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Beneficiaries, Beneficiary rights, Right to trust information, Will trusts

Costs award for failing to provide information

The decision in Roberts v Francis further highlights the need to respond to beneficiaries’ information requests in a timely fashion.  The background facts can be summarised as follows:

  • Dr Roberts died intestate
  • His wife obtained letters of administration
  • The beneficiairies of his estate, as determined by the Administration Act were his wife and his children from a former marriage
  • Questions arose early in the administration of the estate regarding the correctness of information rabout the size of the estate
  • An advance owing to Dr Roberts from an inter vivos trust was later determined to have been wrongly attributed to him soley and was in fact an advance from him and his wife
  • The beneficiaries became concerned at the amount of information they were receiving as well as whether it was correct
  • Lawyers were hired
  • Correspondence between lawyers was addressed in part, or not at all
  • 2 weeks after the last letter requesting information was sent the beneficiaries’ lawyer advised that proceedings would be filed
  • Following proceedings being filed, all matters were resolved but for costs

Finding largely in favour of the beneficiaries Lang J stated in response to the defendant’s argument that the proceedings ought not have been filed, that:

“There was no response from Ms Francis or her solicitors for a period of over two weeks after the request was first made on 13 May 2013. In those circumstances, and having regard to the background of earlier delay, I consider the plaintiffs were entitled to file this proceeding.”

It is important to appreciate that the final delay of 2 weeks, which by itself does not seem significant, was accepted as a valid catalyst.  In practice it can be common for estate files to languish.  Often for valid reasons, sometimes due to a lack of sense of “timeliness” that might otherwise be embraced by other files.  Accordingly, this case should serve as a caution.

The Court followed the High Court decision in Brownlee v McCaslin regarding how the costs should be awarded even when matters were resolved without a substantive hearing.   Lang J noting at para [24] that:

 “I take the view that the plaintiffs must be regarded as the successful parties in the proceeding, because they achieved the practical outcome they sought in it. They received the information their solicitors had sought on 13 May 2013, and they also compelled Ms Francis to file a verified affidavit containing an inventory and account of the estate’s assets and liabilities. It is unlikely, in my view, that Ms Francis would have filed the latter document at all but for the fact that proceedings had been issued. I accept that she may have eventually provided the information the plaintiffs sought in their letter dated 13 May 2013, but probably not as quickly as she ultimately supplied it.”

Finding in favour of the plaintiffs the majority of the costs were awarded against the Administrator, Ms Francis personally (rather than against the estate), thus avoiding the plaintiffs sharing in the costs.

The Administrator was permitted to be indemnified from the Estate for her costs defending the initial proceedings, with the exceptions of the costs relating to the affidavit in opposition to the plaintiffs’ claim.

In this regard the defendant’s position was that applications under r 27.32 (a person interested in an estate may apply for an order that the admininstrator file certain documents about the estate) are rare  in New Zealand, and that it cannot be seen that “… anything further would be achieved by requiring the administrator to file in the Court the inventory and accounts the subject of this application.”

This position was not accepted by the Court,  the Court observing that amongst other things “it ignores the fact that, in this area of the law, the outcome is likely to be dictated by factors that are highly contextual and fact specific. General comments about the rarity or otherwise of such applications in New Zealand are of no assistance whatsoever.”

References:

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Discussion

One thought on “Costs award for failing to provide information

  1. My father passed away 8 months ago and my sister subsequently absconded with some of his most valuable and treasured possessions shortly thereafter. Since then, she has repeatedly changed her story and lied about what she has in her possession. My siblings and I are concerned that she also pillaged his bank account(s). What are the responsibilities of the Executors of his estate to its beneficiaries? (The sister I referred to is not an Executor.) The Executors weren’t involved in the division of his belongings and have made no mention about his financial assets. Thank you.

    Posted by Margot Duane | May 26, 2015, 10:52 am

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