GORRINGE v POINTON AND HENDERSON AS EXECUTORS OF THE ESTATE OF JOAN BLAIR GORRINGE [2023] NZCA 426

GORRINGE v POINTON AND HENDERSON AS EXECUTORS OF THE ESTATE OFJOAN BLAIR GORRINGE [2023] NZCA 426 [6 September 2023]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA151/2022[2023] NZCA 426BETWEEN ROMILEY CHANTAL GORRINGE ANDASHLEY SHAYLIN GORRINGEAppellantsAND JUDITH ANNE POINTON ANDSUSAN RUTH HENDERSON ASEXECUTORS OF THE ESTATE OFJOAN BLAIR GORRINGERespondentsCourt: Brown, Mallon and Downs JJCounsel: J R Hosking and C J Drought for AppellantsK J Catran for J A Pointon as beneficiaryS T Scott for S R HendersonJudgment:(On the papers)6 September 2023 at 3.00 pmJUDGMENT OF THE COURTA The High Court costs orders with respect to the appellants and thefirst-named respondent are set aside. The High Court costs orders withrespect to the second-named respondent are undisturbed.B The first-named respondent must pay the appellants costs in theHigh Court of $73,093.75 and reasonable disbursements as fixed by theRegistrar of this Court.C The first-named respondent must pay the appellants costs in this Courtof $16,730 and reasonable disbursements as fixed by the Registrar ofthis Court.___________________________________________________________________Table of ContentsPara NoIntroduction [1]Overview [4]Costs in the High Court [4]Costs on appeal [7]Relevant principles [9]Preliminary observations [13]High Court costs: the claim against Judith [20]Computation of scale costs in accordance with rr 14.3 to 14.5 [20]A reduction under r 14.7(d) and (f) [23]Increased costs [27]Settlement proposals [29]Alleged impropriety [39]Conclusion [41]High Court costs: Ms Henderson [42]Costs claimed below [44]The recovery now sought from the executors [50]Conclusion [57]Costs in this Court [63]Should Judith recover costs from the estate? [68]Conclusion [74]Result [79]REASONS OF THE COURT(Given by Brown J)Introduction[1] The appellants challenged the testamentary capacity of Joan Gorringe,alleged undue influence by Judith Pointon concerning Joan's wills made in 2015 and2016, and asserted a breach of fiduciary obligations by Joan's executors. All threeclaims were dismissed in a judgment delivered on 3 March 2022.1 In a separate costsjudgment the appellants were directed to pay costs to both the respondents, withsome of the appellants' costs and all of Judith's reasonable costs being met fromJoan's estate.21 Gorringe v Pointon [2022] NZHC 342 [High Court substantive judgment].2 Gorringe v Pointon [2022] NZHC 1621 [High Court costs judgment].[2] The appellants' appeal, which was confined to the undue influence cause ofaction, was successful and both the 2015 and 2016 wills were declared invalid.3The issue of costs, both in this Court and in the High Court, was reserved.4This judgment addresses costs in both Courts consequent upon the reversal of theHigh Court's finding on the undue influence cause of action.[3] While the computation of costs in this Court is reasonably straightforward,the analysis is more complex for the High Court proceeding given the multiple causesof action, separate representation of the respondents, allegations of impropriety andthe service of Calderbank letters.5 The complexity has been compounded by theappellants seeking to revisit rulings in the costs judgment concerning the executors'exposure to costs.OverviewCosts in the High Court[4] The appellants submit that Judith should meet their costs and disbursementson an indemnity basis in the sum of $289,492 from her share in the estate. In thealternative they submit that Judith should pay them scale costs of $111,908 on a2B basis with a 50 per cent uplift, as shown in the schedule below, and disbursementsof $20,853.3 Gorringe v Pointon [2023] NZCA 42.4 At [114].5 Settlement offers expressed as being without prejudice except as to costs, in accordance with theprinciples articulated in Calderbank v Calderbank [1975] 3 WLR 586 (CA) at 596.[5] Judith submits that there is no justification for either indemnity costs ora 50 per cent uplift on scale costs. Indeed she argues that there should be a reductionfrom scale costs having regard to the substantial emphasis during the trial on hercontrol of and expenditure from Joan's bank account and on the unsuccessfulallegation of a breach of fiduciary duty on the part of the executors. Finally, it issubmitted that both the costs awarded to the appellants and Judith's own costs shouldbe met from the estate "in the normal way".[6] As against Ms Henderson as executor, the appellants seek an order that90 per cent of the legal costs which the executors incurred should be borne by thempersonally.6Costs on appeal[7] The appellants seek scale costs on a band B basis with a 50 per cent uplift aselaborated upon in the schedule below:They submit that Judith should meet her own costs without recourse to the estate.[8] Judith accepts that the appellants are entitled to costs in relation to thesuccessful appeal but takes issue with items 16, 19 and 8 in the appellants' schedule.She submits there is no justification for a 50 per cent costs uplift. Consequently shecontends the costs award should be $15,535. She submits the appellants' costsshould be met from the estate "in the usual way" but that she should bear her owncosts herself, also in "the normal way".6 They also seek an order that certain fees rendered should be excluded: see [42] below.Relevant principles[9] In Manukau Golf Club Inc v Shoye Venture Ltd, the Supreme Court explainedthe limits on the discretion to award costs:7[7] Although r 53 of the Court of Appeal (Civil) Rules, like r 14.1 of theHigh Court Rules, renders costs decisions discretionary, the discretion hasnever been unfettered and must be exercised judicially. Particularly sincedetailed costs regimes were introduced in the High Court (in 2000) and theCourt of Appeal (in 2008), the general discretion has been held to bequalified by the specific rules. As the Court of Appeal said in MansfieldDrycleaners Ltd v Quinny's Drycleaning (Dentice Drycleaning Upper HuttLtd), the overall structure of the costs regimes now means "there is a strongimplication that a Court is to apply the regime in the absence of some reasonto the contrary".The Court observed that a fundamental principle applying to the determination ofcosts in all the general courts of New Zealand is that costs follow the event.8[10] However in probate matters, the principles articulated by Stringer J inIn re Paterson (Deceased) have been consistently applied:9The Court has a general discretion as to costs in all actions and proceedingsbefore it, but there are certain well-established principles upon which thatdiscretion should be exercised in cases of contested wills. They are asfollows: (i) If the litigation originates in the fault of the testator—e.g., bythe state in which he left his testamentary writings, or by his eccentric orirrational habits and mode of life—or of those interested in the residue, thecosts may properly be paid out of the estate. (ii) If there be sufficient andreasonable ground, looking to the knowledge and means of knowledge ofthe opposing party, to question either the execution of the will or the capacityof the testator, or to put forward a charge of undue influence or fraud, thelosing party may properly be relieved from the costs of his successfulopponent. (iii) Unless the circumstances of the case are such as to bring itwithin one of the foregoing exceptions, the general rule that costs shouldfollow the event ought to prevail Paterson was applied in the High Court costs judgment, both in favour of theappellants and Judith, and is relied upon by Judith in this Court.7 Manukau Golf Club Inc v Shoye Venture Ltd [2012] NZSC 109, [2013] 1 NZLR 305(footnotes omitted).8 At [8].9 In 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.[11] Also material to the appellants' costs claim is r 14.6 of the High CourtRules 2016, which relevantly states:14.6 Increased costs and indemnity costs(1) Despite rules 14.2 to 14.5, the court may make an order—(a) increasing costs otherwise payable under those rules(increased costs); or(b) that the costs payable are the actual costs, disbursements,and witness expenses reasonably incurred by a party(indemnity costs).(2) The court may make the order at any stage of a proceeding and inrelation to any step in it.(3) The court may order a party to pay increased costs if—(a) the nature of the proceeding or the step in it is such that thetime required by the party claiming costs wouldsubstantially exceed the time allocated under band C; or(b) the party opposing costs has contributed unnecessarily to thetime or expense of the proceeding or step in it by—(iii) failing, without reasonable justification, to admitfacts, evidence, documents, or accept a legalargument; or(iv) failing, without reasonable justification, to complywith an order for discovery, a notice for furtherparticulars, a notice for interrogatories, or othersimilar requirement under these rules; or(v) failing, without reasonable justification, to acceptan offer of settlement whether in the form of an offerunder rule 14.10 or some other offer to settle ordispose of the proceeding; or(4) The court may order a party to pay indemnity costs if—(a) the party has acted vexatiously, frivolously, improperly, orunnecessarily in commencing, continuing, or defending aproceeding or a step in a proceeding; or[12] For her part Judith relies on r 14.7, which relevantly states:14.7 Refusal of, or reduction in, costsDespite rules 14.2 to 14.5, the court may refuse to make an order forcosts or may reduce the costs otherwise payable under those rulesif—(d) although the party claiming costs has succeeded overall, thatparty has failed in relation to a cause of action or issue whichsignificantly increased the costs of the party opposing costs;or(f) the party claiming costs has contributed unnecessarily to thetime or expense of the proceeding or step in it by—(ii) taking or pursuing an unnecessary step or anargument that lacks merit; orPreliminary observations[13] Walker J commenced her discussion in the costs judgment by observing:[26] The extent of disagreement between the parties about costs is afurther reflection of the irretrievable break-down in the familial relationship.They do not agree who is entitled to costs and what costs, if any, ought to beborne by the Estate.Although there was some measure of agreement concerning costs on theappeal, the Judge's observations are an accurate description of the parties' currentsubmissions on costs, which are both extensive10 and somewhat strident.[14] Particularly in view of the third cause of action of breach of fiduciaryobligations by Joan's executors, unsurprisingly Ms Henderson had her ownrepresentation in the High Court. Both the liability judgment and the costs judgmentrecord Mr Catran as appearing for Judith "as beneficiary" and Mr Scott as appearingfor the "second named defendant", namely Ms Henderson. On the face of it there10 The appellants' submissions were 24 pages; Judith's submissions were 21 pages; submissions ofMs Henderson were 11 pages; and submissions of the appellants in reply were 8 pages.was no representation of Judith in her capacity as an executor.11 Mr Scott did notappear on the appeal but he did file written submissions on costs. It is appropriatethat we record how that came about.[15] The notice of appeal named Judith and Ms Henderson, in their capacity asexecutors of Joan's estate, as the respondents to the appeal. Mr Catran filed anappearance on behalf of Judith in her capacity as a beneficiary and Mr Scott filed anotice of appearance on behalf of Ms Henderson. Security for costs was set at$14,120, reflecting the participation of two respondents.[16] On 6 April 2022 counsel for the appellants wrote to Mr Scott enquiringwhether he would be actively participating in the appeal, pointing out that the undueinfluence allegation did not affect the estate and that case law was clear that executorsshould take a neutral approach to such claims. Mr Scott took the position12 thatunless the appellants were abandoning certain of the grounds of appeal13 it wasanticipated that the Court would wish to hear from the estate's solicitors.[17] Some five months later Mr Scott sought leave to be excused from the hearingof the appeal, explaining that he had sighted the appellants' submissions and thatMs Henderson abided the decision of the Court. Leave to be excused was grantedon 3 October 2022. On 18 October 2022 counsel for the appellants filed amemorandum seeking a refund of half the amount of security for costs. It stated thatthe estate was no longer participating in the appeal.[18] However when Mr Scott became aware of the contents of the appellants'submissions on costs with reference to Ms Henderson, Mr Scott filed a submissionon her behalf.11 In submissions of Mr Scott for Ms Henderson on the issue of costs in this Court, it was statedthat Ms Henderson was separately represented in the High Court trial as an executor as aconsequence of different claims being made against each executor, in particular the allegationof undue influence being made against Judith alone.12 In a memorandum to the Court concerning security for costs.13 Including that in respect of the 2015 will there were no reasons given by Joan for the significantdeparture from the previous pattern of will-making and that there was no legal advice ordiscussion with a qualified person. And that, in respect of the 2016 will, Ms Henderson gaveincorrect advice as to the effect of the gift over clause in the 2015 will.[19] We first address the appellants' claim for costs against Judith before turningto address the contentions in relation to Ms Henderson.High Court costs: the claim against JudithComputation of scale costs in accordance with rr 14.3 to 14.5[20] There was a significant measure of agreement on the computation ofscale costs. The appellants claimed $74,605 while Judith proposed $56,404.The points of difference between the appellants' schedule14 and the schedule annexedto Judith's submissions were as follows:Description Date Appellants JudithCommencement ofproceedings07.07.2020 $7,170 $2,390Originating application 07.07.2020 $4,780 -Bundle preparation Various $1,195 -Preparation ofsubmissionsVarious - $3,585Preparation for hearing Various $11,950 $9,560Second counsel 19.07.2021 $4,780 -Costs submissionsHigh Court31.03.2022 $5,295 -[21] We determine those points of difference as follows:• The appellants sought to maintain an entitlement to commencement costsfor both a statement of claim (item 1) and an originating application(item 37). We consider that the latter is not recoverable. The timeallocation for commencement of proceedings of three days (as theappellants claim) is correct.• The claim for bundle preparation is accepted.14 See [4] above.• As we consider that this was an affidavit hearing (notwithstandingcross-examination),15 the correct amount for preparation for hearing isthe larger amount of $11,950.• We certify for second counsel.• We accept that costs submissions in the High Court were necessary.[22] Consequently we calculate scale costs on a 2B basis to be $69,825.A reduction under r 14.7(d) and (f)[23] Mr Catran identified an extensive list of matters which were said to supporta reduced award, many of which concerned the criticisms made of the executors, theburden of the interlocutories and discovery pursued by the appellants, and the latefiling of evidence of Dr Malone. While acknowledging that the quantum of anyreduction is for this Court, he submitted that a reduction of 20 per cent in respect ofthe preparation of affidavits, discovery and trial allowances would be reasonable.[24] In reply the appellants submitted that there was no basis for reduced costs.They contended that Judith's costs submissions largely sought to relitigate the appealand findings made. They took issue with the criticisms in respect of discovery andDr Malone's evidence.[25] The appellants were ultimately the successful party. While they did notsucceed on all their causes of action, nevertheless, as this Court stated in Weaver vAuckland Council, success on more limited terms is still success.16[26] However, as in that case, we consider it is appropriate that the costs awardedto the appellants should be reduced in accordance with r 14.7(d) because of the timeand resources necessary for Judith to successfully resist the other grounds of claim.In particular we consider that there is force in Mr Catran's submission that the attacks15 We note that Judith's calculation included $11,950 for item 30 (preparation of affidavits, issues,authorities).16 Weaver v Auckland Council [2017] NZCA 330, (2017) 24 PRNZ 379 at [26].on Joan's testamentary competence lacked an evidential basis and the claim forbreach of fiduciary duty on the part of the executors had little prospect of successeither in law or on the facts. We allow a reduction of 15 per cent from the scale costscomputation.17Increased costs[27] The appellants seek either indemnity costs or in the alternative an uplift onscale costs. While we will address that claim on its merits, in the context of thisrancorous litigation it is perhaps unsurprising that the appellants seekindemnity/increased costs given that in the High Court Judith sought indemnity costsfor the period subsequent to her Calderbank letter and, in addition, an uplift of25 per cent.18[28] The claim for increased costs is advanced on two fronts: first, on account ofthe failure by Judith to accept proposals in the appellants' Calderbank letters; second,on the grounds of alleged impropriety on the part of the respondents in variousrespects including the approach to probate, the conduct of the litigation and theconflicted position of the executors.Settlement proposals[29] A number of settlement offers were made prior to the High Court hearing.An offer by Judith dated 18 June 2021 had implications for the costs award made bythe Judge.19 However, the appellants having been successful on appeal, two offersmade by them now assume significance.[30] The first letter was sent on 14 February 2020, more than four months beforethe commencement of proceedings. It proposed that the appellants receive a cashsettlement payment of a one-half share of the estate, said to reflect Joan's will dated7 June 2011. It stated that if litigation proved necessary the letter would be producedin support of an uplift on costs. The offer was rejected, the point being made that it17 A reduction totalling $10,473.75.18 High Court costs judgment, above n 2, at [6(a)].19 At [48] and [53]–[54].did not involve any element of compromise or settlement and that acceding to itwould constitute a complete acceptance by Judith of a return to the 2011 will.[31] A second letter was sent on 2 June 2021. The appellants' counsel proposed asettlement whereby the estate would be divided into five shares. Judith would retainthree-fifths (which she could share with her children as she saw fit) and the appellantswould retain two-fifths. We infer the response to that letter was Judith's offer of18 June 2021 proposing that the appellants receive a 20 per cent share in the residueafter deduction of the estate costs and the specific gifts to Judith's three children.20[32] To be effective for costs purposes pursuant to r 14.10 of the High Court Rules,an offer needs to be:21(a) clearly and unambiguously stated;(b) capable of contractual acceptance; and(c) more beneficial (or close in benefit) to the other party than thejudgment actually obtained.The relevant question is whether the offeree failed to accept the settlement offerwithout reasonable justification. As Mr Catran submitted, the assessment ofreasonableness requires the Court to consider the position at the time the offer wasmade rather than by reference to the end result.[33] He submitted that the first Calderbank offer was at a very early stage, beforeproceedings had been issued and before any evidence had been provided. The offerwas effectively that Judith concede the foreshadowed claim, accept that her mother's2015 and 2016 wills should be disregarded, and "grant the appellants 50% of Joan'sestate". He submitted that at that stage there was no reasonable basis for Judith toaccept the matters claimed by the appellants and that, as stated in the letter rejectingit, the offer was not a reasonable one.20 At [46].21 Body Corporate S73368 v Otway [2018] NZCA 612, (2018) 20 NZCPR 477 at [80].[34] In reply the appellants submitted:21. It is not accepted that the first Calderbank offer was not reasonable.It provided Ms Pointon with the ability to enter a Deed of FamilyArrangement confidentially without the need to recall probate on the2016 Will. Its rejection, including the allegation that Joan thoughtof the appellants as "greedy" entrenched matters. The offer was thesame as the outcome following the appeal. All parties would havebeen spared the expense of a trial and appeal if she had taken it.[35] We decline to treat the first letter as a relevant settlement offer for tworeasons. First, we do not consider that the letter painted as complete a picture ofJoan's statements to the appellants as the full version in the evidence which Romileysubsequently gave, as recorded in our judgment.22 The 14 February 2020 letter refersback to a letter of 11 December 2019 which merely sets out three excerpts from anemail but does not annex it. We do not accept that the first letter put Judithsufficiently on notice of the peril which she faced.[36] Secondly, the letter was not in substance an offer of compromise. It simplyproposed an outcome that equated with total success on a foreshadowed claim.We do not view a letter served with or prior to the proceeding which requests theentirety of the relief sought as a settlement offer within the spirit of r 14.6(3)(b)(v)of the High Court Rules.[37] By contrast, the second letter was explicit, not only putting Judith on noticeof the costs consequences but also notifying Ms Henderson that her alleged partisanapproach would have costs consequences for her personally. As the appellantssubmitted, there is no doubt that Judith would have been significantly better off ifshe had accepted that offer.[38] Mr Catran submits that the second Calderbank offer should not be effective.He observes that it was premised on a number of allegations of lying and dishonestyby Judith and it was eminently reasonable for her not to accept the offer. We areunable to accept that proposition. By the time of the second settlement offer theevidence of the appellants was clear and the risks for Judith of proceeding to trialwere palpable. That is reflected in the fact that shortly thereafter Judith made her22 Gorringe v Pointon, above n 3, at [12].own offer in response. An uplift is warranted on account of Judith's not havingaccepted the second settlement proposal.Alleged impropriety[39] Although in the circumstances where the appellants had been unsuccessful attrial the criticisms of their conduct were the focus of the Judge's consideration in thecosts judgment, the Judge also made observations about the respondents' conduct:23[52] On the other side of the coin, I expressed concerns in my substantivejudgment about the manner in which the defendants conducted the defenceof the proceedings, including the lack of openness about the Wills, theprobate process and impact on costs and the unfortunate late disclosure ofan Enduring Power of Attorney executed by Joan on the same day sheexecuted her 2015 Will.[40] The appellants revisited those criticisms in their submissions, contending thatJudith deliberately obstructed the provision of disclosure in the lead-up to theproceedings and that the conduct of both respondents in respect of discovery fellwithin r 14.6(3)(b)(iv) of the High Court Rules. They also placed emphasis onJudith's refusal to disclose the identity of the person who kept Joan company duringher son's funeral. They submitted:43. In her evidence Mrs Pointon maintained that a friend sat with Joanduring Peter's funeral. That person may have been able to provideuseful information to the Court. Mrs Pointon was asked repeatedlyto provide the name of that person and, in answer to theinterrogatory, took a technical approach relying on HCR 8.40(d)even though she had no intention of calling the person as a witnessherself.44. It was only under cross-examination that she disclosed, for the firsttime, that the person had apparently lost capacity and even then shedid not reveal the name out of purported concern for their wellbeing.The appellants were deprived of any opportunity to make inquiriesof that person (including in consultation with their family andcarers). The name of the person (if such a person ever existed) wasnever revealed. Mrs Pointon's conduct in steadfastly refusing toname this person even when served with an interrogatory wasimproper under HCR 14.6(3)(b)(iii) (uplift) and HCR 14.6(4)(a)(indemnity).23 High Court costs judgment, above n 2. See also at [40(d)].They also claimed to have been deprived of the ability to make further inquiry as tohow the enduring power of attorney was signed and witnessed by a person who didnot see Joan.Conclusion[41] While there is justification for the appellants' criticisms of some features ofthe respondents' conduct in the proceeding, it is not as significant a factor withreference to the consideration of increased costs as the failure to acceptthe appellants' second settlement offer. In combination we consider that thesematters warrant an uplift of 50 per cent24 in respect of most of the steps takensubsequent to 2 June 2021, namely items 31, 32, 34 and 27 in the appellants'schedule.25High Court costs: Ms Henderson[42] The terms of the costs order sought in this Court in respect of Ms Hendersonwere as follows:(ii) The present executors should be entitled to no more than 10% oftheir actual fees already deducted from the estate – the balanceshould be met by them personally;(iii) The amount in (ii) should not include the fees rendered by[Ms] Henderson for appearing in Court but should be confined toMr Scott's fees as rendered and the fees of Mr Patterson who, in July2020 shortly before proceedings were issued advised Ms Hendersonnot to distribute the estate.(iv) Ms Hipkiss' fees should not have been rendered to the estate andshould also be excluded under (ii) also.It was this claim for costs that prompted Mr Scott to file submissions notwithstandinghis not having appeared on the appeal.26[43] In order to fully comprehend the parties' position on this issue and the reasonsfor our decision it is necessary to briefly review what transpired in the High Court.24 $13,742.50, being 50 per cent of $27,485.25 At [4] above. Items 20 and 24 are not included.26 See [17]–[18] above.Costs claimed below[44] Ms Henderson sought from the appellants 2B costs totalling $66,203.The appellants opposed her application and sought an order that Ms Henderson meettwo thirds of the estate's actual costs to restore the estate.27[45] The Judge's summary of the appellants' criticisms of Ms Henderson includedthe following:28[18] Ms Hosking [counsel for the appellants] submits that variousminutes and memoranda make it clear that there was significantnon-compliance by Ms Henderson with court directions. She says thatMs Henderson's approach to discovery was also a significant source offrustration and entrenched the distrust held by the [appellants] and thatMs Henderson did not act as a neutral provider of information but took apartisan stance in the litigation as a whole.[19] The [appellants] instead found themselves in a position wherethey had concerning disclosures from their grandmother and no independentevidence of her reasons to contradict what she said. Had there been thoroughfile notes, capacity testing and some indication that Joan received properlegal advice, this whole situation might have been avoided. The [appellants]should not be punished for taking steps to challenge the Wills in thesecircumstances.[46] For Ms Henderson, Mr Scott:(a) rejected the proposition that her position was partisan;(b) noted that there was a potential costs consequence between Judith andMs Henderson given that the latter was acting in a dual capacity asexecutor and her firm was responsible for advancing the probateapplication; and(c) submitted that but for the "novel" breach of duty cause of action,counsel for the estate could have simply have been present to lead theevidence of Ms Henderson and Ms Hipkiss (the legal assistant whoplayed a significant role in the preparation and execution of the27 Relying on Public Trust v Dollimore [2019] NZHC 607, [2019] 2 NZLR 901.28 High Court costs judgment, above n 2.2015 will), answer any questions in respect of estate assets and abidethe decision of the Court.29[47] The Judge accepted that Ms Henderson had a limited role in the proceedingas framed and that, but for the allegation of breach of fiduciary duty, her role wouldhave been strictly limited to placing all relevant factual matters before the Court.30[48] The Judge had earlier made reference to her observations in the liabilityjudgment concerning the way the respondents had conducted the defence of theproceedings, including the lack of openness about the wills, the probate process andthe impact on costs.31 However with reference to the costs claim againstMs Henderson, the Judge explained:32[57] There is merit to Ms Hosking's submission that the lack of adequateprocesses at the time that Joan made the 2015 and 2016 Wills was asignificant contributor to the dispute. Ms Hosking urges me to direct thatthe Estate should only be liable for one-third of the reasonable costs incurredby Ms Henderson instead of an indemnity for reasonable costs. I am notpersuaded that this is open to me in the present circumstances. It is necessaryto distinguish between Ms Henderson's position as executor and as thesupervising partner for the drafter of the 2016 Will. Any potential claim inrespect of the drafting of the Will involves Ms Henderson in a differentcapacity altogether. Those different capacities ought not be conflated.[58] This is factually different from the position in Farn v Loosleybecause there the Public Trust sought approval for payment of costs by theEstate. In this case, Judith has the only interest in the residue. While I amsympathetic to the proposition that she should be relieved of some of the costburden arising in these circumstances (and the [appellants] likewise shouldtheir appeal succeed) Judith has not supported the submission that onlyone-third of Ms Henderson's costs be met by the Estate, even as analternative.[49] The Judge concluded:[59] Properly seen, Ms Henderson had a limited role in the proceedingdirected only to the defence of the allegation of breach of fiduciaryobligation. As discussed above, this ended up playing a distinctly minor rolelegally yet the actions of the executors in the probate process undoubtedlycoloured all that followed.29 At [25].30 At [55].31 At [52].32 Footnote omitted.[60] For this reason, and because this claim to 2B costs is duplicative, Imake an order for 30 per cent of 2B costs in favour of Ms Henderson againstthe [appellants] for the steps after 22 June 2021 only. Based on Mr Scott'sschedule this is the sum of $6,453.00 (30 per cent of $21,510.00).The recovery now sought from the executors[50] The order now sought is more severe than that claimed in the High Courtproceeding. The reason for the change in stance was not explained but may beoccasioned by the fact that, subsequent to the release of the High Court's costsjudgment, the appellants have ascertained that legal fees were rendered to the estateof $166,814.68, a figure which they contend is extraordinarily high.33 They arguedthat the estate had been significantly depleted by fees incurred, which they presumewere authorised by Judith as co-executor. They contended that it would be grosslyunfair for them to have to effectively pay for half of the estate's costs, which are notonly excessive but were incurred acting outside of the proper scope of an executor'srole in a case of this kind.[51] They submitted that the negligent processes in the will-making at FentonMcFadden (the law firm at which Ms Henderson was a partner) were relevant andshould be considered, placing reliance on Public Trust v Dollimore where the roleplayed by the Public Trust in the will-making was viewed as a relevant factor.34They contended that the present case is much worse than the scenario in Dollimorebecause Ms Henderson actively supported Judith and provided untrue informationabout the records held by Fenton McFadden, including reasons for the will changethat were not recorded anywhere and which could only have come from Judith.They criticised the conduct of Mr Scott, in particular his adoption of the role ofdefending Ms Henderson in respect of her conduct in the will-making process.35They submitted that Mr Scott should not have supported Judith and should not havesought to defend Ms Henderson in her capacity as Joan's lawyer.33 The appellants' written submissions explained that they requested details of the estate's fees atthe time the High Court costs were considered but that, consistent with the obstructive approachtaken with respect to discovery generally, the request was declined on the basis that on theHigh Court findings the appellants were only specific legatees.34 Public Trust v Dollimore, above n 28, at [36] and [38].35 Noting the position taken in his memorandum of 21 April 2022, set out at [16] above.[52] In his detailed submissions on behalf of Ms Henderson in response, Mr Scottsubmitted that, although the grounds on which the appellants sought orders againstthe executors were not clearly set out, they appeared to be based on criticisms ofMs Henderson. He contended that the majority of these criticisms related to theconduct of Fenton McFadden in obtaining instructions from Joan and in relation tothe preparation of the 2015 and 2016 wills, criticisms which he stated were notrelevant to Ms Henderson's role as executor, which only commenced on Joan's deathin October 2019.[53] Mr Scott noted that the starting position is that an executor is entitled to costsfrom the estate, citing Loosley v Powell.36 He emphasised that he was engaged ascounsel for Ms Henderson because of the need for separate representation concerningthe third cause of action for breach of fiduciary duty, which sought special damagesagainst the executors and costs payable by the executors personally on anindemnity basis. He sought to distinguish Dollimore on the grounds that there thePublic Trust took an active role in arguing there was undue influence, whereas in thiscase Ms Henderson had been defending herself against an allegation made againsther in her personal capacity as executor. In circumstances where that cause of actionwas rejected and was not appealed to this Court, he submitted there could be noquestion that the costs of representation were reasonably incurred by Ms Hendersonin her capacity as executor and hence were payable out of the estate.[54] Drawing attention to the distinction drawn by the Judge at [57],37 Mr Scottsubmitted that the only criticisms of Ms Henderson which could be relevant to thepresent costs application were those relating to her in her capacity as executor, almostall of which were the subject of the judgments in the High Court. Mr Scott observedthat Ms Henderson as executor was never in a position to accept the secondCalderbank offer.[55] Although the submissions timetable did not provide for a reply, counsel forthe appellants filed a reply submission "[d]ue to the complexity of the matter".The appellants took issue with the suggestion that it was necessary to separately36 Loosley v Powell [2018] NZCA 3, [2018] 2 NZLR 618.37 High Court costs judgment, above n 2. See [48] above.appeal the costs consequences of a first instance judgment, citing rr 48(4) and 53J ofthe Court of Appeal (Civil) Rules 2005. While acknowledging that there had beenno appeal against the rejection of the breach of fiduciary duty claim, theynevertheless maintained that the basis for that claim was relevant to costs.[56] Challenging the proposition that most of the criticisms of Ms Hendersonrelated to the making of the 2015 will, they submitted that their criticisms includedher actions as executor both before and after proceedings were filed. In particularthey submitted that Ms Henderson's failure to follow Court directions concerning thefiling of evidence and provision of discovery was expensive and frustrating forthe appellants. Noting that Judith had changed her position on the issue of theresponsibility of Fenton McFadden for costs, the appellants adopted a neutral stanceon the division of the executors' costs liability.Conclusion[57] We consider there is substance in Mr Scott's contention that to asubstantial degree the criticisms of Ms Henderson focus on her role as Joan'ssolicitor. We further consider that the Judge was correct to draw the distinctionbetween Ms Henderson's dual capacities.38 The appellants' stance on that issue wasinconsistent. At the commencement of their primary submissions they accepted thatthe conduct of Ms Henderson as Joan's solicitor was a separate matter to her conductas executor for Joan's estate. However in the course of their submissions theydeparted from that position,39 and in their reply invoked Dollimore for theproposition that the deficits in the Public Trust's will-drafting processes wererelevant to the exercise of discretion as to what litigation costs incurred by thePublic Trust should be reimbursed from the estate.[58] In our view Dollimore is distinguishable. The Public Trust there brought theproceedings, alleging both testamentary incapacity and undue influence. Whileaccepting that the Public Trust was correct to place the two wills before the Court,the Judge considered that it then adopted an incorrect approach and took too active38 At [57]. See [48] above.39 See [51] above.a role.40 He ruled that it should receive some costs as it would have needed to initiateproceedings, assess whether the other parties were presenting the Court with the rightinformation and attend.41 However the approach adopted was too adversarial andled to an improper incurring of expenditure.42 The scenario in the present case isdifferent and was compounded by the cause of action pleaded against the executors.[59] If the appellants did not accept the Judge's ruling on the conflation ofcapacities, then, as Mr Scott argues, they should have lodged an appeal against thecosts judgment. Success on an appeal confined to the undue influence cause of actionagainst Judith, in which the estate was not a participant, does not result in arevisitation of all aspects of the High Court's costs judgment. Allowing theappellants' appeal on the undue influence claim necessitates a reconsideration of thecosts outcome in the lower court to reflect that that cause of action should havesucceeded.[60] We accept there was no requirement for the appellants to file a separate noticeof appeal against the costs judgment, simply for the purpose of revisiting costs onthe undue influence cause of action in the event that their appeal on that cause ofaction was successful. However success on an appeal in respect of one cause ofaction does not mean that costs are at large in respect of all matters, including thoseon which the appellants failed at first instance and did not appeal. As this Courtexplained in Parsot v Greig Developments Ltd:43If a party wishes to challenge a costs judgment in the absence of success onthe substantive judgment, it must:(a) include the grounds of challenge in its substantive appeal, ifthat appeal is not already filed; or(b) seek to amend the notice of appeal to incorporate achallenge to the costs judgment, with the grounds ofchallenge; or(c) commence a new appeal against the costs judgment, whichappeal will then be heard at the same time as the substantiveappeal.40 Public Trust v Dollimore, above n 28, at [38].41 At [39].42 At [38].43 Parsot v Greig Developments Ltd [2009] NZCA 241, (2009) 10 NZCPR 308 at [33].[61] Similarly we are unable to accept the appellants' submission that,notwithstanding the absence of any appeal from the dismissal of the breach offiduciary duty cause of action, "[t]he conduct that was the basis for it is relevant tocosts". We agree with the tenor of Mr Scott's submission that:The complaints against Ms Henderson's conduct, were all pleaded, were thesubject of evidence, submissions and are the subject of the High Courtdecision which has not been appealed. It is submitted the appellants cannotattempt to relitigate those issues through this costs application.[62] In the absence of appeals against either the dismissal of the breach offiduciary duty claim or the costs rulings in respect of the executors' liability, we donot consider that the claim in respect of costs against Ms Henderson is able to berevived as an adjunct to revisiting the costs implications of success on the undueinfluence cause of action alone. Consequently we leave undisturbed the orders inthe costs judgment with reference to Ms Henderson. To the extent that the appellantsconsider that the costs rendered to the estate were excessive, their avenue for redressis via the procedures in the Lawyers and Conveyancers Act 2006.44Costs in this Court[63] The appellants claim costs of $45,888 said to be calculated on a "Band B"basis and incorporating an uplift of 50 per cent.[64] Judith submits that costs should be calculated as for a standard appeal in termsof r 53B(1)(a) of the Court of Appeal (Civil) Rules. She challenges items 16, 19 and8 in the appellants' schedule at [7] above.[65] We do not consider that this appeal was a complex one as defined inr 53B(1)(b). Nor is an uplift warranted. There does not appear to have been a casemanagement conference. We certify for second counsel.[66] So far as the costs submissions are concerned, in the normal course costsshould be addressed in the submissions on appeal. We recognise that it is necessaryto defer aspects of costs where there are Calderbank letters. However we do not44 Sections 132(2) and 160.accept that it is necessary or appropriate in this instance to make a discrete award of"costs on costs" as the appellants propose. Having regard to the outcome of thisjudgment we consider that costs should lie where they fall on the costs determination.[67] Hence, the appellants are entitled to costs in this Court of $16,730.Should Judith recover costs from the estate?[68] In the High Court Mr Catran for Judith submitted that the first Patersonground45 was not made out, explaining:46[22] First, Joan was not at fault because there is no irrational habitattributed to her or her writings. The only "fault" may be that she is claimedto have told the [appellants] that she was bullied into changing her will.But the effect of any such fault was spent and is not relevant to the bringingor conduct of the litigation. The litigation was brought only to undo thefinancial detriment to the [appellants] brought about by the Will change.[69] In accepting that submission the Judge stated:[31] The first principle plainly does not apply because there was noeccentric or irrational habit on behalf of Joan which prompted the[appellants'] challenge. Her conversation with the [appellants] where shedisclosed having changed her Will, albeit soon after Peter's death, falls wellshort of this threshold.We agree with that conclusion. There was no attempt by Judith to resile from herstance in the High Court.[70] With reference to the second Paterson principle,47 the judgment recorded:[23] Secondly, Mr Catran contends that the second ground is not madeout because Judith did not possess the requisite knowledge. I consider thissubmission misapprehends the principle in Paterson because it is theknowledge of the challenger to a Will which is relevant and not theknowledge of the person said to have unduly influenced the will-maker.45 In re Paterson (Deceased), above n 9, at 442. The first principle is that where the litigationoriginates in the fault of the testator or of those interested in the residue of the estate, costs mayproperly be paid out of the estate.46 High Court costs judgment, above n 2.47 In re Paterson (Deceased), above n 9, at 442–443. The second principle is that if there issufficient and reasonable ground, looking to the knowledge and means of knowledge of theopposing party, to question 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 may properly be relieved fromthe costs of their successful opponent.That conclusion is also correct. It was not the subject of challenge in the currentsubmissions. The Judge determined that the appellants had objectively reasonablegrounds for concern within the second Paterson principle which justified an orderfor their costs to be met (in part) from the estate.48[71] The appellants' submissions on this issue are puzzling to the extent that theyappeared to assume an obligation to justify their challenge to the 2015 and 2016wills. However they then proceeded to submit that the circumstances of this casefall within category three of Paterson,49 with the consequence that costs shouldfollow the event.[72] By contrast, the submission for Judith was that "costs should be met from theestate in the normal way". The import of that proposition appears to be that, to somedegree at least, costs of both the appellants and Judith should be met from the estate.This can be seen from the concluding paragraph of Judith's costs submission:5058. Accordingly, Mrs Pointon's position is that:(a) Her costs on the appeal be met by her. But her costs in theHigh Court continue to be met by the estate, as earlierordered;(b) The appellants' costs on the appeal be scale and met from theestate in the sum of $15,535 as set out in the scheduleannexed marked A. There be no uplifts or indemnity costsand no allowance for second counsel.(c) The [appellants'] costs in the High Court be as ordered bythe High Court and met by the estate already, but with themretaining the bequests under the now overturned wills as partof a revised costs award. In the alternative, the [appellants]be awarded costs in line with the schedule marked C, butwith a discount of 20% for the reasons set out inparagraph 46. Any such costs to be met by the estate.48 High Court costs judgment, above n 2, at [38].49 In re Paterson (Deceased), above n 9, at 443. The third principle is that unless the circumstancesof the case are such as to bring it within the first or second principles, the general rule that costsshould follow the event ought to prevail.50 Emphasis added.[73] The submission for Judith appears to misapprehend the Paterson principles.In our view the appellants' contention, that the third principle applies here, is sound.Hence costs follow the event and Judith may not have recourse to the estate forreimbursement of the costs which she is required to pay.Conclusion[74] Mr Catran mounted a strong submission to the effect that it was unfair for thecosts implications of this Court's judgment to be visited solely on Judith.He submitted:55. In this [C]ourt, again there was no finding of specific improperbehaviour by Mrs Pointon. The decision was based on an inabilityto explain Joan's reported statement that she had been bullied.This is not to deny this Court's finding of undue influence.Mrs Pointon has to bear the shame and reputational consequences ofthat finding. But it is submitted that is not sufficient reason to'punish' Mrs Pointon by allocating all costs responsibility to her.The case is most unusual in having a statement from beyond thegrave as its primary evidence, only made public when it was too lateto test it.[75] It is certainly unusual for evidence in an undue influence case to derive fromthe testator. In resisting the appellants' claim Judith had to assess whether theappellants' evidence about Joan's statements would be accepted and, if so, whetherit would be determined that Joan's statements were truthful. The Judge accepted thatthe appellants' account was generally truthful but considered that "in their context"the statements were more equivocal than the bare words suggested.51[76] On the evidence we reached a different conclusion on the latter issue. As weexplained in our judgment, the undue influence issue was to be answered solely byreference to the evidence adduced in the case. The case was not about whether Judithwas a dutiful daughter.52[77] It is important to dispel any notion that an award of costs against Judith is tobe viewed as punishment. Unlike claims for general damages, the outcome in thislitigation was binary: Joan's 2015 and 2016 wills were either valid or they were not.51 High Court substantive judgment, above n 1, at [180].52 Gorringe v Pointon, above n 3, at [105].Unfortunately for Judith, her assessment of the outcome of the appellants' claim wasnot accepted by this Court on the basis of the evidence. As the Supreme Courtexplained in Shirley v Wairarapa District Health Board:53[19] Rule 47(a) reflects the longstanding principle that, unless there areexceptional reasons, costs should follow the result. That is, the loser, andonly the loser, pays. Miller J's order departs from that approach.The English Court of Appeal discussed the issue of good cause to departfrom the ordinary course in Forster v Farquhar where Bowen LJ said:"We can get no nearer to a perfect test than the inquiry whether itwould be more fair as between the parties that some exceptionshould be made in the special instance to the rule that the costsshould follow upon success."[78] In the absence of any exceptional reasons for a departure from the ordinarycourse, costs in this case should follow the result.Result[79] The High Court costs orders with respect to Judith and the appellants are setaside. We leave undisturbed the High Court costs orders with respect toMs Henderson.[80] Judith must pay to the appellants:(a) Costs in the High Court of $73,093.75.54(b) Costs in this Court of $16,730.Judith must also pay to the appellants reasonable disbursements in both Courts asfixed by the Registrar of this Court.Solicitors:Phillips & Co Law Ltd, Rotorua for AppellantsCooney Lees Morgan, Tauranga for J A PointonRejthar Stuart Law, Tauranga for S R Henderson53 Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523(footnote omitted). Rule 47(a) was the predecessor to the current rr 14.1 and 14.2(1)(a) in theHigh Court Rules.54 Being $59,351.25 plus $13,742.50.