Perrins v Holland & Ors

By his order made on 21st December 2009 Lewison J pronounced for the force and validity of the last will and testament dated 26th September 2001 of Robert Perrins, deceased (“the Testator”) and made certain consequential orders as to costs. The reasons for those orders were explained by Lewison J in two judgments. The first given on 31st July 2009 dealt with the merits of the claim. The second given on 21st October 2009 considered the costs of the action. By an amended appellant’s notice issued on 20th January 2010, David sought to appeal from that order on three grounds. The first two related to the grant of probate in solemn form, the third to certain of the orders as to costs.

Permission to appeal on each of the three grounds was granted by Patten LJ on 16th February 2010. Argument on the first two was heard on 22nd and 23rd June 2010. By order of this court made on 22nd July 2010 the appeal on those two grounds was dismissed. By the same order this court directed that the hearing of the appeal on the third ground of appeal should be heard on 3rd/4th November 2010. In the event, and in an attempt to minimise costs, by letter dated 22nd October 2010 this court agreed to dispense with a hearing and to determine the appeal on the third ground on the basis of written submissions only. This is my judgment in relation to that third ground. In addition I will deal with the costs of these appeals and the application of David for leave to appeal to the Supreme Court

The circumstances of this case are set out in paragraphs 5 to 11 of my judgment given on 21st July 2010 in relation to the first two grounds. I will not repeat them. The order of Lewison J in relation to costs is as follows:

“1.

Pursuant to the Order of HHJ Purle QC of 15 September 2008 the solicitors to the Claimant shall pay the costs of the Defendants of and occasioned by the adjournment of that date assessed if not agreed on the standard basis.

2.

The Claimant (a party who was in receipt of services funded by the Legal Services Commission) shall pay such sum as is reasonable in respect of the costs of the Third Defendant pursuant to section 11 Access to Justice Act 1999, such amount to be determined by a Costs Judge.

3.

There be a detailed assessment of the costs of the Claimant which are payable out of the Community Legal Service Fund.

4.

The First and Second Defendants shall recover their costs of the action from the estate of the Deceased, to be assessed on the indemnity basis, if not agreed by the Third Defendant, including such costs relating to the adjournment on 15 September 2008 as they do not recover from the solicitors for the Claimant under paragraph 1 above.”

The grounds of appeal in relation to that part of the order of Lewison J are as follows:

“a.

Having found rightly that this was a case where the circumstances were such that the matter required investigation and therefore there should be no order as to costs he was wrong to hold that a very low offer made by the Third Defendant to settle the matter when she had not made full disclosure to the Claimant should result in the Claimant being ordered to pay the costs;

b.

He failed to deal with the issue which arose on a hearing before HHJ Purle QC on 15 September 2008 as to whether it was right that the Claimant should pay two set of costs on his application for an adjournment where the First and Second Defendants and the Third Defendant were respectively represented by separate legal teams.”

I shall consider the challenge to paragraph 1 on the ground specified in paragraph b first. In my view it is misconceived. It is clear from the face of the order and from paragraphs 21 to 24 of the second judgment of Lewison J that the order for costs was made by HH Judge Purle QC against David’s solicitors personally. It is not an order against David. Accordingly David has no interest in the issue. His solicitors did not seek to be joined as parties nor did they seek permission to appeal from the orders of either HH Judge Purle QC or of Lewison J.

The issue with which Lewison J did deal was the question reserved by the order of HH Judge Purle QC whether the costs of all three defendants should be paid by the solicitors. As Lewison J explained in his second judgment HH Judge Purle QC had been concerned to be satisfied that it was reasonable for the first and second defendants, the executors, to be represented separately from the third defendant (“Anne”). For the reasons given in paragraph 23 of his second judgment Lewison J considered that it was. There was never any question of whether Anne’s costs should be paid as she was an essential party to the trial of the claim which had had to be adjourned. Accordingly, there is no merit in the contention advanced in paragraph b in addition to the circumstance that this is not an issue David is entitled to pursue.

I turn then to the challenge to paragraph 2 of the order of Lewison J. In my judgment given on 21st July 2010 I said (paragraph 37)

“There remains for further argument the appeal from the order of Lewison J in respect of the costs of the proceedings before him. They were not considered at the earlier hearing of the appeal so that the executors should not incur costs of appearing on those grounds which were of no concern to them. Given that we shall now have to deal with the costs of this appeal in addition I would urge the parties to consider whether it is right to incur yet further costs in contesting the costs order made by Lewison J. The wreck of the Testator's estate is already total, there can be nothing left in it for anyone.”

In addition to the concern there expressed it is remarkable that there is no evidence that the enquiry directed by paragraph 2 of the costs order has taken place nor any indication that, if it had, David would be likely to be ordered to pay any amount towards Anne’s costs of the action. In those circumstances it would be open to this court to dismiss this part of the appeal as academic.

But there is no merit in this part of the appeal either. In his costs judgment Lewison J considered a submission made on behalf of David that Anne should pay his costs notwithstanding that he had lost and she had won. Lewison J rejected each of the grounds relied on. In paragraph 13 he added:

“What, in my judgment, really caused the litigation was David's refusal to understand or acknowledge the character or depth of the relationship between his father and Anne. The family disapproved of Robert's choice of Anne and were suspicious of her motives. Robert was aware of their disapproval, yet stuck to his guns. It was the fact that Robert left his only valuable asset to Anne that was, in my judgment, the trigger for the litigation. The cause was not, therefore, either Robert's mental capacity or Mr Ferguson's conduct.”

The judge then considered whether the proper order as between David and Anne was no order as to costs. In that respect he concluded in paragraphs 17:

“More cogent, to my mind, is the argument that the second established exception applies. This, it will be recalled, is that if the circumstances lead reasonably to an investigation of the matter, then the costs may be left to be borne by those who have incurred them (i.e. there should be no order for costs as between the contending parties). Although Henderson J noted in Kostic v Chaplin that recent cases had narrowed the scope of the first established exception, he made no similar remark in relation to the second. There is, I think, still a public interest that where reasonable suspicions are raised about the validity of wills they should be proved in solemn form. [Counsel for David] submits that David had to come to court "if the evidential fog and suspicion surrounding the state of the testator's mind and health and his execution of the will were to be lifted". The evidential fog cannot but recall the opening of Bleak House; just as the exhaustion of the estate in legal costs cannot but recall its ending. Nevertheless, despite its colourful language, there is a real point here. In my judgment the circumstances of Robert's disability coupled with the information given to David did raise a reasonable suspicion about the validity of the will. In my judgment, therefore, there was justification for an investigation of the matter. All other things being equal, this would have led me to order that costs should lie where they fall as between David and the other parties.”

The judge then considered an offer made by Anne on 8th August 2005 to settle both this action and a claim by David for relief under the Inheritance (Family and Dependents) Act 1975 for a payment of £10,000 with no order for costs in either proceeding. In that respect he said:

“18...The latter claim was not before me. The offer of settlement was a payment of £10,000 by Anne with no order for costs. The costs incurred by the estate and by Anne at that time stood at £12,000; and the estate's solicitors predicted (rightly as it turned out) that if the dispute went to trial it was likely that the costs of all the parties could exceed the sums available in the estate. Although I cannot of course form a concluded view about David's Inheritance Act claim the fact is that he is a healthy young man who, at least at the trial date, was in employment. Successful claims under the Act in those circumstances are rare. Although I have said that there is, in my judgment, a public interest that where reasonable suspicions about the validity of a will are raised, it should be proved in solemn form, that public interest cannot justify the potential exhaustion of the estate in legal costs. Even in the case of a contested probate action there is also a public interest in encouraging sensible settlements. In my judgment, the making of that offer was a reasonable offer, and one which David ought to have accepted. At that time Anne was not a party to the litigation. She became a party on her own application (opposed by David) on 28 November 2005.

19.

The offer was not, however, in a form that complied with CPR Part 36 since it contained its own terms about costs. I do not, therefore, consider that it would be right for an offer in that form to attract the costs consequences that would attach to an offer which did comply with Part 36. However, in the light of that offer, I consider that David should in principle pay Anne's costs on the standard basis from the date of her joinder as a party.

20.

David has however been in receipt of funding from the Legal Services Commission. So any costs order made against him is likely to be of academic interest only. But I am not in a position to determine how much it is reasonable for him to pay. That will have to be decided by a costs judge. The only finding of fact that I make which may be relevant to that determination is that in my judgment it was unreasonable for David to have refused the offer made to him on 8 August 2005.”

Counsel for David now submits that the judge was wrong in three respects, namely that (1) the offer was reasonable, and (2) should have been accepted by David and (3) David’s refusal of it was unreasonable. In relation to the first point counsel for David points out that given the costs then incurred the offer valued David’s prospects in both actions as nil. In relation to the second, reliance is placed on the fact that the medical and Social Services records relating to the Testator had not by then been made available to David. In relation to the third counsel points out that the offer was never refused. Ultimately the claim was mediated but notwithstanding some advance was never concluded.

I would reject each of the grounds summarised in the foregoing paragraph. The decision of Lewison J and this court demonstrate that David’s probate claim did indeed have no value. There is no evidence to indicate that the judge’s assessment of the value of the Dependents claim in paragraph 18 of his costs judgment was wrong. Accordingly there is no material on which to put any value on this claim either. At the time the offer was made it was reasonable. David’s failure to accept it because he wanted to see the medical and social services records does not undermine the reasonableness of the offer when made. Implicit in David’s decision not to accept the offer pending receipt of the records was the acceptance of the risk as to costs if they did not, in the event, assist his claim.

Finally I should record the submission of counsel for David that the judge’s observation that:

“Even in the case of a contested probate action there is also a public interest in encouraging sensible settlements.”

is wrong in law because it involves rewriting the observation of Sir James Wilde in Mitchell & Mitchell v Gard & Kingswell (1863) 3 Sw. & Tr. 75 that

“...doubtful wills should not pass easily into proof by reason of the cost of proving them.”

I have no hesitation in upholding the judge’s statement. The overriding objective enjoins the court to deal with cases justly by saving expense, see CPR Rule 1.1(2)(b). In addition the court is required to have regard to any admissible offer to settle to which Part 36 does not apply, see CPR rule 44.(4)(c). Further there is the very real concern that the costs of proceedings is inhibiting access to justice to all parties not just to he who seeks to require a will to be proved in solemn form. The judge was right to consider both of them. In my view the balance he struck was, on the facts of this case, the correct one.

For these reasons I would dismiss this part of the appeal also. It follows that the appeal as a whole should be dismissed. With regard to the costs of the appeal I would make the same order as Lewison J made in paragraph 2 of his order to include the costs of the executors, assessed on the standard basis, as well as the costs incurred by Anne so assessed also. Insofar as the executors do not recover their costs from David or the Legal Services Commission they are entitled to retain them, as assessed on the indemnity basis, from the remaining assets (if any) in the estate of the Testator.

I turn then to the application made on behalf of David for leave to appeal to the Supreme Court. The reliance on the Mental Capacity Act 2005 is misplaced because it was not in force at the times material to this appeal. The other grounds relied on are simply those this court has already rejected. There are no assets left in the estate to make an appeal cost effective or otherwise than academic. I would refuse the application.

Finally I would ask counsel for all parties to agree a minute of our orders for approval of this court.

I agree.

I also agree.