MILNE AND FLANNAGAN V CAMPBELL HC PMN CIV-2005-545-070

MILNE AND FLANNAGAN V CAMPBELL HC PMN CIV-2005-545-070 24 August 2006IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY CIV-2005-545-070IN THE MATTER OF an application pursuant to ss43(1)(e) and 51(1) of the Trustee Act 1956 and in the matter of the Estate of ANDREW NEIL CAMPBELL BETWEEN MARGARET CLAIRE MILNE AND PAULINE RUTH FLANNAGAN Applicants AND MARGARET IDA CAMPBELL Respondent Judgment: 24 August 2006 at 3.45 pm In accordance with r540(4) I direct the Registrar to endorse this judgment with a delivery time of 3.45pm on the 24th day of August 2006.JUDGMENT AS TO COSTS OF ASSOCIATE JUDGE D.I. GENDALL[1] This proceeding was commenced on 7 February 2005. The essential relief sought by the applicants included orders first, for removal of the respondent who suffers from dementia as Trustee of the A.N. Campbell Estate, secondly for appointment of the Public Trustee in her place, and thirdly seeking an investigation and taking of accounts for the estate. [2] The respondent effectively took no part in this proceeding. [3] A defence was filed, however, by Mr Wallace Campbell and Ms Kathryn Smith (brother and sister of the applicants) as parties directed to be served. Their defence effectively opposed the appointment of the Public Trustee as a replacement trustee for the respondent and challenged the need for any independent investigation for the estate.[4] Ultimately, after discussions between the parties and/or their counsel, this matter was resolved without the need to resort to a formal hearing. [5] A Notice of Discontinuance of the proceeding was filed by the applicants on 31 July 2006. [6] In a Minute I issued in this matter on 10 July 2006, I noted that issues of costs remained outstanding. I directed that counsel for each party were to file and serve memoranda as to costs. [7] This has occurred. Counsel for the applicants has filed a Memorandum dated 31 July 2006. Counsel for Mr Wallace Campbell and Ms Kathryn Smith has filed his Memorandum dated 1 August 2006. Counsel for the applicant has filed a further Memorandum in Reply dated 8 August 2006. Counsel for the New Zealand Guardian Trust Company Limited ("Guardian Trust") has also filed a Memorandum dated 15 August 2006. [8] Having now had the opportunity to consider the submissions made in each of those memoranda, I now set out my decision as to this costs issue. [9] So far as the relief sought in the present application is concerned, it is clear that all parties accepted that the defendant suffered from dementia and needed to be removed as a Trustee. It is clear, too, as I see it, that the application was not filed for personal gain by the applicants, but in the general interests of all parties involved in their late father's estate, given the deteriorating medical condition of the respondent. [10] As I have noted above, these proceedings were first brought on 7 February 2005. They involved a considerable history of interlocutory skirmishing. Sadly there appears also to be significant dissension between the applicants and the parties directed to be served, Mr Campbell and Ms Smith, all of whom are siblings. [11] Given this position, in my view, it would be quite unproductive to rehearse the entire history of this matter here, and the claims and counterclaims made on behalf of the applicants and Mr Campbell and Ms Smith. Notwithstanding this, thefinal agreed proposal for a way forward, properly in my view, involved an acceptance by all parties of Guardian Trust as the new trustee of the estate. Counsel for Mr Campbell and Ms Smith notes first, that this was in line with proposals made by them early in the piece, and secondly that this differed from the relief sought initially by the applicants, in that they wanted the Public Trustee to be appointed as new trustee. In other broad respects, however, this result satisfied the applicants' main concern that the respondent, for serious medical reasons, was removed as trustee. [12] As to the present costs issue, paragraph 5 of the memorandum dated 15 August 2006 from counsel for the Guardian Trust states:In circumstances such as this, it is appropriate for each party's reasonable costs to be borne from the Trust Fund. Given the difficulties which have arisen in this matter previously, it would be wise for the Court to fix what it considers reasonable costs of the applicant and respondent. It would not be appropriate for Guardian Trust to be asked to decide this: the result could unfortunately be further disagreement and further Court applications.[13] I agree. Under all the circumstances here, I am satisfied that it is appropriate for the costs of each party to be borne from the Trust Fund of the estate. [14] These costs are to be calculated upon a category 2B basis. [15] At paragraph 14 of the memorandum dated 31 July 2006 from counsel for the applicants, Mr Lewis indicates that the costs incurred by the applicants on a solicitor/client basis here exceed $15,000.00 plus GST and disbursements to date. It would be expected that costs calculated upon a category 2B basis would be significantly less than this $15,000.00 figure. [16] An order is now made, therefore, that the reasonable costs of the applicants, the respondent, the parties directed to be served, Mr Campbell and Ms Smith, and the Guardian Trust in this proceeding calculated on a category 2B basis, plus disbursements as approved by the Registrar, are to be met from the trust fund established for the Estate of the late Mr Andrew Neil Campbell.[17] Leave is reserved for any party to approach the Court further if any further issues arise as to calculation or quantum of these costs only. 'Associate Judge D.I. Gendall'Solicitors:Wadham Goodman, Palmerston North for Applicants Guy & Toby Manktelow, Barristers & Solicitors, Palmerston North for Wallace Campbell and Kathryn Smith