Re estate COUSINS [Costs] [2021] NZHC 615

Re estate COUSINS [Costs] [2021] NZHC 615 [25 March 2021]IN THE HIGH COURT OF NEW ZEALANDDUNEDIN REGISTRYI TE KŌTI MATUA O AOTEAROAŌTEPOTI ROHECIV-2020-409-000364[2021] NZHC 615UNDER Section 14 of the Wills Act 2007IN THE MATTER of an application by HELEN IRENEDAVIDSON for an order that a document bedeclared the valid Will of the deceasedJANICE LEE COUSINSHearing: On the papersAppearances: J C D Guest for ApplicantR J Little for RespondentJudgment: 25 March 2021JUDGMENT OF DOOGUE J[Costs]This judgment was delivered by me on 25 March 2021 at 2.30 pm pursuant to Rule11.5of the High Court RulesRegistrar/Deputy RegistrarDate:Introduction[1] This is an application for costs by both the applicant and the respondentsfollowing my judgment dated 18 February 2021.[2] The applicant, Helen Irene Davidson (Ms Davidson), a lawyer practising inDunedin, was successful in her application for a declaration pursuant to s 14 of theWills Act 2007 (the Act) declaring a draft will to be the valid will of her deceasedclient, Janice Lee Cousins (Jan).[3] The respondents, who are members of Jan's family, had argued that:(a) there was a complete absence of evidence establishing that the draftwill prepared by Ms Davidson represented Jan's actual testamentaryintentions; and(b) equally fundamentally, that she lacked testamentary capacity to make awill in any event.[4] An additional factor in this case was the respondents' raising serious questionsconcerning Ms Davidson's legal craft and her propriety. They lacked completeconfidence that the draft will accurately reflected Jan's instructions.[5] The respondents seek to displace the dual presumptions that costs follow theevent and that the losing party should pay costs to the successful party.1 They seek tobe awarded costs on a 2B basis from the estate for "properly opposing" the applicationand assisting the Court to determine whether the will should have been validated ornot.[6] Both counsel agreed that the three general rules identified in the Law of Costs2and referred to in cases such as Wardill & Anor v Anderson & Anor3 and Harris v1 High Court Rules (2016), rule 14.2(1)(a).2 G E Dal Pont Law of Costs (3rd ed, Lexis Nexis, Australia, 2013).3 Wardill & Anor v Anderson & Anor [2016] NZHC 306.Taylor4 are applicable as authority for the long-standing principle that, unless there areexceptional reasons, costs should follow the result.Applicant's submissions[7] The applicant seeks costs on a 2B basis in the sum of $13,145.[8] This is less than the applicant's actual costs incurred arising from instructingcounsel. The applicant does not claim for her own specific attendances to thislitigation as opposed to the administration of the estate.[9] The applicant's position is simply this:(a) although putting the applicant to proof of a document expressingtestamentary intentions, the unsigned will was on its face such adocument and, at the latest, by the time all affidavits were filed therespondents should have ceased defending the matter; and(b) the respondents alleged lack of testamentary capacity without anyreasonable basis for doing so and even by the time of the court hearingthey had no tenable evidence to support such an allegation.[10] Further, the applicant says that in these circumstances although there aregrounds for an increased award, if not indemnity costs, the applicant takes a morenuanced approach in seeking only costs at scale, acknowledging the level of concernand reasonable enquiry by the respondents (but short of the litigation that they caused),coupled with the fact that the final impact will be on the residuary estate, beingbequests to charities.[11] Finally, Mr Guest, for the applicant, also submitted that there is a moderateelement of public interest in not encouraging aggressive and unsubstantiatedchallenges to applications under s 14.4 Harris v Taylor [2016] NZHC 483.Respondents' submissions[12] The respondents' counsel, Mr Little, submitted that the primary ground foropposition to the application related to the lack of cogent evidence required to showthat the draft document could be validated as a will. In particular, whether the willreflected Jan's final testamentary intentions. Thus he submitted that thecross-examination of Ms Davidson was necessary to clarify whether the draft willrepresented Jan's final testamentary intentions.[13] Second, he submitted that the lack of testamentary capacity was always asecondary issue as outlined in the initial memorandum of counsel for the telephoneconference.[14] Third, Mr Little submitted that Jan's conduct, which meant that over a periodof months the will was not executed, directly caused the litigation.Discussion[15] Notwithstanding his attempt to categorise it otherwise in his submissions,Mr Little did cross-examine Ms Davidson on behalf of the respondents in a significanteffort to impugn Ms Davidson on the basis of previous litigation and a historicdisciplinary matter. He sought to impugn both her professionalism and her integrity.[16] The respondents submitted that the professional charging clause, which sawthe work that she did as executor of the will, was Ms Davidson's motivation forbringing the application to validate a will.[17] It was particularly unfortunate that the respondents should make an allegationthat a lawyer would be motivated in making an application such as this solely on thebasis of being the named executor and being given the authority to charge foradministering the will.[18] Charging provisions are commonplace when lawyers are appointed asexecutors under a will. It would be extraordinary and unreasonable to suggest that alawyer, or lawyers, were acting unprofessionally in each case where they were namedas executor and given the authority to charge for the purpose of administering wills.Had that been the sole ground on which the application was brought, I would haveconsidered that to be a ground for an increased award of costs to the extent of fullindemnity costs against the respondents.[19] Here I acknowledge that, given Ms Davidson's history, it was not illegitimatefor the respondents to have a level of concern and a need to make a reasonable levelof enquiry about the draft document.[20] Another complicating factor is that Ms Davidson did not provide to hercounsel, Mr Guest, all the relevant information contained within her file notes untilthe day of hearing when, under cross-examination, she revealed she had not disclosedall relevant documentation pertaining to the matter. I directed her to return to heroffice to retrieve them and bring them to court to make them available to Mr Guest,Mr Little and the Court.[21] Had the full gamut of this material been made available to the respondentsduring discovery or after the filing of the notice of opposition and supportingaffidavits, but before the first case management conference, the process aroundMs Davidson taking Jan's instructions would have been made clear to the respondentsand they may not have proceeded with their defence. I disagree, therefore, with theapplicant's position that the proceedings were continued without proper enquiry intothe facts and without reasonable grounds.[22] I find there is no basis for placing any blame on Jan. She was getting her affairsin order as part of shifting to Christchurch. There was no material delay on her partor the part of her lawyer and it was entirely a coincidence and unfortunate that shedied unexpectedly.[23] I agree with the applicant's submission that there is a moderate element ofinterest in not encouraging aggressive and unsubstantiated challenges to applicationsunder s 14.[24] The respondents submitted that there is public interest in ensuring potentiallyisolated persons' estates are not distributed without a full investigation into the factsof an alleged will without corroborating evidence. I do not disagree with that.However, there are certain aspects of the respondents' case that are extremelyunfortunate, such as the baseless suggestion that a professional lawyer would takeadvantage of someone to become an executor in order to receive fees from a chargingclause within the will. Whilst in principle I agree with the respondents' generalproposition, in this instant case I do not consider it applies.[25] I do not need to deal with the allegation that Jan lacked testamentary capacity.This allegation did not in and of itself protract the proceedings. The first ground wasadvanced as the primary ground and it was legitimate for the respondents to pursue itto hearing, particularly where Ms Davidson does have some unfortunate history anddid not disclose all relevant material until she was requested to do so by the Court.Summary[26] Taking all the preceding unique factors into account, the respondents were, inthe circumstances, legitimately entitled to all information around the creation of thedraft will and arrangements for its execution.[27] The full panoply of file notes was not provided by Ms Davidson to her counselor the respondents until during the hearing. That was, according to her viva voceevidence, because she did not think that they were relevant.[28] Had they been provided to Mr Guest and the respondents at an earlier stagethat ground of the defence may not have been advanced at hearing.[29] That is, in my view, why exceptional reasons exist to depart from the generalprinciple that costs should follow the event. In this case I consider both the applicant'sand respondents' costs should be met from the residuary estate.Result[30] I make the following award of costs:(a) Scale costs on a 2B basis amounting to $13,145 to the applicant; and(b) Scale costs on a 2B basis of $11,233 to the respondents.Doogue JSolicitors:Klinkert Law, DunedinEagles Eagles & Redpath, Invercargill