LOOSLEY AND ANOR v POWELL & ORS [2018] NZCA 73

LOOSLEY AND ANOR v POWELL & ORS [2018] NZCA 73 [28 March 2018]IN THE COURT OF APPEAL OF NEW ZEALANDCA168/2017[2018] NZCA 73BETWEEN JENNIFER LOOSLEY AND ROBERTGEORGE LOOSLEY AS EXECUTORS OFTHE ESTATE OF ALLISON SLATERAppellantsAND KATHERINE ANNE POWELL,BENJAMIN EDWARD POWELL,BARBARA ANNE POWELL, JILLROSEMARY ELEVELD AND MARKELEVELDRespondentsCourt: French, Cooper and Asher JJCounsel: A F Grant and H G Holmes for AppellantsP J Morgan QC and W J Scotter for RespondentsJudgment:(On the papers)28 March 2018 at 11:30 amJUDGMENT OF THE COURTThe appellants and respondents are each entitled to costs for a standard appealon a band A basis and usual disbursements, to be paid out of the estate. We certifyfor two counsel for each side.____________________________________________________________________REASONS OF THE COURT(Given by Asher J)Introduction[1] This Court, in its judgment of 2 February 2018, dismissed the appeal of theappellants Jennifer and Robert Loosley.1 The High Court had recalled probate of awill made by Allison Slater on 2 May 2014, because she lacked testamentary capacity.2We said in relation to costs in this Court:3[125] We received submissions on costs at the end of the hearing, at ourrequest. Having reflected on the matter we think it only fair that the partieshave the opportunity of addressing the question of costs in the light of thisjudgment. We invite submissions [2] We have now received the submissions for the parties. Mr Morgan QC, for therespondents, seeks costs from the appellants in their personal capacity, rather than asexecutors. He contends they should be personally liable to pay costs on the appealbecause they were effectively acting for their sons who are residuary beneficiaries,and not in their capacity as executors.[3] Mr Grant for the appellants resists this submission. He points out that such aresult would be contrary to the decision of Courtney J as to costs in the High Court.4He submits that the appellants were carrying out their duties as executors when theyresisted the claim and brought the appeal. We record that in both the oral and writtensubmissions counsel have been seeking scale costs and not indemnity costs.[4] In her costs decision in the High Court Courtney J observed, on the issue oftestamentary capacity, that the litigation was largely attributable to Allison's ownconduct.5 In that context she clearly saw the appellants as acting as executors.6 Shestated:[22] Mrs Loosley certainly had an interest in the proceeding as abeneficiary as well and would have been entitled to participate in theproceeding to advance that interest. But her participation as a defendant wasadvanced in tandem with her husband, who was not a beneficiary, and wasconsistent with their positions as executors. I am satisfied that Mr Grant's1 Loosley v Powell [2018] NZCA 3.2 Farn v Loosley [2017] NZHC 317, [2017] 3 NZLR 383.3 Loosley v Powell, above n 1.4 Farn v Loosley [2017] NZHC 1951.5 At [14].6 At [22].representation of the defendants was related to their status as executors andthat the calculation of costs should include the costs of that representation.[5] Although Courtney J's costs judgment was challenged on appeal before us,there was no dispute as to this finding.Our analysis[6] This Court has an overriding discretion as to costs in all proceedings and aregime is set out in the Court of Appeal (Civil) Rules 2005 (the Rules).7 The approachto costs in proceedings involving contested wills is not referred to in the Rules but isregarded as settled by the statement of Stringer J in Re Paterson (Deceased) where heobserved, following English authority:8(i) If the litigation originates in the fault of the testator — eg 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 to putforward a charge of undue influence or fraud, the losing party may properlybe 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.[7] The usual position under r 53A(a), that the person who has failed in thelitigation pays costs, is modified by the Re Paterson approach, applied by the Court inits overriding discretion. In this case the will-maker had made a will, the appellantswere the executors, and the beneficiaries under that will might well have had a soundbasis for complaint if the executors had not defended her will against allegations ofinvalidity because of mental incapacity. There were arguments that properly could berun by the appellants in support of the will of 2 May 2014, and these were run. The factthat they failed does not mean that there were not "sufficient and reasonable grounds",in terms of Re Paterson, to pursue the litigation.9 In this regard we apply the sameapproach of Courtney J, which although this was an appeal, in the circumstancesremains applicable.7 Court of Appeal (Civil) Rules 2005, r 53.8 Re Paterson (Deceased) [1924] NZLR 441 (SC) at 442–443, citing Mitchell v Gard (1863) 3 Sw& Tr 275 and Spiers v English (1907) P 122.9 Re Paterson (Deceased), above n 8, at 442.[8] It follows that the appellants, in resisting the claims of mental incapacity andin bringing this appeal, were acting in a manner consistent with their positions asexecutors. The fact that their children would have benefitted from a successful appealas residuary beneficiaries cannot be seen as having cancelled their position and dutiesas executors.[9] We have reached the view therefore that the costs of all parties in this Courtshould be payable from the estate. Obviously the respondents should have their costspayable by the estate because they were successful.[10] There was also an appeal against Courtney J's costs judgment, heard andconsidered together with the substantive appeal on testamentary capacity. The appealon costs was dismissed. The respondents seek an allowance for costs in respect of thatappeal. However, that issue took little time before us, and we do not consider that anyparticular costs award under that head is warranted.Result[11] The appellants and respondents are each entitled to costs for a standard appealon a band A basis and usual disbursements, to be paid out of the estate. We certify fortwo counsel for each side.Solicitors:Duthie Whyte, Auckland for AppellantsHarkness Henry, Hamilton for Respondents