Corbett v Bond Pearce (a firm)

The claimant is William Corbett, who has appeared in person. He sues in his capacity as the administrator of the estate of the late Miss Nancie Tresawna. The defendant is Bond Pearce, a firm of solicitors, which was represented by Mr Hochberg. The claim is for damages for professional negligence. It arises against the following background.

Miss Tresawna made a will on 3 February 1989 (“the February will”) under which Mr Corbett was a joint residuary beneficiary. She purportedly made a subsequent will dated 26 December 1989 (for reasons explained later, I will call this “the September will”) which made different dispositions, including of her residuary estate. Bond Pearce acted for Miss Tresawna in relation to the preparation and execution of the September will. Following her death on 6 February 1991, Mr Corbett challenged that will in probate proceedings in the Chancery Division. The September will was upheld at first instance, but in January 1996 the Court of Appeal reversed that decision and pronounced in favour of the February will.

In the meantime, in September 1995, Mr Corbett had commenced the present claim against Bond Pearce. The writ, as amended in 1997, claims damages for the loss suffered by Miss Tresawna’s estate as a result of Bond Pearce’s negligence whilst acting for Miss Tresawna in relation to the preparation and execution of the September will. The primary head of claim was for damages to compensate the estate for the costs of the probate proceedings, which were ordered to be paid by the estate. The claim has had a complicated history. Liability has been admitted but the quantum of the recoverable loss (if any) has caused much dispute. This is my judgment on the damages the estate is entitled to recover.

Mr Corbett is unmarried and has no children. He is a farmer He has a married sister, Mrs Arthur, who has two sons, James and Jonathan (as I will call them), who were both minors at all material times. Miss Tresawna was Mr Corbett’s and Mrs Arthur’s unmarried aunt. She lived at Myrtle Cottage, Grampound, Truro, Cornwall. On 3 February 1989, at the age of 79, she made the February will by which she provided, so far as material, as follows. She revoked her prior wills and appointed John Somerville, Glending Wight and John Foster (her solicitor, who had prepared the will) as her executors and trustees. She gave the following specific legacies: (i) a silver tea tray and a portrait of Henry Tresawna to Mr Corbett; (ii) the rest of her tea service to Rosemary Somerville; (iii) her painting of Botallack Mine to the Royal Institution of Cornwall; (iv) her car to Elsie Brew. She gave the following pecuniary legacies: (i) to Mr Somerville (a non-professional executor) a sum equal to the profit costs of handling her estate, (ii) £250 to Nicola Carlyon (her goddaughter); (iii) £250 to Probus Parish Church Council; (iv) £250 to Elsie Brew; (v) £500 to Margaret Welman.

Miss Tresawna dealt as follows with her land and residue. She devised Lamellyn Farm, Probus (“Lamellyn”), and her land at Truck, to Mrs Arthur (to whom Lamellyn was already let), subject to the gift bearing its own inheritance tax (“IHT”). She devised Tolcarne Merrock Farm, St Mawgan, Newquay (“Tolcarne”) to Mr Corbett (to whom it was already let), also subject to IHT. She devised Myrtle Cottage, Grampound (the freehold property she lived in) to Mr Corbett and Mrs Arthur as tenants in common in equal shares. She also devised to them as tenants in common (subject to IHT) her seven-eighths share in the freehold properties in Probus known as the Probus Trust Properties (Mr Corbett owned the other eighth share). These properties comprised two cottages called Tippett’s Cottage and Myrtle Cottage (not to be confused with Myrtle Cottage, Grampound). She gave her residuary estate to Mr Corbett and Mrs Arthur in equal shares. Clauses 15 to 19 contained administrative provisions and a professional charging clause.

By July 1989 Miss Tresawna had decided to make lifetime gifts of Lamellyn to Mrs Arthur and of Tolcarne to Mr Corbett; and had also decided to change her testamentary dispositions. Upon the lifetime gifts being made, the two farms would fall out of her estate. Miss Tresawna wished to make a new will omitting any reference to them and incorporating the other proposed changes, the main one being as to the disposal of her residue. The solicitor whom she had previously instructed, Mr Foster, had ceased to practise and so she instructed Bond Pearce, the defendant firm, to advise her on the drafting, preparation and execution of her new will, which they did.

Mr Nicholson of Bond Pearce handled the matter. He produced a will which was ready for execution by Miss Tresawna in September 1989. The gifts of the two farms had not, however, yet been effected (that was being handled by Mr James of Bond Pearce) and Miss Tresawna did not want to execute the new will until they had been: she recognised that if she executed it immediately and promptly died, the two farms would form part of her residuary estate. Mr Nicholson’s advice to her – the cause, so far, of nearly 15 years’ litigation - was that she should leave the will undated and execute it on the basis that it would take effect when the two gifts were subsequently perfected.

Miss Tresawna accepted that advice and executed the will on about 29 September 1989. In the subsequent probate proceedings the court found that her intention was that the will should only take effect upon being subsequently dated following the perfection of the two gifts. The will itself said nothing to the effect that it was being executed on this conditional basis. The two gifts were later made on 25 December 1989, following which Mr Nicholson dated the will 26 December 1989. As it had been executed in the previous September, it has throughout the litigation been called “the September will”.

Miss Tresawna provided as follows by the September will. She revoked her prior wills. She appointed John Newey (a surveyor, her land agent) and David Bennett (her accountant) as executors and trustees. She gave the following specific legacies free of IHT: (i) the remainder of her tea service to Rosemary Somerville; (ii) her Botallack Mine Painting to Mr Newey; (iii) her car to Elsie Brew. She gave the following pecuniary legacies free of IHT: (i) £250 to Nicola Carlyon; (ii) £500 to Molly Corbett (her sister); (iii) £500 to Elsie Brew.

Miss Tresawna disposed of her land and residue as follows. (i) She devised to Mrs Arthur her land at Truck and her seven-eighths share in Tippett’s Cottage, Probus (including two back gardens, a store room with one back garden and a builder’s yard); and (ii) she devised to Mr Corbett her seven-eighths interest in Myrtle Cottage, Probus with its gardens. The IHT attributable to those gifts was to be borne by residue. She left her residuary estate to James and Jonathan. Clause 7 contained administrative provisions and a professional charging clause.

Mr Corbett raised before me the question whether, in 1986, Miss Tresawna had made an effective memorandum of wishes as to the post-death disposition of her chattels. The memorandum was not signed by Miss Tresawna, let alone attested as a testamentary document, and so it did not take effect as a will. The February will revoked all prior testamentary dispositions and so would anyway have revoked any such disposition effected by the memorandum; and there is no question of the February will having incorporated it. I say no more about the memorandum than that (as Mr Corbett accepted) it was of no relevant effect and can be ignored.

Miss Tresawna died on 6 February 1991. Her main assets included Myrtle Cottage, Grampound, the land at Truck, the two Probus cottages and a portfolio of investments. Her estate was valued for probate at £353,761 net.

Mr Corbett objected to probate of the September will being granted. He commenced an action in the Chancery Division on 5 June 1992 by which he sought proof in solemn form of the February will and challenged the validity of the September will. He did so on the basis that Miss Tresawna had no immediate testamentary intention when she executed it, his point being that it was fatal to its validity that she had executed it on the conditional basis that it should only take effect once the lifetime gifts of the farms had been effected and the will dated.

The trial of the action occupied two days in March 1994 before Mr Eben Hamilton QC, sitting as a Deputy Judge of the Chancery Division. Mr Corbett was represented by counsel. So was Mr Newey, who sought to uphold the September will. Mr Bennett was not represented, he having agreed to act as the court directed. Mrs Arthur, James and Jonathan were together represented by counsel and also argued in favour of the September will. Three other beneficiaries joined as defendants were not represented and took no part.

By his decision dated 5 May 1994 (Corbett v. Newey and Others [1994] Ch 388), Mr Hamilton held there was nothing wrong with Miss Tresawna’s conditional execution of the September will, which he upheld. But Mr Corbett knew better and on 26 January 1996 the Court of Appeal (Butler-Sloss, Waite and Morritt L.JJ) explained why they agreed with him, namely because a will that is on its face unconditional must be executed with immediate testamentary intent. They reversed Mr Hamilton’s decision and pronounced against the September will and in favour of the February will (Corbett v. Newey and Others [1998] Ch. 57).

The Court of Appeal dealt with the costs of the probate proceedings at an adjourned hearing on 15 February 1996. The adjournment was to enable Mr Corbett to give notice in the meantime to the Solicitors Indemnity Fund (“SIF”) that he intended to seek an order for costs against it. SIF had agreed to indemnify Mr Newey against his costs of the probate action, both on the appeal and below. Mr Newey is not a solicitor, but SIF’s interest was as indemnity insurers in potential negligence claims against Bond Pearce: a successful propounding of the September will would have reduced, if not extinguished, such claims. The parties represented on 15 February 1996 were Mr Corbett and Mr Newey, each represented by counsel; Mrs Arthur, James and Jonathan, together represented by counsel; and SIF, represented by Mr Hochberg.

Mr Corbett had brought SIF before the court in order to argue that, as the probate proceedings had been caused by Bond Pearce’s negligence, the court should there and then order SIF to pay all the costs of the proceedings. SIF’s response was that the proper course was to leave it to the properly constituted personal representative of Miss Tresawna’s estate (which at that stage Mr Corbett was not) to bring proceedings for negligence against Bond Pearce and seek to pick up the costs of the probate proceedings as part of the recoverable damages. A further point that Mr Corbett argued was whether Mr Newey should have a separate set of costs, his point being that the interests of those concerned to uphold the September will had been adequately represented by Mrs Arthur, James and Jonathan.

The court decided against both points advanced on Mr Corbett’s behalf. The costs of all parties to the probate action, both in the Court of Appeal and below, were ordered to be paid out of the estate; and Mr Corbett was ordered to pay SIF’s costs of the hearing of 15 February 1996.

On 28 October 1996 Mr Corbett obtained a grant of letters of administration of Miss Tresawna’s estate, with the February will annexed (Mr Wight, a named executor, had died and the two surviving named executors had renounced probate). By October 1998 Mr Corbett, as such administrator, was faced with having to pay Mr Newey’s costs of the probate action and appeal in fairly short order. He did not wish to pay them and so on 7 October 1998 he issued a summons seeking a rehearing by the Court of Appeal of its costs order made on 15 February 1996 as regards Mr Newey.

The summons came before the Court of Appeal (Morritt, Auld and Clarke L.JJ) on 30 March 1999. Mr Corbett appeared in person, Mr Newey by counsel. By then Mr Corbett’s negligence claim on behalf of the estate was under way against Bond Pearce, who had admitted liability, although damages were in issue. Bond Pearce’s stance on damages was that, as they had compensated the residuary beneficiaries disappointed by the failure of the September will (another chapter, to which I shall come), there could be no further recovery from them by the estate because that would subject them unjustly to an element of double recovery. Mr Corbett’s stance was that that was wrong and that the estate was entitled to recover, as part of its recoverable damages, the costs of the probate proceedings that it had been ordered to pay, including those (if any) payable to Mr Newey: but the primary object of his summons was to avoid any such liability to Mr Newey altogether.

Mr Corbett’s point before the Court of Appeal was that Miss Tresawna’s estate had not been represented by its administrator (or by anyone) when the costs order was made on 15 February 1996 and that, had it been represented, the court would not have made the costs order in favour of Mr Newey that it did. His immediate concern, however, was that, if the estate did have to pay Mr Newey’s costs – and also had to do so with any sort of promptness - it would (i) have to realise the remaining land and cottages in it (comprising the two Probus cottages and the land at Truck), which the beneficiaries entitled to them under the February will (namely, he and Mrs Arthur) might wish to retain, and (ii) thereby incur a substantial liability to capital gains tax (“CGT”). That would cause loss which could not be compensated by subsequent success in the negligence claim against Bond Pearce.

The Court of Appeal (by the judgment delivered by Morritt LJ) was sympathetic to that last aspect of Mr Corbett’s position. Morritt LJ’s (strictly provisional) view was also that Bond Pearce’s double recovery point was not obviously right, because the estate’s loss was distinct from that of the disappointed residuary beneficiaries: he regarded the estate as having a good arguable claim for damages. But that was not the issue before the court, which was whether the Newey costs order should be set aside.

In the event, the court did not focus on that issue, let alone decide it. It focused instead on providing an interim practical solution to Mr Corbett’s immediate concern, a solution which was the court’s own idea. The court was satisfied that the precise timing of the payment of Mr Newey’s costs was not of obvious moment to Mr Newey: neither he nor SIF had paid his solicitors their costs and so, on the face of it, it was the solicitors who were losing out, and the court knew nothing of the contract between them and SIF. The outcome was that the court adjourned Mr Corbett’s application until after the known outcome of the negligence proceedings, the court’s understanding being that they might be resolved by the trial of a proposed preliminary issue. In the meantime the court stayed the order of 15 February 1996 in so far as it required a payment of Mr Newey’s costs, although it did not also stay the process of their taxation. The price of that order was that Mr Corbett was directed in the interim (i) to make no payment out of the estate to any beneficiary and (ii) to make no payment to himself in respect of his costs of the estate’s negligence action against Bond Pearce. SIF was to be entitled to apply within 28 days to vary or discharge the order. If they did not, the restraint in (ii) was to be lifted. The costs of the application were reserved. SIF made no such application and so the stay remained in place.

On 7 December 1999 Mr Newey’s taxed costs of the probate action and appeal were certified at a total of £52,614.45 (including VAT).

On 5 July 2001 Chadwick LJ continued the stay imposed by the order of 30 March 1999. On 1 August 2003 the adjourned summons of 8 October 1998 came back before the Court of Appeal, on a hearing fixed for Mr Corbett to show cause why it should not be struck out. It again came before Chadwick LJ, sitting as a single Lord Justice. Mr Corbett appeared in person and Mr Newey was represented by counsel. Mr Corbett consented to an order dismissing his summons and he was ordered to pay Mr Newey’s costs of it.

On 11 August 1995 James and Jonathan issued a claim in the Chancery Division for damages for negligence against Bond Pearce. At that point in the story, the September will had been upheld by Mr Hamilton QC, but James and Jonathan, as the two residuary beneficiaries named in it, faced (at best) the prospect of receiving a residue diminished by the costs of the probate action, a diminution which they claimed Bond Pearce had caused and so should make good. The appeal against Mr Hamilton’s decision was by then also pending and if, as happened, that decision were to be reversed, they would receive no residue at all. The original particulars of claim contemplated the possibility of such a reversal and they were amended following the Court of Appeal’s decision in January 1996. The claim, as amended, was that Bond Pearce’s negligence had frustrated James’s and Jonathan’s expectations (and Miss Tresawna’s intentions towards them) and was a “disappointed beneficiaries’” claim founded on the principle explained by the House of Lords in White and Another v. Jones and Another [1995] 2 AC 207, the speeches in which had been handed down on 16 February 1995.

That claim was settled by agreement, approved by the court on behalf of James and Jonathan (both minors) by an order of 4 December 1997. They were paid £275,000 (which was settled on trust for them), a sum representing the full amount of their claim and interest and calculated by reference to the amount of Miss Tresawna’s notional net residuary estate under the September will undiminished by the costs of the probate proceedings.

This claim was started by a writ issued by Mr Corbett in the Queen’s Bench Division on 21 September 1995. He had not yet obtained a grant of letters of administration of Miss Tresawna’s estate (the appeal in the probate action was still pending), and so he had no title to sue on behalf of the estate. On one view his claim was brought in his personal capacity as a beneficiary under the February will. No doubt Mr Corbett issued the writ when he did for fear that otherwise he would or might be faced with problems under the Limitation Act 1980 (the September will had been executed just under six years earlier). I have, however, explained that he later obtained a grant of letters of administration on 28 October 1996. The ultimate outcome of a contested amendment application in September 1997 was that the original writ was amended to claim “damages in respect of loss and damage suffered by the estate of Miss N.A. Tresawna arising out of the negligence of the Defendants whilst acting as Solicitors and professional advisers for and in relation to inter alia, the preparation and execution of [the September will]: the damages are claimed on behalf of the estate both in contract and tort.” That made it plain that the claim was exclusively one by the estate. In particular, it was not a “disappointed beneficiaries’” claim.

Bond Pearce admitted negligence on 12 November 1998. Following that admission the parties agreed a statement of facts; and certain preliminary issues as to the recoverable measure of damages were directed to be tried. They were as follows:

“(1)

In the above circumstances, is the claimant, as personal representative of Miss Tresawna, able to recover damages for breach of contract or for negligence against the defendant firm by reference to the loss suffered by the estate by reason of either or both of the following: (a) the diminution of the value of the estate attributable to the costs payable in the Will Action; or (b) any other loss or liability incurred by the estate as a result of the Will Action, the costs order made in the Will Action and the delay in the administration of the estate caused by the defendant’s breach of contract and negligence?

(2)

Does the answer to the questions posed in paragraph (1) above, or any part of it, depend upon whether the estate, after payment of the liabilities referred to in sub-paragraphs (a) and (b), would contain sufficient assets to discharge all the creditors of the estate, distribute specific legacies and still leave a balance to form a residue for distribution in accordance with the terms of the February will?

Those issues were decided by Eady J on 25 May 2000 (Corbett v. Bond Pearce (a firm) [2000] Lloyd’s Rep. PN 805). He held that Mr Corbett, as Miss Tresawna’s personal representative, was entitled to recover damages by reference to the loss suffered by the estate under both heads described in paragraph 1(a) and (b); and he answered the question raised by paragraph (2) in the negative. He ordered Bond Pearce to pay Mr Corbett £24,500 in respect of the costs of the preliminary issues and gave permission to appeal.

That was the high point for Mr Corbett in his litigation. He could hardly have done better, although it is improbable that he regarded the outcome with great surprise. On the face of things, the case might be regarded as straightforward. Bond Pearce had given negligent advice in relation to the execution of the September will. That advice had caused expensive probate litigation, the costs of which (including Mr Newey’s, who had been funded by SIF) were ordered to be paid by the estate. It had, therefore, subjected the estate to a liability to which it would not otherwise have been subject. What, Mr Corbett might ask, can possibly have been wrong with Eady J’s order that Bond Pearce must compensate the estate in damages for the negligent imposition of that liability? Unfortunately for Mr Corbett, as the Court of Appeal later explained, the answer is “almost everything.”

Bond Pearce’s appeal against Eady J’s order came before the Court of Appeal (Brooke, Longmore L.JJ and Sir Christopher Slade) on 9 March 2001. The court delivered its reserved judgment on 11 April 2001 explaining why it was allowing the appeal (Corbett v. Bond Pearce (a firm) [2001] 3 All ER 769). The court awarded Bond Pearce their costs both of the appeal and below and ordered Mr Corbett to repay the £24,500 paid to him under Eady J’s order. The Court of Appeal’s decision was explained in the judgment delivered by Sir Christopher Slade, with which Brooke and Longmore L.JJ both agreed, with neither adding a separate judgment of his own.

Sir Christopher explained that the law in this area had developed in stages. He referred first to Otter v. Church, Adams, Tatham & Co [1953] Ch 280, in which Upjohn J had held that a personal representative’s claim for damages occasioned by a wrong to the deceased required the damages to be ascertained in accordance with the principles affecting damages for breach of contract “at the time that the damage accrues.” Sir Christopher continued:

“17.

No decision has been brought to our attention in which the correctness of the decision in Otter’s case has been questioned. In the present case, since negligence on the part of the defendants, involving a breach of duty to the Testatrix, is admitted by the defendants, the claimant, as her personal representative, has, at least at first sight, a good cause of action. But the damages fall to be ascertained at the time when the damage accrued after her death. And the problem is to determine where the burden of that damage truly fell.”

The last sentence encapsulated the basis on which the Court of Appeal approached, and ultimately decided, the appeal. In explaining that approach, Sir Christopher proceeded next to summarise the effect of White v. Jones, which establishes that in certain circumstances solicitors preparing a will for a testator can owe a duty of care to the intended beneficiaries, being a duty which, if breached, may entitle those beneficiaries to damages if their testamentary expectations are disappointed; and he considered how that principle had been applied by the Court of Appeal in Carr-Glynn v. Frearsons (a firm) [1999] Ch. 326. In that case the defendant solicitors had prepared the testatrix’s will, by which she purportedly gave her niece her share in a property that she owned jointly with her nephew. On her death her share in the property accrued by survivorship to the nephew and so the gift failed. The niece sued the solicitors for negligently failing to advise the testatrix that she needed to sever the joint tenancy if her proposed testamentary gift was to take effect. The Court of Appeal, reversing the judge, held that the niece was entitled to damages. The difficulty in the case was that it was one in which it could be said that the facts gave rise to circumstances in which there could be a claim not just by the niece, but also by the estate: the personal representatives could claim that the negligence caused the estate to have been diminished to the extent of the unsevered half share. The judge had concluded that it would be unjust if the solicitors could be faced with two separate claims (by the niece and by the estate) for identical loss.

The Court of Appeal agreed with this in principle but met the problem by analysing the nature of the duty owed by the solicitors. That involved a consideration of the principle that the duty must be regarded as limited by reference to the kind of loss from which they must keep harmless those to whom the duty is owed (Caparo Industries plc v. Dickman [1990] 2 AC 605, at 627, per Lord Bridge of Harwich; and South Australia Asset Management Corp v. York Montague Ltd [1997] AC 191, at 212, per Lord Hoffmann). Sir Christopher summarised the court’s reasoning in Carr-Glynn as follows:

“23.

… This duty, it considered, was a duty to take care that the property formed part of the testatrix’s estate, so that it could pass to the specific legatee on her death; the loss from which the testatrix and her estate was to be saved harmless was the loss which those interested in her estate, whether as the specific legatee or as creditors, would suffer if, as a result of the solicitors’ negligence, effect could not be given to her testamentary intentions. It is in my judgment necessarily implicit in the judgment of Chadwick LJ that the court would have regarded the personal representatives themselves as having no right of recovery in respect of the lost half share of the relevant property, at least if the estate was solvent. Any such recovery would have enured for the benefit of the residuary beneficiary rather than the intended specific legatee. The court’s objective was to ensure that the compensation ultimately found its way to the pocket where the loss had ultimately fallen.”

Sir Christopher referred next to Worby v. Rosser [1999] Lloyd’s Rep PN 972, also a decision of the Court of Appeal. He derived from it a recognition that:

“24.

… in a case where a solicitor’s negligence in regard to the preparation or execution of a will was the cause of expensive probate proceedings after the testator’s death, this could give rise to a claim for damages against the solicitors at the suit of the testator’s personal representatives for the benefit of the estate generally. …”

In seeking to uphold Eady J’s decision, Mr Corbett’s argument to the Court of Appeal was that Bond Pearce’s negligence had caused damage to the estate represented by the costs of the probate action, which would not have been incurred but for such negligence. James and Jonathan had since been compensated as disappointed residuary beneficiaries, but the estate’s claim did not seek to impose double liability on Bond Pearce, since the estate’s loss was a separate and distinct one. Whilst recognising the logical force of the argument, Sir Christopher said that it failed to give sufficient consideration to the question whether Bond Pearce’s duty when advising in relation to the September will was a duty in respect of the kind of loss which was in the event suffered by Miss Tresawna’s estate, and he again referred to Lord Hoffmann’s speech in the South Australia Asset Management case. He explained his reasoning for allowing the appeal as follows:

“31.

Accordingly, in the present case, it is necessary to determine the scope of the duty of care owed by the defendants to the Testatrix by reference to the kind of damage from which they had to take care to keep her harmless, having regard to the terms of their retainer. Having such regard, I think it is clear that this kind of damage was the loss which those who would become interested in her estate, whether as beneficiaries under the September will or as creditors, would suffer if effect were not given to her latest testamentary intentions. It was not the loss which the various classes of beneficiaries named in the February will would suffer in that event, because the Testatrix had no wish or intention that the February will should have any effect after she had signed the September will and the two deeds of gift had been perfected.

32.

The duties owed by the defendants (in contract) to the Testatrix and (in tort) to the beneficiaries named in the September will were not inconsistent, but complementary. In the light of Carr-Glynn v. Frearsons (a firm) [1998] 4 All ER 225, [1999] Ch 326, the defendants were under an indisputable liability to compensate the residuary beneficiaries under the September will for the full amount of the residuary estate, undiminished by the costs of the will action, and they were in my judgment right in doing so. However, following what (as explained above) I understand to be the rationale of that decision, I think that the defendant could not at the same time be under a liability to the Testatrix’s personal representative in respect of these same costs. It is true that in Carr-Glynn’s case the damages recovered by the disappointed beneficiaries represented precisely the same sum as that which the testator’s personal representative would have sought to recover if they had chosen to sue the solicitors – namely the value of the lost half share of the relevant property. If one looks at the present case as a matter of strict analysis, I agree with Mr Onions [leading counsel for Mr Corbett] that the damages which the claimant now seeks to recover do not represent precisely the same sum as that which formed part of the award to the disappointed beneficiaries. The former represents an actual sum which, as a result of the defendants’ negligence, is not included in the Testatrix’s net estate, falling to be dealt with under the February will. The latter was a notional sum which, but for the defendants’ negligence, would have been included in the Testatrix’s net estate, falling to be dealt with under the September will. In substance, however, the two sums represent the same monetary loss. In my judgment this is the relevant point for present purposes.

33.

The matter may be tested in this way. In Carr-Glynn’s case Chadwick LJ suggested ([1998] 4 All ER 225 at 253, [1999] Ch 326 at 338) that it would have been appropriate (though not essential) for both the personal representatives and the specific legatee to be parties to an action brought by either against the solicitors. In the present case, if a successful application had been made for the present claimant’s action and the disappointed beneficiaries’ action to be consolidated, the court, when the case came to trial, would in the light of Carr-Glynn’s case presumably have regarded itself as bound to award the disappointed beneficiaries damages equal in amount to the net residuary estate of the Testatrix, undiminished by the costs of the will action. I cannot, however, believe that the court would have proceeded in addition to award the claimant a sum of damages equal to the costs of the will action. To have done so would in substance have involved the double liability and double recovery which the Court of Appeal, in affording the remedy for the assistance of the disappointed beneficiary in Carr-Glynn’s case, was so explicitly determined to avoid. And the money recovered would have gone into the pockets of persons whom the Testatrix did not intend to benefit as her residuary legatees.

34.

In the events which have happened, if there proves to be a residue for distribution, the two residuary beneficiaries under the February will (Mrs Arthur and the claimant himself) will be better off than they would have been if there had been no breach of duty on the part of the defendants, because they would have received no part of the residuary estate if the September will had been effective. In reaching my conclusions, I am fortified by the consideration that if there proves to be a residue, justice scarcely demands that these benefits, unintended by the Testatrix, to whom alone the defendants owed the duty of care now invoked by the claimant, should be received by the claimant at the expense of the defendants.

Conclusions

35.

For the reasons set out above the judge’s order cannot stand, although I have great sympathy for him, because I have not found this an easy case. I would therefore allow this appeal. I would answer questions (1)(a) and (b) submitted to the judge in the negative. On the information before us, it appears that question (2) does not arise, but I would give the parties liberty to apply to a judge of the Queen’s Bench Division to apply on appropriate evidence, should it become relevant.”

In the light of Sir Christopher’s conclusions in paragraph 35, the material part of the Court of Appeal’s order was as follows:

“1.

this appeal be allowed and the order of the Honourable Mr Justice Eady dated 25^th May 2000 be set aside.

2.

questions 1(a) and (b) of the Preliminary Issues be answered in the negative and there be liberty to apply in respect of question 2 within forty-two days to a Queen’s Bench Judge.”

Paragraph 2 of that order appears to have reflected what the court had directed (as I have said, Brooke and Longmore L.JJ agreed with Sir Christopher’s judgment) although it gave rise to difficulties; and it appears, with respect, to have left obscure precisely what the court had intended. Brooke LJ, at the subsequent hearing in July 2004 to which I shall come, described it more shortly as “daft”, which may not have been entirely kind to Sir Christopher, since it was plainly based on what he had said in paragraph 35. In a judgment he delivered on 18 August 2005, Master Moncaster described the order as “incomprehensible.”

I shall refrain from adding any further critical epithets, but will at least say that I find it difficult to see quite what the Court of Appeal had in mind in giving the liberty to apply that it did in relation to question (2). In paragraph 15 of his judgment, Sir Christopher had said this:

“15.

While the defendants suggested in argument that there will be a residue for distribution in accordance with the terms of the February will, this is not at present accepted by the claimant. The effect of the defendants’ negligence, in financial terms, on the estate of the Testatrix has yet to be determined.”

That would suggest that Sir Christopher considered that any remaining claim for damages would or might turn on whether, on the figures, there was a residue for distribution in accordance with the February will, a question to which paragraph (2) of the preliminary issues was directed. In paragraph 35, however, he said that “On the information before us, it appears that question (2) does not arise …”, which may perhaps suggests that by the time he came to paragraph 35 he had in mind information indicating that there would be such a residue, in which case I infer that he took the view that no question under paragraph (2) could arise.

It is, however, clear that, despite the unqualified “no” in answer to question (1), the Court of Appeal was giving Mr Corbett liberty to apply to a judge – presumably for an inquiry as to damages – in the event that there would not be any such residue; and the inquiry that is now before me arises because Mr Corbett did so apply.

The critical question, however, is this: assuming there was no such residue as contemplated by question (2), what is the relevant measure of damages? Sir Christopher does not, so far as I can see, answer that question. But it appears to me, for reasons I shall come to, that the logic of his judgment is that the estate would only have any claim for damages if it turned out to be insolvent, that is if (after any necessary recourse to the assets the subject of the specific legacies) it could not pay its creditors; in which event it would have a claim for damages sufficient to enable it to do so. My understanding of Sir Christopher’s judgment is, however, that it would not have a claim extending to damages for the purposes of enabling the specific legacies given by the February will to be exonerated from such recourse. I expand on this below, but derive comfort for my own view from the fact that it is in line with that apparently favoured by Chadwick LJ at the hearing on 1 August 2003. I emphasise that the application then before Chadwick LJ was not one in the present claim, but in the probate appeal, and that he was doing no more than expressing his provisional views. But in paragraph 22 of the judgment he delivered, he said:

“22.

The third question is whether there is a real prospect of success in the solicitors’ negligence action, so as to justify a stay [of the enforcement of the Newey costs order] on the basis that there will be a pot of gold at the end of this particular rainbow. For my part, I have some difficulty in seeing how the action can succeed in the circumstances that, on the figures presently available, the estate is not insolvent – in the sense that it is unable to pay creditors – but is in a state in which there is no residue, so that recourse would have to be made to the assets comprised in the specific devises. But I have come to the conclusion that it is not for me to decide that question in these proceedings; these are not proceedings between Mr Corbett and Bond Pearce. That question should be decided in those proceedings in the light of the judgment of the Court of Appeal of April 2001. …”

On 19 June 2001 Morland J transferred the claim to the Chancery Division. On 16 July 2001 the Appeal Committee of the House of Lords refused Mr Corbett’s petition for leave to appeal against the Court of Appeal’s decision.

As matters have turned out, I do not need to focus further on the terms of the original order of 11 April 2001. That is because they underwent a dramatic transformation on 13 July 2004.

On 13 July 2004 there was a further hearing before the Court of Appeal in relation to the order of 11 April 2001. The court comprised Brooke and Longmore L.JJ, two of the prior three-man court. Mr Corbett appeared in person and Mr Hochberg appeared for Bond Pearce. That was an application by which Mr Corbett invited the court to revisit its decision of 11 April 2001 in reliance on the principles explained in Taylor and another v. Lawrence and another [2003] QB 528.It is no surprise that the court declined the invitation, but an important by-product of the hearing was that, by an application of the slip rule (CPR 40.12(1): “The court may at any time correct an accidental slip or omission in a judgment or order”), the court re-wrote the quoted part of its order of 11 April 2001 in the following expanded terms:

“2.

(a) If the Estate, after payment of the costs payable in the Will action and after taking into account any other loss or liability incurred by it as a result of the Will action, the costs order made in the Will action, and the delay in the administration of the estate caused by the Defendants’ breach of contract and negligence, nevertheless contains sufficient assets to discharge all its creditors, distribute specific legacies and still leave a balance to form a residue for distribution in accordance with the terms of the February will, then the Claimant, a personal representative of Miss Tresawna, is not able to recover damages for breach of contract or for negligence against the Defendants;

(b)

If on the other hand after payment of those costs and taking into account all such losses and liabilities the Estate does not contain sufficient assets for the aforesaid purposes, then the Claimant as such personal representative is able to recover such damages for breach of contract or for negligence against the Defendants as may enable it to discharge all its creditors and enable specific legatees under the September will to receive the legacies the Testatrix intended for them.

(c)

If the Claimant considers that (b) above is a likely outcome, then he has liberty to apply within 42 days to a High Court Judge for determination:

(i)

whether the Estate does not, on proper inquiry, contain sufficient assets for the purposes set out in (a) above;

(ii)

if so, what sum should be paid by the Defendants as damages for breach of contract or for negligence as prescribed in (b) above.

Whilst I regard the mechanics of that amended order as tolerably clear, I also regard it as raising difficulties of its own: the main one being that, with respect, I cannot understand its rationale. In a sense, that does not matter: I am not required to understand it. I am merely required to decide what, if any, damages it entitles Mr Corbett to recover. But since the amended order, its interpretation and explanation gave rise to extensive discussion before me, I propose to say something about it. In particular, Mr Corbett advanced a submission that the amendment could not be regarded as having been made under the jurisdiction conferred by Part 40.12(1), since he said it changed the substance of the intentions of Sir Christopher Slade’s judgment.

I presume first that the references to “specific legatees” in both paragraphs of the amended order are intended to include pecuniary legacies and specific devises, and neither party has suggested otherwise; and so I shall also use the phrase “specific legatees” in this sense. On that basis the scheme of the amended order is apparently as follows. The first task, arising under paragraph 2(a), is to identify the total of the various losses and liabilities of the estate that are referred to. Having done that, the next task is to determine whether the available estate assets (after payment of the costs of the probate action and taking account of the identified losses and liabilities) are sufficient (i) to enable the estate creditors to be paid in full, and (ii) to enable the specific legatees under the February will to be satisfied in full (that is, without any need for assets the subject of specific bequests or devises to be realised in order to pay creditors or for pecuniary legacies to abate). If the outcome is that the estate assets are so sufficient, then there is likely to be a residue, however nominal; and the consequence is that the estate has no claim for damages against Bond Pearce.

Leaving aside for the moment any attempt to identify the principle underlying the amended order, one’s knee-jerk reaction might be that if the outcome of the paragraph 2(a) inquiry is that the available estate assets are notso sufficient, the measure of recoverable damages would be the amount necessary to ensure that they were so sufficient. But no. The measure of damages in that event is explained by paragraph 2(b). That provides that if the available estate assets are insufficient to pay creditors in full and to enable the February specific legatees to be satisfied, the measure of damages is the amount necessary to enable the estate (i) to pay its creditors and (ii) to satisfy the specific legatees under the September will: as the order puts it, to “enable [those specific legatees] to receive the legacies [Miss Tresawna] intended for them” (my emphasis).

Whilst the estate creditors are likely to be same whichever will one is looking at, there is of course a difference in the specific legacies, and in the specific legatees, under the two wills. The specific legacies under the February will (so far as not adeemed and of current relevance) comprised (i) the tea service, (ii) the portrait of Henry Tresawna, (iii) the Botallack Mine painting (given to the Royal Institution of Cornwall), (iv) Miss Tresawna’s car, (v) pecuniary legacies totalling £1,250 (vi) Myrtle Cottage, Grampound, (vii) the land at Truck (given to Mrs Arthur), and (viii) the seven-eighths share in the two Probus cottages (given to Mrs Arthur and Mr Corbett in equal shares, and subject to the attributable IHT). The specific legacies under the September will comprised (i) the tea service, (ii) the Botallack Mine painting (given to Mr Newey), (iii) Miss Tresawna’s car, (iv) pecuniary legacies totalling £1,250, (v) the land at Truck (to Mrs Arthur), (vi) Tippett’s Cottage, Probus (to Mrs Arthur), and (vii) Myrtle Cottage, Probus (to Mr Corbett). In particular, therefore, the Probus Cottages were disposed of differently under the September will, and were devised free of the attributable IHT; and Myrtle Cottage, Grampound was no longer the subject of a specific devise but fell into residue.

The scheme of the amended order therefore raises an apparent eccentricity. To illustrate it simply, if the outcome of the paragraph 2(a) inquiry is such that it appears that the Botallack Mine painting can properly be delivered to the Royal Institution of Cornwall (the named legatee under the February will) without being resorted to in order to pay creditors, then well and good. But if it cannot, the scheme of paragraph 2(b) is that the estate is entitled to recover damages from Bond Pearce sufficient to enable the painting to be given to Mr Newey (the named legatee under the September will). Of perhaps greater potential moment, if Miss Tresawna’s interest in the two Probus cottages cannot be vested in Mrs Arthur and Mr Corbett in equal shares (their right under the February will, but subject to bearing the attributable IHT), the estate is entitled to compensation sufficient to enable them each to be given the different interests in the cottages devised by the September will but this time free of IHT.

This unusual scheme therefore raises this question: why is an investigation of the ability to pay creditors and satisfy legatees in accordance with the February will of relevance if the measure of damages is then calculated by reference to the ability to pay creditors and satisfy the different legacies provided by the September will? There is no obvious answer to that and, as I shall explain, it is clear that there is no mistake in the drafting of the amended order: it says what the Court of Appeal intended.

The starting point is that the present claim is indisputably, and exclusively, a claim for compensation for loss suffered by the estate. It is not a claim by, or on behalf of, disappointed specific legatees named in the September will.Whilst, therefore, it is obvious that the estate has an interest in ensuring that its creditors do not suffer in consequence of Bond Pearce’s negligence (and in fact they do not: the estate is not insolvent and so it has no claim in this respect), it is not obvious how it can have any entitlement to recover damages measured by reference to an inability to satisfy the specific legatees named in the September will. That, however, is the scheme of paragraph 2(b); and its language even contemplates that, once the estate has recovered sufficient damages to enable it to do so, it will actually satisfy the claims of the specific legatees named in that will.

I cannot understand this. The September will is a nullity, so held by the Court of Appeal in January 1996. The specific legacies purportedly provided by it have irredeemably failed. There is no question of those legacies being satisfied, no matter what damages are recovered under paragraph 2(b). That is because Mr Corbett’s duty is to administer the estate exclusively in accordance with the February will and it would be a breach of his duties to purport to satisfy any such failed legacies; and the Court of Appeal’s order of July 2004 could not change that. In particular, for example, at no point in the exercise will Mrs Arthur be entitled to insist (against Mr Corbett’s wishes) that Miss Tresawna’s seven-eighths interest in Tippett’s Cottage should be vested exclusively in her free of IHT (her right under the September will), any more than he could insist against her wishes on vesting Miss Tresawna’s like interest in Myrtle Cottage, Probus exclusively in himself. Any claim for compensation based on the failure of the specific legacies given by the September will could only be a “disappointed beneficiaries’” claim brought against Bond Pearce in accordance with White v. Jones principles. It could not be a claim by the estate, because such failure represents no loss to the estate. James and Jonathan brought a claim as disappointed residuary beneficiaries, but the specific legatees did not.

It is of course unlikely that most of the specific legatees named in the September will would have had much incentive to bring a disappointed legatee’s claim. There is no evidence as to the value of the Botallack Mine painting, but it is improbable that Mr Newey would have been minded to incur legal costs in arguing about it. Molly Corbett might not have thought it was worth pressing for compensation in respect of her failed £500 legacy, or Elsie Brew in respect of £250 of her £500 legacy (she receives £250 under the February will). Mrs Arthur received the land at Truck under both wills. As for the Probus cottages, Miss Tresawna’s interest in both was devised in equal shares to Mrs Arthur and Mr Corbett under the February will subject to IHT, whereas they were given one each under the September will free of IHT. Each sibling therefore suffered a loss as a result of the failure of the September will; and as the estate accounts show Tippett’s Cottage to be substantially more valuable than Myrtle Cottage, Mrs Arthur was the greater loser. She joined her sons in seeking to uphold the September will, although she has not brought a disappointed beneficiary’s claim.

These considerations do not, however, seem to me to be to the point, any more than does the fact that there is a relatively close coincidence between the specific legacies and the specific legatees under the two wills. First, there is in fact no exact identity between the two sets of legacies and legatees. Secondly, the relatively close coincidence between them nowhere features as an explanation for the amended order. I infer that in fact the Court of Appeal hardly focused on this coincidence at all, at any rate at the hearing in 2001. In paragraph 2 of his judgment, Sir Christopher Slade gave only a brief and general account of the specific legacies in the February will, making no reference to the dispositions of the Truck and Probus properties; and in paragraph 4, with uncharacteristic inaccuracy, he in fact misdescribed the specific legacies in the September will, saying that the land at Truck and bothProbus cottages were given to Mrs Arthur; and that “her home, Myrtle Cottage” (plainly a mistaken reference to Myrtle Cottage, Grampound) was given to Mr Corbett. Thirdly, whatever the closeness of identity between the two sets of specific legacies, the basis of the damages recoverable by the estate had to be identified as a matter of principle. And, with the greatest respect, it appears to me that the amended order may perhaps have lost sight of the applicable principles. The point is that the estate’s loss cannot be equated with the amount necessary (in theory, but not in practice) to enable the claims of disappointed beneficiaries under the failed September will to be satisfied because it cannot be a loss to the estate to be deprived of assets sufficient to enable it to meet obligations to which it is not subject. Nor do I understand Sir Christopher Slade’s judgment to have indicated that the measure of any damages recoverable by the estate was to be assessed on this basis. I do not overlook what he said in the second sentence of paragraph 31, but (leaving aside creditors) I do not read him as saying that any loss suffered by the September beneficiaries was a loss recoverable by the estate. How could it be?

I follow that paragraphs 15, 34 and 35 of Sir Christopher’s judgment suggest that he regarded the question whether the estate had any claim for damages as turning on whether there would be a residue distributable in accordance with the February will. If yes, there is no claim; if no, there will or might be. But he nowhere explained how they were to be calculated; and (i) any notion that they should be measured by reference to some duty owed to the specific legatees entitled under the September will is ruled out by basic principle; and (ii) any notion that they should be measured by reference to some duty owed to the specific legatees entitled under the February will is negatived by Sir Christopher’s observations in the last sentence of paragraph 31. As Sir Christopher explained when writing extra-judicially about this case in Chapter 6 of Rationalizing Property: Equity and Trusts (Essays in Honour of Edward Burn), edited by Joshua Getzler:

“The scope of the duty of care owed by the defendants to the testatrix had to be determined by reference to the kind of damage from which they had to take care to keep her harmless. This kind of damage was (exclusively) the loss which those who would become interested in her estate, whether as beneficiaries or creditors, would suffer if effect was not given to her latest testamentary intentions.”

Accordingly, I simply do not understand the amended order. I have, however, the benefit of a transcript of the proceedings leading to its making. Brooke LJ was its author and it is clear that his reference to the September will in paragraph 2(b) was no mistake. He said, for example, (at page 4G) that:

“What was left in order to put Miss Tresawna’s estate back into the position it would have been in but for the breach of duty was to ensure that the specific beneficiaries under the September will and the creditors were paid out, and Miss Tresawna’s estate was able to pay them, which wasn’t able to pay them because of the solicitors’ negligence. Now, that was the thinking behind Sir Christopher Slade’s judgment, with which Longmore LJ and I agreed …”.

He also said (at page 7C) in relation to the reason for the second preliminary issue:

“Because if they proved to be insolvent, then there would be a loss to the estate because it couldn’t satisfy the specific beneficiaries under the September will.”

Brooke LJ therefore clearly had it in mind that the estate could, and should be able to, recover damages sufficient to enable it to satisfy the failed specific legacies under the September will. For reasons given, that appears to me to have involved a misapprehension of the position. Moreover, if Brooke LJ’s quoted observations provide the solution to this type of situation, it would seem to follow that the supposed problem besetting the claim in White v. Jones was an imaginary one: the disappointment suffered by Ms White and her sister could have been met instead by a claim by the estate against the solicitors for damages in a sum sufficient to enable the two sisters to be paid out. But everyone regarded any such a claim as a non-runner, since such disappointment represented no loss to the estate: the question was whether the sisters could claim.

Mr Corbett was aware at the July 2004 hearing of the difficulties posed by the proposed amended form of order. At page 8 of the transcript, he drew attention to the February/September conflict, and proposed that paragraph 2(b) should refer to the February will, not to the September will. The court did not, however, agree. At page 9, Brooke LJ again made clear that, as he saw it, Bond Pearce had prevented Miss Tresawna from giving effect to her September intentions, that (at 9E) “it is the duty of the tortfeasor to put the injured party back in the position they would have been, if they hadn’t been negligent” and (at 9G) that Bond Pearce could have owed no duty to the February beneficiaries, who claimed under a will that, by September, she did not wish to make. That last observation chimes with what Sir Christopher Slade had said in paragraph 31 and ruled out a reference to the February will in paragraph 2(b): but, for reasons given, the reference to the September will in that paragraph appears to me, with respect, to have been mistaken: the estate was notinjured by the failure of the September legacies. The judgment that Brooke LJ delivered at the end of the argument does not deal with the interpretation of the amended order (it was confined to the question of whether the appeal should be re-opened), but in the post-judgment discussion he again affirmed that the reference to the September will in paragraph 2(b) of the amended order was what the court intended.

Having said all this, my views are of course irrelevant. The amended order explains the questions I have to answer and all I have to do is to answer them. To the extent that it entitles Mr Corbett to recover any damages, I take the view, however, that it gave him something to which he was not in fact entitled. I am bound to say that I am disposed to agree with Mr Corbett that the Court of Appeal probably had no jurisdiction under Part 40.12(1) to amend the April 2001 order in the way they did. But I had no argument to the effect that as that court is not one of unlimited jurisdiction I can and should simply ignore the amended order (see in this context Isaacs v. Robertson [1985] AC 97; and the opening sentence in paragraph 13 of the judgment of Lord Phillips of Worth Matravers MR in G v. Secretary of State for the Home Department [2005] 2 All ER 882). I express no view on this point. It would not, in fact, have been in Mr Corbett’s interest to have argued it, since it would at best have taken him back to the original order of 11 April 2001, on the effect of which I have expressed my views. It would have been in Bond Pearce’s interests to do so but they did not.

During the course of the argument, Mr Hochberg submitted that I might, and should, now approach the interpretation of paragraph 2(b) as if it had referred to the February will rather than the September will. He did so because he recognised that paragraph 2(b) as drawn is indefensible. I do not accept his submission as to the alternative interpretation of the amended order although I admire its nerve. The problem with it is that the internal inconsistency in, and fallacy of, the amended order are manifest, its difficulties leap from the page and Mr Hochberg had been provided with a copy of it in advance of the hearing on 13 July 2004. Its apparent shortcomings ought to have been obvious to a Chancery practitioner of his experience. Yet the transcript reveals that he chose to remain mute during the discussion about the February/September point and he knows that the amended order is precisely what the court intended. It is not open to Mr Hochberg to suggest now that it should be interpreted in the different way he proposed (which I anyway regard as equally misconceived in principle).

I round off this chapter by mentioning (i) that on 10 August 2004 Mr Corbett petitioned the House of Lords for leave to appeal against the Court of Appeal’s order but his application was refused on 17 January 2005. As I have said, the judgment was devoted to the Taylor v. Lawrence point; and (ii) during the adjournment between the two halves of the hearing before me, Mr Corbett sent a cri de coeur to Brooke LJ’s Clerk seeking clarification of the amended order, to which he received the response that “the Court of Appeal is not in the business of interpreting its own judgments”.

It is common ground that the situation predicated in paragraph 2(a) of the amended order (“the July order”) does not apply. In principle, therefore, damages are recoverable by the estate under paragraph 2(b). It is also common ground that the estate is solvent, in the sense that, bringing all estate losses and liabilities into account, no creditors will receive less than payment in full.

I consider that the determination of the recoverable damages in accordance with paragraph 2(b) requires the ascertainment of the following. The first task is to quantify the assets available in the estate to meet the claims of its creditors and satisfy the September specific legatees. By reference to paragraph 2(a), the assets so available have to be quantified after taking into account (i) the costs payable in the will action; (ii) any other loss or liability incurred by the estate as a result of the will action or the costs order made in that action; and (iii) any other loss or liability incurred by the estate as a result of the delay in the administration of the estate caused by Bond Pearce’s breach of contract and negligence. For practical purposes, the available assets have to be ascertained by leaving out of account the properties at Probus and Truck, because they form the subject of specific devises under the September will; and the theory of paragraph 2(b) is that they should be exonerated from estate liabilities and be capable of being distributed in specie to their respective devisees. (The tea service, the Botallack Mine painting and the car should also formally be left out of account, as in practice both sides have done. There is no evidence about the value of any of them. I was told that the tea service has been given to Rosemary Somerville and the car to Elsie Brew).

Having carried out this exercise, the next task is to identify the indebtedness to the estate’s creditors and the amount due to the pecuniary legatees under the September will. To the extent that the available assets are insufficient to satisfy those creditors and legatees in full, the estate is entitled to damages to make up the difference. I add that I consider that I have to conduct the relevant inquiry and determine the recoverable damages as at the date of this judgment. This is because it is obvious from the July order that the Court of Appeal required to be brought into account (inter alia) the liabilities of the estate accruing due as a result of the probate proceedings and the delay in the administration of the estate caused by Bond Pearce’s breach of contract and negligence. That exercise is necessarily a continuing inquiry.

I have explained that under the February will, Miss Tresawna’s seven-eighths share in the two Probus cottages was given to Mrs Arthur and Mr Corbett in equal shares, subject to the IHT payable in respect of them; whereas under the September will their different interests in the two cottages were given to them free of IHT. The IHT has in fact been paid out of the estate and the estate accounts show no claim to recover the IHT from Mrs Arthur and Mr Corbett, although this would be its right in accordance with the February will. Bond Pearce concede that, in the light of the July order’s emphasis on a notional administration in accordance with the September will, it is correct to approach the assessment of damages on the basis that the estate has no asset in the shape of a right to recover the IHT from Mrs Arthur and Mr Corbett. I am not convinced by the logic of that, but the concession has been made and I do not propose to question it.

The major issue between the parties has been as to the nature and extent of the costs, losses and liabilities that I have to take into account and which I have above broken down (by reference to the July order) into sub-paragraphs (i), (ii) and (iii). Mr Corbett’s stance has, as I shall explain, been to identify a long list of estate losses and liabilities suffered and incurred since Miss Tresawna’s death, which he claims fall to be brought into account in the damages calculation exercise. Bond Pearce’s position is that the burden is on Mr Corbett to show that, in respect of any particular head of claimed loss or liability, its suffering or incurring can fairly and reasonably be said to have been caused by the will action or by the costs order made in that action; or that it can be fairly be said to have been incurred as a result of the delay in the administration of the estate caused by Bond Pearce’s negligence and breach of contract. They say that it must be shown that any claimed head of loss or liability was not of too remote a nature for liability fairly to be imposed on them: these various heads of liability are, after all, the component elements which go towards the computation of the damages that Bond Pearce is being asked to pay in consequence of its breach of contract and negligence.

I regard Bond Pearce’s submissions as correct in principle. To illustrate the point by an extreme example, suppose that in 2000 Mr Corbett had decided in his capacity as administrator to make a controversial planning application for the development of one of the Probus cottages, which on refusal he had taken to appeal, and thence to the High Court and Court of Appeal, and had thereby incurred an enormous estate liability for costs. On the wording of the July order, it could perhaps be said that such a liability was a “liability incurred by the estate as a result of … the delay in the administration of the estate caused by the Defendants’ breach of contract and negligence …” and therefore needed to be brought into account in the damages calculation. But even if the wording might justify such an interpretation (as to which I have my doubts), I consider that it would be unlikely to reflect the underlying intention of the order since it would have the potential to give an unwarranted licence to Mr Corbett to lay all manner of voluntary, unforeseeable and unnecessary estate expense at Bond Pearce’s door. The function of the July order was to provide a formula for measuring the loss caused by Bond Pearce’s wrongdoing. On ordinary principles, that measure should be confined (so far as the claim in contract is concerned) to damage of a nature that was reasonably foreseeable as likely to result from the breach; and (so far as the claim in tort is concerned) to the type of damage reasonably foreseeable as a consequence. In addition, I consider it also relevant to consider whether the various heads of loss and liability were of a nature from which Bond Pearce had a duty to save the estate harmless, which may just be a different way of approaching the same question. I approach the resolution of the differences over the various heads of liabilities asserted by Mr Corbett with this in mind.

That conclusion leads to a consideration of what “creditors” are referred to in paragraph 2(b). That is because, having quantified the available estate assets, the next question is to what extent are they sufficient to discharge all “its creditors” and to satisfy all specific legatees. In the extreme example just given, I have concluded that the liability so imposed on the estate would not have been a liability (putting it shortly) caused by Bond Pearce. But would the creditors to whom such liability was incurred be “creditors” within the meaning of clause 2(b)? In my judgment, they would not. It would be odd if, although Bond Pearce were not answerable for that head of liability as being one “incurred by [the estate] as a result of the … delay in the administration of the estate caused by the Defendants’ breach of contract and negligence” they were nevertheless answerable for it simply on the basis that it constituted a liability to the estate’s “creditors”. Interpreting the July order as a whole, I prefer the view that “creditors” as there used cannot extend to liabilities incurred during the administration of the estate which do not have to be brought into account under the earlier provisions of the order; although I would accept that they must include liabilities of the estate as at the date of Miss Tresawna’s death. In fact, the latter liabilities have all been paid.

Mr Corbett’s approach has been to advance two alternative heads of claim. His primary claim is set out in Schedule 1 to his particulars of loss, which is further particularised in three Sub-Schedules 1A, 1B and 1C. Schedule 1 lists various “Current Liabilities of Estate (estimated)”, and totals £295,494. That is advanced as the recoverable measure of damages: and no attempt has been made to give credit in the damages computation for the available assets in the estate. Mr Corbett’s alternative claim is set out in Schedule 3 (“Losses Directly Attributable to Will Action”), which is supported by Schedule 2. Schedule 3 totals £276,075. There is of course an overlap between the figures making up Schedules 1 and 3. The underlying heads of claim making up the two alternative claims have been helpfully listed under 38 heads in a Scott Schedule. Some are admitted by Bond Pearce as properly included, but most are disputed. I consider that my first task is to identify which items are properly included, and to what extent; and which are not. I will list each of the 38 heads and make my findings on each of them. The various heads are listed under headings identifying to which of Mr Corbett’s various Schedules they respectively apply, and I will also identify the Schedules. In ruling on the various heads I will refer to claims as either being (or not being) a “relevant loss” or “relevant liability” for the purposes of the July order. To the extent that I hold that they are relevant losses or liabilities, I am not also saying that they form a head of recoverable damages. I am saying no more than that they have to be brought into account in the damages computation required by paragraph 2(b) of the July order which I have earlier explained.

Mr Newey’s costs of the probate action and appeal

These costs are agreed at £52,614, in respect of which interest (£42,091 as at 31 January 2006) has accrued and continues to accrue. It is agreed that this is a relevant liability.

Mr Newey’s costs of Mr Corbett’s summons to the Court of Appeal dated 7 October 1998

I have explained the background to this application. Mr Corbett agreed in his oral evidence that by this application he was seeking the setting aside of the Court of Appeal’s original costs order made on 15 February 1996 in favour of Mr Newey in the probate action. He made the application in person and he did so against the advice of counsel, his evidence being that counsel had changed his mind about its merits. He ran up substantial legal costs of his own in making the application, although I am not here concerned with those. When the matter came before the court on 30 March 1999 the application was adjourned, and I have explained that the court stayed the enforcement of Mr Newey’s costs order but not the process of its taxation. Mr Corbett agreed that he had not sought such a stay, which he said his solicitors and counsel had not advised him about. I find that the stay was proposed by the court of its own motion. Mr Corbett accepted that, had he simply sought such a stay by his application, Mr Newey would be likely to have agreed to it; and the fact that SIF did not take up the liberty to apply to have the stay discharged shows that they were not likely to have opposed it either. He agreed also that in August 2003 he consented to the dismissal of his October 1998 application and was ordered to pay Mr Newey’s costs of it.

The costs of this exercise payable to Mr Newey (who was represented by Bevan Ashford, solicitors, and counsel) are said by Mr Corbett to have totalled £17,744, plus interest down to 31 January 2006 of £3,194, although the costs have not yet been the subject of a detailed assessment let alone paid. It is these costs which are the subject of this head of claim. Mr Corbett submitted that the application was a reasonable one for him to make because, had he not made it, he would have had to sell the two Probus cottages in order to pay Mr Newey’s costs of the probate proceedings. The cottages had apparently been tenanted at Miss Tresawna’s death and had a low probate valuation, but they came into hand in about 1998 or 1999 and their sale in order to pay Mr Newey’s costs would have triggered a significant CGT liability.

I find that the liability in respect of these costs was not “incurred … as a result of the Will action” or as a result of “the costs order made in the Will action …”. Nor was it caused by Bond Pearce’s negligence. It was incurred as a result of Mr Corbett’s ill-advised decision to mount an unreasonable application – against counsel’s advice – for the setting aside of the original costs order made by the Court of Appeal in favour of Mr Newey in February 1999. It was an attempt to fight again a battle that had been fought and lost; it was foreseeable that it had no reasonable prospect of success, and Mr Corbett had been so advised; and it was dismissed with costs. The application should not have been made and the substance of the matter is that Mr Corbett was the cause of his misfortune in being ordered to pay the costs occasioned by it.

It is correct that the application achieved a beneficial by-product from the estate’s viewpoint, namely the stay of the enforcement of the Newey costs order. But that was not a head of relief that Mr Corbett had sought; and had he confined himself from the outset to seeking such relief it is probable, as he accepted, that Mr Newey would have agreed to it and that the costs now in question would not have been incurred. It is possible that in that event some small amount of costs might have been incurred by Mr Newey and/or SIF in agreeing to such a stay, and that the terms of any agreed stay might have required Mr Corbett to pay them. But this is not what happened, there is no evidence as to what such costs might have amounted to and I do not propose to guess. The point is that the costs now in question were incurred as a result of Mr Corbett’s own lack of judgment. It was no part of Bond Pearce’s duty to save the estate harmless from the incurring of such an irresponsible head of costs; costs of such a nature were not reasonably foreseeable as the consequence of their negligence; and they cannot fairly be regarded as having caused them. I hold that these costs are not a relevant liability.

These three heads of costs are said to total £57,550, plus interest. They are costs that Mr Corbett has been ordered to pay Bond Pearce in respect of (i) his failure in the litigation over the preliminary issues (£49,800) and (ii) his failed petition for leave to appeal to the House of Lords (£3,750); and (iii) under a Master’s order made on 18 August 2005 in relation to the present inquiry as to damages (£4,000). Mr Corbett claims to be entitled to recoup these liabilities out of the estate, but again says that, if he is to do that, the Probus cottages will have to be sold, which will cause a major CGT liability. He says it follows that Bond Pearce are answerable to the estate for these costs as damages, they having been caused by their negligence in relation to the September will.

The first difficulty is that none of these liabilities is a liability of the nature described in the opening lines of paragraph 2(a) of the July order: I regard as wholly improbable the thought that the Court of Appeal, when making that order, could or might have regarded costs liabilities imposed on the estate in the very action in which it made it as being liabilities of the nature there described. More generally, I was shown no authority on whether costs ordered to be paid by C to D in the course of a negligence claim by C against D can in any circumstances be recovered by C from D as part of the damages awarded to C against D in the same claim. Whilst “never say never” may be a counsel of prudence in approaching such a question, it is obvious that it will only be in an exceptional case that such costs might be so recovered. There is authority for the proposition that if C obtains an order for costs against D he cannot in the same claim recover under the guise of damages any part of his costs disallowed on a detailed assessment (Cockburn v. Edwards (1881) 18 Ch. D. 449, at 463; and Ross v. Caunters [1980] Ch. 297, at 324). That being so, it would be particularly odd if C could recover as damages in the same claim costs he is ordered to pay to D. The reason that Mr Corbett was ordered to pay these costs to Bond Pearce is because the making of adverse costs orders against him was regarded as the just disposal of the particular pieces of litigation in which such costs were incurred. In particular, I consider that the Court of Appeal would have been surprised by the notion that the costs it ordered Mr Corbett to pay Bond Pearce following the appeal against Eady J’s order could (in effect) then be brought into account by him in calculating the damages payable by Bond Pearce. It also cannot have been within the scope of the duty that Bond Pearce owed to Miss Tresawna to save her estate harmless from liabilities of this nature, namely liabilities imposed by the court on the estate by way of indemnification to Bond Pearce for their costs incurred in defending claims by the estate. If it were otherwise, it would mean that a claimant in a negligence action such as this could or might regard himself as having a licence to argue any number of fanciful points and then claim to recoup the costs ordered against him by adding them to the damages. That is wrong in principle. I hold that these claims are not relevant liabilities.

These heads of claim are in respect of bills rendered to Mr Corbett by Russell Jones & Walker, the solicitors who have acted for him in the negligence claim. Head 6 is for £14,259 and the narrative of the disclosed bill dated 31 March 2005 shows that it relates to their conduct on his behalf of the negligence claim, including disbursements for counsel’s fees. Head 7 is for £11,175. No disclosure has been given in relation to that figure but it is not disputed that it is another Russell Jones & Walker bill for work done for Mr Corbett in the negligence claim. On 11 January 2006 Mr Corbett disclosed yet another bill (dated 7 December 2005, the 17^th interim bill) from Russell Jones & Walker for a total of £17,101.56, although it is not listed in the Scott Schedule.

Mr Corbett told me that heads 6 and 7 represent Russell Jones & Walker’s still unpaid bills, he having personally paid their smaller bills since 2001; and I presume the same applies to the recent December 2005 bill. It seems to me that there can perhaps be said to some lack of logic in these two heads of claim: it is not apparent to me why it is confined to the undischarged bills. Why should it not also extend to those of Russell Jones & Walker’s bills that either the estate or Mr Corbett personally have paid? They must also have been liabilities of the estate which, now that they have been discharged, have resulted in a reduction in the estate’s assets. Having said that, my judgment is that the amount of these bills anyway cannot represent a head of liability potentially recoverable as an element of damages in this claim. I have of course yet to deal with the costs of the inquiry now before me and conceivably (although I do not know - and certainly do not wish to raise Mr Corbett’s hopes) all or part of these bills might be recoverable by him by way of any order for costs that I might make in his favour against Bond Pearce. To the extent that any such recovery is so ordered, it cannot also form a head of damages. To the extent that the amounts of these bills are not recoverable under any such costs order, the Cockburn and Ross cases show that they cannot be recouped under the guise of damages. Again, I cannot accept that these liabilities are liabilities of the nature referred to in paragraph 2(a); and I also cannot accept that it was any part of Bond Pearce’s duty to save Miss Tresawna’s estate harmless from having to bear costs in a negligence claim against them which the court has concluded the estate should pay. I hold that these estate liabilities are not relevant liabilities.

Structural Design Services

This item – assessed by Mr Corbett at £1,175 (he has had no bill) – relates to the obtaining of drawings from a firm of designers in relation to the possible development of the site of Tippett’s Cottage. Mr Corbett disclaims any suggestion that the work was caused by Bond Pearce’s negligence; and it is obvious it was not. It was work he decided to commission in his capacity as administrator of the estate which was unrelated to the negligence. His point is, however, that because the negligence caused a delay in the administration, and because the expense was incurred during that delayed administration, it is a liability to be laid at Bond Pearce’s door.

I hold that this item is not a relevant liability either. First, no bill has been produced and I am not prepared to accept Mr Corbett’s own estimate of the likely cost, although I do not question that his estimate is what he assesses to be a fair one. Second, I do not consider that this item can fairly be regarded as having been “incurred … as a result of the delay in the administration of the estate caused by the Defendants’ breach of contract and negligence…”. Whilst I do not go so far as to say that this must mean necessarily incurred, I regard this as likely to be close to the relevant boundary line. The substance of this particular matter is, I find, that it was a voluntary exercise undertaken by Mr Corbett. I cannot accept that voluntary expense of this sort was expense from which Bond Pearce can be regarded as having assumed a duty to save the estate harmless. The object of the exercise was to explore the potential for long-term benefit for Mrs Arthur and Mr Corbett as legatees of these cottages; and the probability is that the expense would have incurred by them personally had the administration been concluded earlier.

Income tax

The next head is a £500 alleged estate liability for income tax. The only supporting documentation is a letter of 8 July 2005 from the estate’s accountants, Whitaker Redfearn Pappin, and a Statement of Account dated 14 December 2005 from HM Revenue and Customs, both indicating a tax liability of £372.24. This was in respect of rent paid under a short-term letting, or lettings, that had been granted in respect of one or more of the estate properties since their long term tenancies had ended.

There is no dispute in principle about this, or at any rate the reduced £372.24 figure. Bond Pearce accept that the rent generated by the estate has been swallowed up in discharging estate liabilities which would not have been incurred but for their negligence. Their position, therefore, is that in carrying out the paragraph 2(b) exercise, the rent should not be brought into account as an asset of the estate available to meet its liabilities; and nor, as follows, need any separate consideration be given to this modest tax liability, which merely operated to reduce value of that asset. That approach is a fair, reasonable and practicable one, and I propose to adopt it.

Mr Corbett – share of rental income

The amount of this head of claim is said to be £3,500. The basis is that the two Probus cottages were owned as to seven-eighths by Miss Tresawna and as to one-eighth by Mr Corbett. Following Mr Tresawna’s death, the cottages generated rent. Mr Corbett appears to have overlooked that he was beneficially entitled to one-eighth of it until Mr Bennett pointed it out to him in about 1999 or 2000. Mr Corbett says this figure of £3,500 is owed to him by the estate, and represents his share of the rental income that has accrued since 2000.

I do not follow how this claimed liability has anything to do with Bond Pearce. As the estate administrator, it was open to Mr Corbett to collect the Probus rents and account to himself for one-eighth of them, being the share to which he was personally entitled. His evidence was, however, that he chose not to do so. It is unrealistic to regard this share of the rent as representing either an asset or a liability of the estate. It is more accurate to regard it as property of Mr Corbett which the estate was collecting on his behalf; and the fact that it has not been paid to him has nothing to do with Bond Pearce. He could, for example, have arranged with the tenants to pay one-eighth of their rent by way of a separate cheque. This is not a relevant liability.

Mr Corbett – expenses and loans

The items here are also dealt with under subsequent heads of claim, and I will deal with them there.

Mr Corbett – work done as administrator of the estate

This claim is for the round sum of £45,000 by way of remuneration to Mr Corbett for his work in administering the estate, the basis being that Bond Pearce’s negligence has increased the work he would otherwise have had to do.

The difficulty here is that the estate can have no liability to Mr Corbett in any sum for work done by him as an administrator. Clause 19 of the February will entitles a solicitor or “person engaged in business” to charge for his work in administering the estate. Mr Corbett disclaims any suggestion that he qualifies under Clause 19 to charge the estate for the work he has done and it was not suggested that he is helped by anything in sections 28 to 33 of the Trustee Act 2000. But he says this case is out of the ordinary. He has had to (i) undergo three appearances in person in the Court of Appeal; (ii) petition the House of Lords (as a protective step towards a possible journey to Strasbourg); (iii) deal with two taxations and three directions hearings; and (iv) defend the estate in two other pieces of litigation not involving Bond Pearce. He says all this is outside the ordinary run of an administrator’s work. He says it is work for which he is entitled to charge the estate as a litigant in person who has been labouring on its behalf. His figure of £45,000 is his assessment of a fair sum.

In my judgment that argument does not work. Whilst I accept that Mr Corbett has left no stone unturned in his efforts to recover compensation for the estate, or to defend its interests, the fact is that, as matters stand, he has no right to compensated for them. His litigant in person analogy does not help, because no relevant costs order has been made in his favour as such a litigant. I do not overlook that the court has an inherent jurisdiction to allow a trustee to recover remuneration where none was provided by the trust instrument (see In re Duke of Norfolk’s Settlement Trusts [1982] Ch 61; and In re Worthington, decd [1954] 1 WLR 526, as regards an administrator). Had Mr Corbett applied to the court for such remuneration, he might or might not have been held entitled to it. But he has not and so is not entitled to regard either his £45,000, or any sum, as a liability of the estate, let alone one that can passed on to Bond Pearce. This head of claim does not represent any liability, let alone a relevant one. During his submissions in reply, Mr Corbett asked me to authorise the payment of remuneration to him. I took the view, as I explained to him, that I had no jurisdiction to make any such order in these proceedings; and Mr Corbett did not press the matter.

Mr Bennett – costs incurred as executor named in the September will

Mr Bennett was a named executor in the September will. He was a party to the probate action, although played no separate role in it. In so far as he incurred costs in that action, they were ordered to be paid out of the estate and no point turns on that. But he also incurred costs in acting, or purporting to act, as executor before the action started. Moreover, clause 7(e) of the September will entitled any trustee “who is engaged in a profession” to charge for his work. Mr Bennett is a chartered accountant and so was entitled to charge. The September will failed but, had it been upheld, Mr Bennett would (I presume) have been an executor of it and entitled to recover his charges. He submitted an invoice dated 30 January 1997 for £8,166, including VAT. It was for work done as executor from 6 February 1991 (the date of Miss Tresawna’s death) to 26 January 1996 (the date of the Court of Appeal’s finding against the September will). Bond Pearce do not dispute the figure, but say that, because the September will failed, it cannot be a liability of the estate.

In my judgment, this amount does have to be brought into account in the damages calculation. Not, however, as a relevant liability, but as a gift, or pecuniary legacy, intended by Miss Tresawna under the September will but which has failed by reason of Bond Pearce’s negligence. Remuneration payable under a professional charging clause is characterised as the gift of a legacy by the testator: see the decisions of the Court of Appeal in In re Pooley (1888) 40 Ch.D. 1 and In re J. Thorley, Thorley v. Massam [1891] 2 Ch. 613; of Eve J in In re Brown, Wace v. Smith [1918] WN 188; and of the Privy Council in Commissioner of Stamp Duties of New South Wales v. Pearse and Others [1954] AC 91, at 113. The theory underlying clause 2(b) of the April order is that all such legacies must be provided for, and so I can see no reason why this legacy should not be included too (although it well illustrates the eccentricity of clause 2(b): whatever happens, Mr Bennett will not be entitled to recover a penny towards his claimed costs).

I hold, therefore, that this item must be brought into account in calculating the damages payable under clause 2(b) of the April order. I was shown no authority as to whether such a gift carries interest at the legacy rate, but Mr Bennett has anyway not claimed interest. I hold that the £8,166 claim (excluding interest) must be included as an extra pecuniary legacy.

Mr Corbett – out of pocket expenses

The claim here is for £5,234. It is said to be in respect of out-of-pocket expenses incurred by Mr Corbett in connection with estate litigation. It is made up mainly of 16 trips between Cornwall and London, said to represent an estimated total of 8,960 miles at an estimated cost of 40p a mile, plus ten nights in hotels at an estimated average of £125 per night. This is said to total £4,834, all of which relates either to the conduct of the present claim against Bond Pearce or to the application to the Court of Appeal to set aside the Newey costs order in the probate action. In addition, Mr Corbett claims a further £400 for an estimated 1,000 miles of travel in Cornwall in connection with various other estate activities, including other litigation not concerning Bond Pearce. No documentation has been adduced in support of the figures.

In principle, I consider that Mr Corbett is entitled to be indemnified by the estate in respect of his proper out of pocket expenses incurred in performing estate business. In the absence of any supporting documentation, I am not, however, prepared to accept that his figure of £5,234 is a proper figure for which he is entitled to be so reimbursed. Quite apart from this, the relevant question is anyway whether any such liability on the part of the estate can fairly be said to have been incurred as a result of the matters referred to in paragraph 2(a). I propose to leave out of account the £400 claim, which is not just undocumented but also unparticularised. As for the remaining claim, all of it (apart only from two nights in a hotel in relation to the Newey costs saga) represents disbursements incurred by Mr Corbett as a litigant in person in the negligence claim against Bond Pearce. In my judgment, they are therefore not relevant liabilities at all. I consider that the correct approach to those disbursements is that Mr Corbett is only entitled to recover them from Bond Pearce (if at all) as disbursements recoverable under any costs order he may obtain against Bond Pearce (see CPR Part 48.6). If he is not held entitled so to recover them, that is because justice as between himself and Bond Pearce requires that he must be left to bear them; and it would in my view be inconsistent with such a concept that Bond Pearce should then be expected to be answerable for the same disbursements under the guise of damages.

As for the two Newey items, for reasons given in relation to the Newey saga, that adventure was misconceived; and Bond Pearce should not be expected to pay for such misconception. I hold that this claim is not a relevant liability.

Russell Jones & Walker’s fees prior to grant of letters of administration

This item totals £10,139, which was paid by Mr Corbett in two tranches of £2,500 and £7,639. The bills appear to show that these fees were in respect of Russell Jones & Walker’s advice to Mr Corbett in connection with the issue and service of the writ in the present claim, advice following his successful appeal against Mr Hamilton QC’s decision in the probate action, and advice in relation to the prosecution of the claim.

These amounts are not relevant liabilities within the meaning of paragraph 2(a) of the April order. If they are recoverable at all from Bond Pearce, they can only be recoverable as costs under any order that may be made in these proceedings. If they are not so recoverable, they cannot be regarded as a head of loss occasioned to the estate which can be separately recoverable from Bond Pearce under the guise of a head of damages.

Costs re Corbett v. Cope and Keogh

Following Miss Tresawna’s death a question arose as to whether a Tippett’s Cottage neighbour had removed one of the boundary hedges. In 1998 Mr Corbett took proceedings against Messrs Cope and Keogh (successors in title of the alleged perpetrator of the offending deed) in Truro County Court, and instructed solicitors (Messrs Nalders) and counsel. The defendants instructed Stephens & Scown, solicitors. The claim was tried in 2001 and dismissed. Mr Corbett’s evidence was that £4,700 of estate money was used to pay the costs of Nalders and counsel; and Mr Corbett said he personally paid Nalders’ last bill of £1,220. The judge (District Judge Thomas) also ordered Mr Corbett to pay the defendant £6,000 by way of summarily assessed costs and Mr Corbett paid that sum personally. Mr Corbett was dissatisfied with Judge Thomas’s decision and appealed against it and he said he personally also paid the appeal fee and also (he believes) £100 for the cost of a transcript of the proceedings before Judge Thomas. The outcome of the appeal was that HH Judge Overend set Judge Thomas’s decision aside and ordered a re-trial. The dispute was then compromised by a consent order dated 22 October 2001, under which £5,000 was to be (and was) paid to Mr Corbett by the defendants. The net result is that Mr Corbett claims that he and the estate were ultimately about £7,000 out of pocket: he puts his claim under this head at £7,320, although on the figures as I understand them it does not exceed £7,020.

I have had my doubts about the justification of this head of claim, but I have come to the conclusion that it does represent a relevant liability. The point was made that as this was a claim in trespass against a property in the possession of an estate tenant, only the tenant had a right to sue, and not the estate. Whether that point is good or bad, I understand it was not taken against Mr Corbett in the county court and the ultimate outcome of the exercise was a compromise solution, involving the restoration of a wall, which I understand to have been in the estate’s interest. The trespass was apparently an opportunistic one, which could, and probably would, have happened even if the administration had been completed promptly. But the consequence of the delayed administration was that it happened during the currency of the delayed administration; and it appears to me to have been entirely reasonable for the estate to take the view that it needed to defend the challenge to its proprietary interests: it could not safely defer doing so until the administration was complete. It can even be said to have been necessary for the estate to have taken the steps it did.

In these circumstances, I regard the costs and liabilities incurred by the estate in relation to this matter as having been incurred “as a result of the … delay in the administration of the estate caused by the Defendants’ breach of contract and negligence …”. It was reasonably foreseeable that during the currency of a delayed administration the estate would or might have to incur liabilities in protecting itself and its interests, and so I hold that this head of claim does constitute a relevant liability. I hold that its amount is £7,020.

Russell Jones & Walkers’ fees post 2001

The sum here claimed is £4,641 in respect of fees paid to Russell Jones & Walker in relation to advice on Mr Corbett’s claim against Bond Pearce.

I hold that this is not a relevant liability for the same reasons as I have given in relation to head 15.

Accountancy fees

This claim is for £465 (including VAT) paid by Mr Corbett to Whitaker Redfearn Pappin, chartered accountants, for accountancy work in relation to the administration of the estate, including the estate’s tax return for the year ended 5 April 2005. The work done also included, according to the bill’s narrative, “Extracting from our files copies of documentation concerning the construction of the Estate account in regard to your ongoing Court actions and corresponding with you in this connection.” That was a reference (in part) to the present claim against Bond Pearce.

To the extent that part of the bill is referable to Mr Corbett’s costs of the present claim, I consider it can be recoverable (if at all) only as a disbursement under any order for costs that Mr Corbett may obtain against Bond Pearce, but cannot be claimed as damages (see my reasons under item 14 above).

As for the remainder of the bill (i.e. the part not so referable), I take the view that in principle this was a necessary and foreseeable estate expense incurred in consequence of the delay in administration caused by Bond Pearce’s negligence; and I accept that it is a relevant liability. Mr Hochberg suggested that 50% should be regarded as a fair percentage of this bill that ought to be so brought into account. Mr Corbett said that 80% would be a fairer percentage. I have no material with which to make a precise apportionment. My instinct is that Mr Corbett’s assessment is closer, but I prefer the view that 70% is the right one. I hold that 70%, or £325 (ignoring pence), is a relevant liability.

Miss Demetriou’s fees

This claim is for £1,175 paid to Miss Marie-Eleni Demetriou of counsel for advice in relation to the possibility of a human rights claim by the estate against the Government of the United Kingdom. Apart from a fee note relating to work done by Miss Demetriou on 2 and 3 August 2005, no disclosure relating to this proposed claim, or advice, has been given. It was Mr Corbett’s decision to seek such advice and as the proposed claim was against the Government the presumption is that it was intended to reflect a complaint that the Government had failed to provide proper protection of Miss Tresawna’s and/or the estate’s rights under domestic law. Mr Corbett said there were three potential elements to the claim, but I understood the primary one to be a complaint that the United Kingdom’s domestic law had failed him and others interested under the February will by not allowing him and them to enjoy their entitlements under it without the burden of years of litigation.

I cannot see what the obtaining of this advice has got to do with Bond Pearce. They made an unfortunate mistake in September 1989 for which they ought to pay proper compensation, but they cannot be expected also to pay for inquiries as to whether there is any argument that our domestic law is relevantly deficient, a question for which they are not remotely responsible. I am not satisfied that the incurring of expense in seeking this advice was sensible, reasonable, necessary or justified and I do not accept that it can be regarded as caused or foreseeable by Bond Pearce. Nor do I regard such expense as the type of expense against which they had a duty to save the estate harmless. I hold that this is not a relevant liability.

Bevan Ashford costs

The sum claimed here is £439.88, part of a judgment for £1,239.88 obtained by Bevan Ashford, solicitors, against Mr Corbett in Truro County Court on 16 August 2004. That larger figure, rounded up to £1,240, features as head 29 of the Scott Schedule. This larger sum (including the present sum) is admitted by Bond Pearce as being a relevant liability.

Mr Corbett – work done as administrator

This is a repeat of the £45,000 claim dealt with and rejected under item 12..

Loss of rental income

The estate has used its seven-eighths share of the rental income from the Probus cottages (totalling £47,299 from 1991/92 to 2004/05) to defray estate administration expenses (totalling £14,322). The claim is to treat such expenses as an additional liability caused by Bond Pearce. Their answer is (as already mentioned) that, in their computation of the assets of the estate available to satisfy estate liabilities, they have excluded the estate’s rental income; and so there is no need to bring into account the expenses to which the rent has been applied. I regard that as a fair approach to apply in relation to the computation of any damages and I propose to adopt it.

Mr Corbett – legal costs of the probate action and appeal

The claim here is in respect of Mr Corbett’s costs of the probate action and appeal. The figure asserted by Mr Corbett is £62,000. The claim is not disputed in principle – these are part of the first head of costs referred to in the July order – but the amount is in dispute. The difference arises because the costs were not taxed. Mr Corbett’s solicitors produced a bill for £52,215.57. Mr Corbett paid this some time later plus interest of almost £10,000. What is said is that he had a duty to mitigate the estate’s loss by having the costs taxed. Bond Pearce’s counter proposal is that only 90% of the claimed sum, or £55,800 (inclusive of the claimed interest), should be allowed.

Mr Corbett’s primary answer was that, whilst he was not an executor or administrator of the estate at the time these costs were incurred, he later obtained a grant of letters of administration and he showed me some textbook support for the proposition that this entitled him to take his costs out of the estate without having them taxed. He may be right about that, but I do not propose to decide that point because it does not seem to be central to the relevant issue. The point levelled against him is that he had a duty to mitigate the estate’s loss in its claim against Bond Pearce, which required him to take at least reasonable steps to moderate, if he could, his solicitors’ bill. He could have argued over it, or he could have required the costs to be taxed, and he could have been less generous in the amount of interest he paid.

Mr Corbett’s response to that was to ask why he should have taken any of these steps. The probate litigation had lasted a considerable time and the outcome was that his solicitors achieved the result he wanted: they did an excellent job for him. He did not regard any element of their bill as unreasonable and could see no merit in incurring the expense of a taxation of a bill with which he had no disagreement. Nor did he regard the interest paid as excessive.

I regard that as a reasonable stance. I decline to hold that Mr Corbett’s omission to argue over the bills or interest amounted to a failure to take reasonable steps to mitigate the estate’s loss. Bond Pearce’s £55,800 counter-proposal does not suggest that they regard the bills or interest charges to have been fundamentally unreasonable. I hold the full £62,000 to be a relevant liability.

Mrs Arthur, James and Jonathan – legal costs

This claim is for £41,800 for Mrs Arthur’s, James’s and Jonathan’s costs of the probate action and appeal. Their solicitors’ bill was for £40,113. The costs were not taxed but were eventually settled at £41,800, inclusive of interest, which reflected some reduction in the bill. Bond Pearce regard this as reflecting a fair figure for costs and accept that this sum is a relevant liability.

Mr Bennett – costs of probate action

This claim is in respect of £2,065 in respect of Mr Bennett’s legal costs of the probate action plus interest. During the hearing, Bond Pearce conceded the full £2,065. I hold this to be a relevant liability.

Mr Newey – costs of probate action

I have dealt with this under head 1 above.

Interest on IHT

This is a claim to include as a loss to the estate caused by Bond Pearce’s negligence a sum of £39,455, an estate liability incurred as a result in the delay in its administration resulting in a late payment of IHT. Bond Pearce admit it is a proper head of claim. They have dealt with it in the estate capital account by reducing the estate assets available to meet creditors and specific legacies. I hold that this is a relevant loss.

Overpaid IHT

Myrtle Cottage, Grampound had a probate value of £70,000. Because of the delay in the estate’s administration it was sold several years later than it might otherwise have been. It was sold for only £53,500, realising net proceeds of £52,648. Had it been sold at that price within (I understand) three years of Miss Tresawna’s death, its actual value represented by the sale price could have been substituted for its probate value; but no such substitution could be made in respect of the value realised on the later sale that actually occurred. The consequence is that the estate paid IHT on a cottage valued at £70,000, whereas Mr Corbett claims that, but for the delay in the administration, the sale could and would have been made within three years and would have enabled a saving of £6,940 of IHT.

That argument appears to assume a number of factors in the estate’s favour, which may or may not be justified, but I need not examine them, because this head of loss is not disputed in principle. The response to it is that, in computing it, Mr Corbett has however to take the rough with the smooth. The smooth, from his viewpoint, is the IHT loss. The rough is the fact that the sale at £53,500 resulted in a loss to the estate for CGT purposes (taking the £70,000 probate value as the base value) which was set off against the gains made on the sales of the estate securities. The CGT saving did not cancel out the IHT loss because the CGT rate was 25% rather than the 40%. IHT rate. Mr Hochberg suggested that a fair measure of the actual loss taking account of the rough was £2,602.80, with which I did not understand Mr Corbett to disagree. I hold that this sum (which I round up to £2,603) is a relevant loss.

Bevan Ashford – administration costs

This is an item relating to estate administration costs of £1,240. Bond Pearce admit it is a proper liability to bring into account in the damages computation. (I referred to this earlier under head 20). I hold this is a relevant liability.

Mr Bennett – costs as named executor

This item has been dealt with at item 13 above.

Utility companies: re Myrtle Cottage, Grampound

Mr Corbett claimed £2,724 in respect of this item, which relates to utility bills over a period following Miss Tresawna’s death, which Mr Newey apparently allowed to pile up. Bond Pearce admit this item, and have corrected the claim to £2,728. I hold that the latter figure is a relevant liability.

Costs re Corbett v. Cope and Keogh

I have dealt with this at item 16 above.

These items total £172 and are admitted to be a relevant liability.

Reynolds Porter Chamberlain

This item related to the payment, and later repayment, of the £24,500 costs that Eady J ordered Bond Pearce to pay Mr Corbett. It is agreed that this item should be left out of account.

Boundary dispute – Tippett’s Cottage

I have dealt with this under item 16 above. I understood it to be agreed that the particular item referred to under this head (£228) should be left out of account.

Court costs

This is an item of court costs (£292) relating to the Bevan Ashford claim against Mr Corbett for the recovery of their costs incurred in administering the estate. I dealt with this under items 20 and 29. Mr Corbett thought that he incurred this particular item of expense in court fees in Exeter, and I understood from his oral evidence that it was incurred in paying court fees in relation to setting aside a default judgment that Bevan Ashford had entered, following which he engaged in a beneficial settlement of their claim. The claim itself is one I have accepted and I accept also that this item of expense ought to be regarded as an estate expense properly incurred in mitigating its liabilities. I hold that this sum is a relevant liability.

Printing and miscellaneous costs

The claim here is for £567. This figure is in the 2005 estate accounts but is unexplained. Mr Corbett said he used estate money to do photocopying in relation to this action. To the extent that he did, and he recovers any costs against Bond Pearce, the copying costs may be recoverable as a disbursement. Otherwise, for reasons given, I do not regard such costs as recoverable under the guise of damages. I am not satisfied that any other element of this head of claim is a relevant liability.

That concludes the list of items in the Scott Schedule. I turn to the computation of the recoverable damages. I have been considerably helped in this by the production of spreadsheet reflecting the estate’s accounts over the period from Miss Tresawna’s death down to the year ending 5 April 2005. The spreadsheet includes Bond Pearce’s own estimate of the estate’s recoverable loss as at December 2005. Mr Corbett did not question the accounts (save in a minor respect relating to the inclusion of a £47 asset in the nature of a pension claim, which he said had never been claimed). That was an adjustment against his interest, which Mr Hochberg said Bond Pearce would not quibble over.

The basis on which Bond Pearce calculate the damages is as follows. They first identify the available assets in the estate. The starting figure is £304,968, which represents the probate value of the net assets of the estate as at Miss Tresawna’s death on 6 February 1991 but excluding (for reasons given earlier) the probate values of the land at Truck and the Probus cottages (which are together £47,907). They next deduct from that the figure of £163,955 representing the overall negative movements on the estate’s capital account until April 2005 (the last relevant movement being in the year ended 5 April 2000). These include the loss of £17,352 on the sale of Myrtle Cottage, Grampound, a net surplus on securities of £36,983, CGT of £2,696, and IHT and interest (including on the Truck land and the Probus cottages) of £180,890. This reduces the available estate assets to £141,013.

To that figure there fall to be added the net dividends and interest received by the estate over the period to 5 April 2005 on its income account, a figure totalling £82,492. Over the same period, the estate also received net rent of £37,002, but for reasons I have explained the rents have been excluded as contributing to the available assets. Leaving out of account (for consequential reasons) the £7,701 income tax paid in respect of the estate’s rental income, the £82,492 dividend/interest income then falls to be reduced by general administration expenses of £9,889 incurred over the period to 5 April 2005. That produces a figure of £72,603, which has to be added to the figure of £141,013 referred to in my previous paragraph, producing a figure for net available assets in the estate as at December 2005 of £213,616.

The next task is to total up (a) the losses or liabilities of the estate which have to be taken into account under paragraph 2(a) of the April order, and (b) the pecuniary legacies which have to be taken into account under paragraph 2(b). The measure of recoverable damages is the amount by which (as it will) the total of (a) and (b) exceeds the available assets of £213,616.

As regards losses and liabilities, the spreadsheet works from Mr Corbett’s various Schedules and lists those items which Bond Pearce admit and, if so, to what extent. The same items feature in the Scott Schedule, and I have made my findings on them, which in some respects depart from what Bond Pearce had earlier admitted or disputed. I propose simply to list the losses and liabilities that I have found to be established, although in respect of certain of them the figures will need to be adjusted upwards to take account of the accruing of interest down to the date of judgment. I propose to leave it to the parties to agree, if they can, that calculation.

These are as follows, my numbered references being to the Scott Schedule: (1) Mr Newey’s costs of £52,614, plus interest to date of at least £42,091 (the latter figure needs updating); (16) Cope & Keogh costs, £7,020; (18) accountancy fees, £325; (20), (29) and (37) the Bevan Ashford and related costs, totalling £1,532; (23) Mr Corbett’s costs of the probate action, £62,000; (24) James and Jonathan’s costs of the probate action, £41,800; (25) Mr Bennett’s costs of the probate action, £2,065; (28) IHT loss on Myrtle Cottage, £2,603; (31) utility bills on Myrtle Cottage, £2,728; and (33) and (34) miscellaneous fees, £172. I have not there listed item (27), being £39,455 interest on IHT, because that has been taken account of in reducing the available assets by reference to the movements on the estate’s capital account. The total of all the other items (leaving out of account the updating for interest) is £214,950.

I have not here included Mr Bennett’s costs of £8,166 (item (13)). That is because, for reasons earlier explained, I consider it is more accurately listed as one of the legacies that has to be provided for under the September will.

The spreadsheet includes £1,250 worth of legacies under the February will (the total of the pecuniary legacies given by it) and £750 worth of legacies given under the September will (the total under that will also being £1,250). Accordingly, Bond Pearce are there apparently making a concession in Mr Corbett’s favour by bringing into account £750 more than might be thought necessary, although anything can happen in the wonderland of the July order. Again, Bond Pearce recognise that as a concession, and whilst its explanation is not obvious to me I do not regard it as part of my function to question it.

The spreadsheet includes interest on the legacies down to December 2005, and the legacies and interest total £3,666, although that figure will have to be adjusted to the date of judgment. To the resultant figure there must then be added the £8,166 (but no interest) in respect of Mr Bennett’s charges. Subject to the interest adjustment, the total legacy liability will be (at least) £11,832.

The combined total of (a) the losses and liabilities and (b) the legacies and (where applicable) interest is therefore at least (a) £214,950 plus (b) £11,832, which equals £226,782. The difference between that and the available assets of £213,616 is £13,166. That difference is the minimum amount for which Mr Corbett is entitled to judgment. I will leave it to the parties to agree, if they can, the final figure. In default, I will determine it.