphasises that Emora was unsuccessful in her claims other thanthe Family Protection Act claim. She consents to costs of $4,870.50 being awardedbut nothing further, representing the District Court 2B scale costs for the FamilyProtection Proceeding prior to the matter being transferred to the High Court.8[12] Both parties also refer to various correspondence over the course of theproceeding to support their position on costs.Legal principles[13] Costs are at the discretion of the Court.9 In exercising that discretion, the Courtmust have regard to the principles set out in r 14.2 of the High Court Rules 2016. Ofparticular importance is the principle that the party who fails in respect of a proceedingor an interlocutory application should pay costs to the party who succeeds.10 However,by r 14.2(f) an award of costs should not exceed the costs incurred by the partyclaiming costs.11[14] In matters of estate litigation, it has long been recognised that what wouldotherwise be the usual approach to costs in civil litigation may be displaced. In theleading case of Re Paterson, Stringer J said:126 Refer [9(a)-(b)] above.7 Refer [9(c)] above.8 Refer [9(b)] above.9 High Court Rules 2016, r 14.1(1).10 Rule 14.2(1)(a).11 Rule 14.2(1)(f).12 Re Paterson [1924] NZLR 441 (SC) at 442-443.(i) If the litigation originates in the fault of the testator—e.g., by the state inwhich he left his testamentary writings, or by his eccentric or irrational habitsand mode of life—or of those interested in the residue, the costs may properlybe 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, toquestion either the execution of the will or the capacity of the testator, or toput forward a charge of undue influence or fraud, the losing party mayproperly be relieved from the costs of his successful opponent. (iii) Unless thecircumstances of the case are such as to bring it within one of the foregoingexceptions, the general rule that costs should follow the event ought to prevail[15] The Court of Appeal recently applied Re Paterson in Gorringe v Pointon.13How the principles apply is very fact specific.14Incidence of costs[16] Samantha is not only the sole executor but sole beneficiary. The claims wereagainst the Estate. I agree with Mr Depledge's submission that any costs award shouldbe payable from the Estate. Samantha did not suggest otherwise.[17] I first consider who was the successful party. In the present case, Emora wassuccessful in the Family Protection Proceeding but not the Will Proceeding. The secrettrust claim in the Will Proceeding emerged only during the hearing. It was a rabbit setrunning by me. That cause of action required no further evidence and limited furthersubmission. I do not consider it has materiality for costs purposes. The other causeof action pursued in the hearing was the undue influence claim. This did have animpact on costs.[18] It has been held that where several claims are advanced and one or moresucceed, the plaintiff can be regarded as the successful party in that there was ameasure of success.15 Here, there are two proceedings which were originally separateonly for jurisdictional reasons. They were then heard together, as the facts of bothwere intertwined. In light of that overlap, I treat Emora as the successful party givenher success in the Family Protection Claim. However, the fact that Emora was not13 Gorringe v Pointon [2023] NZCA 426.14 Case law examples of the first principle are set out in Dodssuweit v Olivier [2019] NZHC 2707 at[13].15 Weaver v Auckland Council [2017] NZCA 330, (2017) 24 PRNZ 379 at [26].successful on all claims should be reflected in some discount to scale costs. I comeback to this below.[19] I next need to consider Mr Depledge's submissions on Re Paterson. Hesubmits that "the litigation originate[d] in the fault of the testator"16 within the firstprinciple in Re Paterson, displacing the usual rule that costs follow the event. Thiswould presumably include any discount to scale costs that I make on account ofunsuccessful claims. He relies on comments in my substantive decision whereI expressed residual concerns as to whether the will reflected what Edward intended,noted that it was a pity that Edward did not obtain advice, and suggested that this mayhave avoided the current contest.17[20] I do not agree that the proceedings are due to Edward's fault in the sensecontemplated in Paterson. Edward went to the effort to obtain a will. The will issufficiently clear. I have held that it is not affected by undue influence. There are nofindings that the will does not reflect what Edward intended. The fact that legal advicewould have been prudent is not of a character to engage the principle in Paterson.[21] Mr Depledge also relies on the second principle in Paterson. This relieves aparty from paying costs where the plaintiff is unsuccessful in estate proceedings ifthere were sufficient and reasonable grounds for pursuing the claims. He argues, andI agree, that it was reasonable for Emora to bring the proceedings with all the claimsmade, including the unsuccessful claims. If applicable, the principle would mean thatEmora would not be required to pay costs to Samantha. However, this principle isirrelevant in the current case. Samantha is not seeking costs. Moreover, I have takenan approach which views the proceedings as intertwined, and Emora as the successfulparty, albeit discounting costs to reflect that she was not wholly successful.Costs assessment[22] Turning to the assessment of costs, I propose to adopt the approach of Young Jin Taunoa v Attorney-General (compensation) to a legally aided plaintiff: 1816 Re Paterson, above n 12.17 The substantive decision, above n 1, at [107].18 Taunoa v Attorney-General [compensation] (2004) 8 HRNZ 53.[43] I consider the proper approach here is to identify the proper category andband, calculate the total costs payable on that basis, reduce them by anappropriate percentage, in this case to reflect partial success only, and thencompare this figure with the total fees payable to counsel from the LegalServices [Commissioner]. If the scale fees exceed the Legal Services paymentthen [r 14.2(f)] applies.[23] There is no dispute that 2B is the appropriate category and band.[24] The total costs potentially payable at scale comprise three components. First,the sum of $4,870.50 represents scale costs for the steps taken in the Family ProtectionAct proceeding in the Family Court, prior to the transfer of that proceeding to the HighCourt. I reject Samantha's submission that costs should be limited to this. This sumdoes not include any costs of pursuing the Family Protection claim in the High Court.There is no allowance in it for affidavit evidence, common bundle preparation, hearingpreparation or attendance at the hearing.[25] Second, the total of High Court scale costs is calculated at $40,749.50. Of thisfigure, $22,227.00 is referrable to steps in the Will Proceeding before the FamilyProtection Proceeding was transferred to the High Court. I propose to discount scalecosts so as not to include these costs because they related to unsuccessful claims. Thebalance of $18,522.50 is for steps afterwards associated with evidence, the commonbundle, preparation and appearances calculated as one set of costs for bothproceedings. I reduce these scale costs by 15 per cent to reflect the partial success.That gives scale costs of $15,744.13 for steps following the transfer of the FamilyCourt proceeding to the High Court.[26] Third, Gault J directed scale costs on a 2B basis on the strike out application.19These costs are $6,024.00. Contrary to submissions made by Samantha, Emora isentitled to the benefit of that decision notwithstanding she did not succeed on hersubstantive claims. It was an unnecessary interlocutory application.[27] Gault J does not appear to have been aware that Emora was legally aided andas to what actual costs she incurred. Based on overall costs, it is likely they were lessthan scale costs. Gault J's decisions stands. However, I do not accept that Emora19 Hita v Hita [2023] NZHC 752 at [24].should be entitled to these costs plus her full actual costs as Mr Depledge appears tosubmit. I have regard to the principle in r 14.2(f) when I come to assess the total costsaward.[28] The total scale costs are therefore $26,638.24 comprising the following:(a) $4,870.50 for steps in the Family Court;(b) $15,744.13 for steps in the High Court (other than the strike out); and(c) $6,024 reflected in Gault J's costs award on the strike out.[29] This exceeds Emora's actual costs of $25,586.53. In my view, it is appropriateto award Emora no more than that sum.20 To the extent that this needs to account forthe award already made of scale costs of $6,024 for the strike out, I limit the aggregatecosts recoverable for the other scale costs (in [28(a)–(b)] above) to a recovery cappedby the total costs incurred.Parties' communications[30] The parties referred me to various communications said to be relevant to thecosts issue. I do not agree that they are.[31] Mr Depledge highlights that Samantha rejected settlement proposals put to herand did not enter into settlement discussions. He argues that Emora's FamilyProtection Act claim was obvious and Samantha's conduct as executor wassignificantly influenced by her concern to protect her own personal interests as thebeneficiary. The communications are of no significance given that I am awarding thefull costs Emora incurred. In any event, the first communication written at the outsetwas not in the nature of an offer, let alone a Calderbank offer. It does not have a costconsequence. The second communication made an offer, but was made on the eve oftrial. It was at such a late stage as to have minimal impact on a costs award. The letteralso sought more than the sum received in the proceeding.20 Taunoa v Attorney-General (compensation) at [45].[32] Samantha relies on letters she sent to Emora (through Mr Depledge) and to herother siblings. The letters inform them that Edward's estate will not be liable for anycosts incurred in relation to his estate unless they were incurred by Samantha.Samantha cannot unilaterally exclude Emora's costs claim. This correspondence isalso irrelevant.Orders[33] Costs and disbursements21 of $25,586.53 are awarded to Emora to be paid outof the Estate of Edward Hita.[34] Samantha requested that I give her time to realise funds out of the Estate tomeet a costs award given that its only asset is real property. I do not consider that thiscosts judgment is a proper forum for questions about delaying enforcement. I do nothave sufficient information on steps that could be taken by Samantha in any event.Nor have I heard from Emora on this issue. I decline to make any order as to timing.Anderson J21 Although the annexures provided by Emora separately listed disbursements, the total paid toMr Depledge as legal services provider was $25,586.53, which I understand to includedisbursements (Legal Services Act 2011, s 97 and 106).