//
Costs in estate disputes

Historically it was more common for the cost of estate disputes to be borne by the Estate.  The view, as expressed by the Court of Appeal in Keelan v Peach being that the courts are reluctant to exacerbate family rifts with personal costs orders.

However, as litigation costs balloon, increasingly costs are following the event.  Also, where an estate is small, it is important that matters be kept proportionate.  Consider the case of Shovelar v Lane where the costs for the sucessful party in a will dispute regarding a failed mutual will arrangement were more than 2.6 times the amount of the estate in question. 

 Shovelar v Lane highlights the importance of taking a principled approach to costs.  Things to keep in mind with estate litigation costs:

  • costs are always at the court’s discretion (never presume a certain outcome)
  • settlement should be seriously contemplated before costs take on their own demonic life form
  • executors need to carefully consider if, or when, they should take an active part in litigation rather than biding by the decision of the court.  Where beneficiaries are minors or incapacitiated a more active role might be necessary – if in doubt the executors would be wise to seek directions from the court.

Where strongly held views are maintained, the importance of maintaining a sense of perspective cannot be over-estimated.  Where parties to a dispute reach their own resolution, such that it is no appropriate for “costs to follow the event”, all parties being sucessful to a certain extent, it is important to appreciate that liely, no more than scale costs will be recoverable from the estate (apart from the trustees / executors, who will more likely recover full costs where a ‘watching brief” has been maintained: see Mather v Mortlock.

References:

  • Keelan v Peach (Costs) [2003] NZFLR 727
  • Shovelar v Lane [2011] EWCA 802
  • Re Schroeder’s Wills Trusts [2004] 1 NZLR 695
  • Mather v Mortlock [2013] NZHC 1930

Discussion

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: