Stobie v Clouston

[2015] NZHC 568

IN THE HIGH COURT OF NEW ZEALAND BLENHEIM REGISTRY

CIV-2014-406-003 [2015] NZHC 568

UNDER	The Administration Act 1969
IN THE MATTER OF	an application pursuant to s 21(1) of the said Act for the removal of JASON SCOTT CLOUSTON as Executor and Trustee of the Estate of the late GEOFFREY ROY STOBIE
BETWEEN	IAN GEOFFREY STOBIE Plaintiff
AND	JASON SCOTT CLOUSTON Defendant

Hearing:	On the papers
Counsel:	J M Stephenson for Plaintiff Defendant in person
Judgment:	25 March 2015

COSTS JUDGMENT OF MACKENZIE J

I direct that the delivery time of this judgment is

4.50 pm on the 25th day of March 2015

Solicitors:           Kaimai Law Bethlehem, Tauranga, for Plaintiff

Copy to:            The Defendant

STOBIE v CLOUSTON [2015] NZHC 568 [25 March 2015]

[1]      The plaintiff and the defendant were the executors of the estate of the late Mr G R Stobie.   Probate was granted on 20 May 2013.   In this proceeding, the plaintiff alleged that the defendant has misconducted himself in the administration of the estate and sought an order pursuant to s 21(1) of the Administration Act 1969 removing  the  defendant  as  administrator.    The  proceeding  was  commenced  in January 2014.  The defendant took no steps and the proceeding was set down for a formal proof hearing.  The events at that hearing are described briefly in my minute

of 30 June 2014.1   Mr Clouston belatedly took steps to address the proceedings.  He

agreed at the hearing that it was not appropriate for him to continue as an executor.  I

therefore made the orders sought in the application.

[2]      I  reserved  costs  for  submissions.     Counsel  for  the  plaintiff  filed  a memorandum  dated  15  August  2014  seeking  indemnity  costs.    I  then  fixed  a timetable for further submissions.   Those submissions were filed but regrettably there was some delay before they reached me and I received the final submissions only in early February.  The consequent delay in delivering this decision is regretted and I apologise to the parties for it.

[3]      The plaintiff seeks indemnity costs against the defendant.  On the face of it, the defendant’s conduct in failing to address the proceedings might be behaviour of a type which would justify an award of indemnity costs.  However, the circumstances must be considered to decide whether that is so.   The defendant has filed a memorandum setting out the situation in some detail.   This is contained in his memorandum  dated 30 October 2013.    He describes  a dysfunctional  relationship with his co-executor and gives an explanation of his actions.

[4]      In all the circumstances, I consider an award of indemnity costs against the defendant is not justified.  I do not consider it appropriate to venture into the rights and wrongs of what has occurred to date.  The only factor which is relevant in fixing costs is conduct in relation to the proceedings.  I must consider whether any of the

circumstances in r 14.6(4) of the High Court Rules are present, to such an extent as

1      Stobie v Clouston HC Blenheim CIV-2014-406-3, 30 June 2014.

would justify an award of indemnity costs.  The defendant failed to take any steps in relation  to  the  proceeding  until  the  morning  of  the  hearing.     That  was  not appropriate, but it does not bring the case within r 14.6(4)(a) or (b).

[5]      It is also relevant that the defendant was an executor of the estate.  He is a solicitor, though not in practice.   He would ordinarily be able to recover expenses incurred in his capacity as executor from the estate.2     I consider that the circumstances do not justify any recovery by the defendant, but that principle weighs against ordering costs against him personally, in the absence of a clear dereliction of his duty, an inquiry on which I have not had to embark.   This litigation has not

required any finding by me which would justify a personal costs order against the defendant.

[6]      The plaintiff, as a co-executor, should receive reimbursement for his costs from the estate.  The proceedings will have resolved issues to allow administration to proceed.   The litigation is thus to be treated for costs purposes as being for the benefit of the estate, so that indemnity costs should be payable out of the estate,

under r 14.6(4)(c).3

[7]      Counsel for the plaintiff has quantified costs and disbursements to date at

$10,234.82.   While it may be that no order is strictly necessary to achieve this, I direct that amount is to be paid from the estate.  Any further costs will form part of the cost of administration in the usual way.

“A D MacKenzie J”

2      J R Martyn and N Caddick (eds) Williams, Mortimer and Sunnucks on Executors, Administrators and Probate (20th ed of Williams on Executors and 8th ed of Mortimer on Probate, Sweet & Maxwell and Thomson Reuters, London, 2013) at [56.02].

3      See Re Buckton [1907] 2 Ch 406.