Jarrom & Anor v Sellars

MR CHRISTOPHER NUGEE QC: In this probate action I have already made an order by consent providing for the claim to be discontinued, for a grant of probate in common form of the will of the late Alison Jarrom dated 24^th December 2004 to be granted to the claimants, Mr Robert Jarrom and Mr Mark Shepherd (the executors named in that will), if entitled thereto, and that, on the application for the grant by the claimants, a caveat entered by the defendant, Mrs Sandra Sellars, on 15^th February 2005 shall, if still subsisting, be removed and cease to have effect. It now falls to me to deal with the costs of the action.

The basic principles are well established and not in doubt. In probate actions, as in other actions, costs are in the discretion of the court, but the general rule, now set out in CPR 44.3(2), is that the unsuccessful party will be ordered to pay the costs of the successful party. The Rule however provides that the court may make a different order.

In the case of probate actions, the general rule, as I have said, is no different from ordinary actions; costs usually follow the event, but to this there are exceptions. I have been shown a recent decision of Mr George Bompas QC (sitting as a Deputy High Court Judge) in Wylde v Culver [2006] EWHC 1313 (Ch), [2006] 1WLR 2674, in which (citing from a work called “Parry & Clark, The Law of Succession”) he summarises the established exceptions as follows:

“The special circumstances justifying a different order may be classified under two heads, i.e. (i) fault of the testator or the residuary beneficiary-costs out of the estate, (ii) case for inquiry-no order as to costs.”

It is not suggested in this case that the litigation is the fault of the testator or residuary beneficiary or that Mrs Sellars, the defendant, should have her costs out of the estate, but it is suggested by Mr Dumbill on her behalf that this is a case where there are special circumstances justifying no order as to costs. Mr Hilton, for the claimant executors, submits that there is no reason to depart from the general rule and that she, as the unsuccessful party, should pay for the executors’ costs of this action.

The defendant is the daughter of the deceased. Under the deceased’s previous will dated 1^st February 1990 she and her husband were appointed executors and trustees and the entirety of the residuary estate was left to her. She says in her statement that her mother frequently told her that the property would be left to her and indeed had lodged the title deeds to the property with her, the property being a bungalow known as Crowthorne, which forms by far the bulk of the estate.

The 2004 will, which was made, as I have said, on 24^th December 2004, by contrast appointed her brother, Mr Jarrom and Mr Shepherd, a solicitor, as executors, and left the estate to her four grandchildren in equal shares, they being three children of Robert Jarrom and one child, Mark Sellars, of the defendant. The property was specifically provided for in these terms: she gave the property known as Crowthorne to her trustees upon trust to permit her grandson Mark Sellars, who was then living at the property, to occupy the property for a period of six months without payment for such occupation. Subject to that, it would fall into residue and would no doubt in due course be sold.

Mrs Sellars explained in her statement that she was very surprised, shocked and disappointed by the terms of the 2004 will, not least because she says her brother had persuaded her to hand over the deeds to the property on the basis that she would inherit half of the estate. She was suspicious that such a radical change in her mother’s will at such a late date, shortly before her death on 2^nd February 2005, could only mean that her mother either lacked testamentary capacity or had no knowledge of its contents or was placed under duress or undue influence by her brother or members of his family to sign the will. Not only, as I have said, had she been previously left the entirety of the estate, she says that she had been promised the house and that she and her husband had planned to make it the centre of a farming operation and, in reliance on that, had bought various parcels of land near the bungalow. In addition, she said that her brother had benefited from inter vivos gifts made by her mother and she was therefore very surprised to see the terms of the 2004 will and her suspicions were aroused.

In those circumstances, a caveat was lodged on her behalf on 11^th February 2005. It was warned by the executors on 18^th May 2005 and she entered an appearance on 24^th May 2005 on the grounds of lack of testamentary capacity, want of knowledge and approval and/or undue influence or duress.

Between then and now there has been substantial correspondence between the parties’ solicitors. I think it falls into the following broad periods.

Firstly, there was a period in which the defendant’s solicitors were seeking to obtain further information from the executors’ solicitors as to the circumstances of the execution of the 2004 will. In particular, they wrote on 15^th June 2005 asking for “disclosure on a voluntary basis of the contents of the 2004 file and the 1990 will file, the medical records and a statement from the solicitors who took instructions for and prepared the 2004 will”. At that stage the position that Simmons Grant (who were acting for the defendant) expressed was that the defendant might wish to issue proceedings for orders of the court pronouncing against the validity of the will:

“Whether a probate action is to be commenced will partly depend upon the result of those enquiries.”

That was followed up on 18^th July 2005 by what was said to be a formal Larke v Nugus request, that being a reference to a decision of the Court of Appeal in Larke v Nugus, reported in [2000] WTLR 1033, although I believe dating from some years earlier, in which it was said by Brandon LJ that:

“…when there was litigation about a will, every effort should be made by the executors to avoid costly litigation if that can be avoided and, when there are circumstances of suspicion attending the execution and making a will, one of the measures which can be taken is to give full and frank information to those who might have an interest in attacking the will, as to how the will came to be made.”

That was responded to by the solicitors acting for the claimants on 19^th August 2005 by enclosing statements of Mr Shepherd, the solicitor named as an executor, and Mr Pigeon, another solicitor who had been engaged in taking instructions for and seeing to the execution of the will, and after consideration by the defendants that resulted in the letter of 7^th October 2005 which I will have to revert to.

That forms, so far as I can see, the first period of the correspondence in which the defendant’s solicitors were seeking to obtain information and then consider information provided.

The next period falls between 7^th October and the issue of proceedings on 17^th February 2006. I will have to look at this period in a bit more detail, but broadly in that period the position of the parties was that the defendant had said that she was willing to withdraw the caveat on certain terms; the claimants had said that those terms were unacceptable and suggested other terms. No agreement was reached and that led to the issue of proceedings on 7^th February.

The next period is from then until 18^th May. During this period, after a hiccup over the procedural defects (which I need not detail), the claimants got their proceedings properly on foot by 11^th April, and on 18^th May 2006 that led to a letter from the defendant’s solicitors indicating that “the defendant no longer had any objection in principle to the grant of probate being obtained by your clients”.

From then the final phase, from 18^th May to today, the remaining issue between the parties has been a question of who should bear the executors’ costs of the probate action.

In relation to the first period, I can deal with this very briefly because, as I understand it, the executors are not seeking to recover any costs for this period in this application. I was told that the costs which they are seeking to recover only began to run in January 2006. In those circumstances it is probably not necessary for me to say very much about this period, but I will say very briefly that it does seem to me that, on the limited information available to the defendant at the stage at which the defendant’s solicitors were pressing for a Larke v Nugus statement and then subsequently considering the statements that have been recovered, there was a reasonable case for enquiry. If it had been necessary, I would have regarded the actions of the defendant in that period as reasonable. The defendant’s solicitors made the position clear in the letter I have already referred to, that they were not at that stage saying they would be issuing a probate action, but they wanted to know what the position was. No doubt it is the case that, with a will dating from 1990, it was to be expected that the deceased might wish to reconsider her will, but the very radical change in the nature of the disposition made of her estate was, in my judgment, sufficient to give rise to at least grounds for further investigation.

The real question however, it seems to me, is the reasonableness of the position adopted by the parties between then, 7^th October 2005, by which time the defendant’s solicitors had had an opportunity of considering the statements, and the issue of proceedings on 17^th February 2006. The initial position of the defendant’s solicitors, as set out in their letter of 7^th October, was as follows: they stated that it did seem to them “and we are prepared to advise our clients that the grounds of testamentary capacity and undue influence are not as strong as originally envisaged”. They went on to say that, in an effort to foreshorten what could potentially be a protracted dispute, they were prepared to withdraw the caveat to enable the claimants to obtain the grant of probate.

“This would however be strictly on the basis that we, before writing to the Manchester DPR, receive your formal written undertaking not to distribute the net estate and more particularly not to commence or undertake any transaction involving the property known as Crowthorne”, and the address is given.

They then requested that the claimants enter discussions with a view to settling the claim. They said the case was supported by a number of independent adult witnesses, and then continued:

“If you are not prepared to enter into some meaningful discussions with a view to settling matters prior to issue of proceedings, then we will proceed to issue our client’s claim on the basis of estoppel and seek an order in costs accordingly.”

That was a reference back to an estoppel claim which had been previously flagged in a letter of 15^th June, the basis of the claim being, as said by the defendant, that the deceased gave repeated assurances to her over a period of some 15 years that the property of Crowthorne would be left to them in her will and that she and her husband over many years invested in developing the adjoining farm premises in reliance on the receipt of the premises. Reverting to the letter of 7^th October:

“Our clients reserve the right to make additional claims based on lack of capacity, want of knowledge and approval and undue influence, if it is considered at the date of issue that such claims could in fact be substantiated.”

They pointed out that they still had not had access to medical records.

I accept the submission that the position being put forward by Simmons Grant at that date was that they were willing on terms to withdraw the caveat but wished to reserve the position, the thinking being that if further evidence came to light which would enable them to challenge the grant of probate, if the claimants proceeded to take a grant in common form it would then be up to the defendant, if so advised, to initiate a claim for revocation of that grant.

There was in the ensuing correspondence some negotiation over the terms of an undertaking. The suggestion made in that letter was not acceptable to the executors. The executors on 25^th October 2005 indicated that they were prepared to undertake to give seven days’ notice of the distribution of the net estate and seven days’ notice of sale of the property, and that was altered on 12^th January 2006 to “our clients being prepared to let the notice be 28 days for the next six months to say 30^th June 2006”, their solicitors saying they were not in a position to fetter their discretion to any other extent.

In the same run of correspondence there was discussion of a possible meeting. That is something that had been previously suggested and indeed it had been suggested as long ago as July 2005 when in a letter of 14^th July the defendant’s solicitors had expressed the hope that it might be possible to deal with matters by way of ADR, mediation or, alternatively, to hold a round table conference, and had led at one stage to a meeting being arranged for 16^th August 2005. That meeting was postponed in circumstances that have not been explained in the evidence before me. And in their letter of 7^th October the defendant’s solicitors had again requested that the claimants’ solicitors formally consider entering discussions with a view to settling the claim.

The claimants’ solicitors asked for copies of witness statements in support of the estoppel claim. In their letter of 12^th January the claimants’ solicitors asked, so far as the meeting was concerned, for proposals and an agenda to be put forward. An agenda was again requested and proposals on 18^th January. On 24^th January the defendant’s solicitors said:

“You are by now, of course, aware of the issues involved and we see no need for specific proposals or agenda to be prepared.”

On 30^th January the claimants’ solicitors said:

“We have now asked you several times for your specific proposals and agenda… How can our clients consider such a meeting when these are not in place?”

On 8^th February the defendant’s solicitors sent a proposed agenda. That agenda contained a list of the defendant’s grounds, which included mental incapacity and undue influence as well as estoppel, and also included the grant of probate, the caveat and the respective parties’ solicitors’ proposals for progressing matters.

It is in those circumstances that this action was brought on 17^th February. There were in the ensuing correspondence a number of references to the possibility of a meeting in which the defendant’s solicitors frequently requested a meeting, and the claimants’ position was that they had never refused a meeting but that a cost effective way forward needed to be established and it would not be sensible to invite counsel, and matters of delay.

As I have said, by 18^th May, which came after the letter of 11^th April, at which stage this action was put on a proper footing, the defendant’s solicitors said:

“For the avoidance of any remaining doubt our client no longer has any objection in principle to the grant of probate being obtained by your clients…with a view to avoiding any further waste of costs our client is now prepared to vacate the caveat and to cooperate in effecting a compromise or discontinuance of the probate action (thereby enabling a grant in common form to be obtained by your clients) subject to the costs of the probate action being borne by your clients.”

Indeed, on 24^th May that was amplified by two letters: one to the claimants’ solicitors suggesting a compromise with no order as to costs, each side to bear their own costs; and another one indicating that they had written to the court applying to withdraw the caveat. Unfortunately they were advised by the Probate Registry that, as a warning had been entered to the caveat, it could only by withdrawn by a consent order, and the remainder of the time has been taken up with arranging for this consent application and argument as to costs to be brought on.

The essential submission of Mr Hilton for the claimants is that once the statements had been provided in August 2005 the defendant no longer had reasonable grounds for opposing the grant of probate; that what the defendant thereafter did was try to link an impermissible opposition to the grant of probate with the estoppel claim which, whatever else it did, did not justify continued opposition to the grant of probate; and that, in those circumstances, the defendant should have withdrawn the caveat after consideration of the statements provided in August and, had the defendant done so in October 2005, these proceedings, which are solely concerned with removing the caveat so as to enable the executors to obtain a grant, would have been avoided.

The essential submission of Mr Dumbill for the defendant is that the executors acted precipitously in bringing the proceedings in February 2006, that they did so because of what they regarded as unreasonable conditions being sought to be imposed on the removal of the caveat, namely the preservation of the estate to meet the estoppel claim, but that that was unreasonable. In the case of a small estate every effort should have been made to avoid litigation and, in particular, the claimants failed to take up the defendant’s repeated suggestions for a meeting which might have resolved matters.

He referred me to the well-known decision in Halsey v Milton Keynes General NHS Trust, a decision of the Court of Appeal reported in [2004] 1 WLR at 3002, which considers the question of whether a failure by a party to attend a mediation is something that can and should be taken account of in relation to costs.

I acknowledge the force of the submission made by Mr Hilton for the claimants. It does seem to me that the statements that were provided meant that there was little material on which the defendant could hope to put together a viable case of lack of testamentary capacity or indeed undue influence on the evidence available to her at the time. I am conscious that Mr Dumbill says that further enquiries were proceeding and that things may have turned up, but I take the position to be that stated in their own letter of 7^th October 2005 that, in effect, although reserving their position in case any further matters did come to light enabling such grounds to be advanced in opposition to the 2004 will, the position at that date was that the defendant did not have a substantial case to make out opposition to the will. Nevertheless, it does seem to me that in the circumstances of this case it is unfortunate that the suggestions of a meeting which were repeatedly made in the correspondence were not taken up. It is undoubtedly the case that costs would have been incurred in attending a meeting, but, as everybody who has anything to do with litigation knows, the costs of litigation very rapidly exceed the costs of one, two or even several meetings to resolve matters. It seems to me that the reality, by 7^th October, was that, although the defendant had reserved her position, it was and could be seen to be unlikely that there was ever going to be, as matters then stood, a contested probate action. The real question, and this formed part of the agenda which was sent through by the defendant, was how to take matters forward. As I said, the agenda included the grant of probate, the caveat and the respective parties’ solicitors’ proposals for progressing matters. By the time that agenda was sent through, the position, it seems to me, was that both parties had really accepted that the caveat should go, that the claimants should have a grant in common form, and that in due course the defendant, if so advised, would bring proceedings for estoppel. As I have said, the defendant had formally reserved her position to bring a claim, which at that stage would be a claim for revocation of the grant in common form, if further evidence in relation to the invalidity of the 2004 will had come to light. The difference between the parties was not really as to whether probate should be granted to the claimants or not. The difference between the parties was what steps should be taken and could reasonably be required, on the one hand for the preservation of the status quo to protect the defendant’s claim (which had been mooted although, I accept, not fully fleshed out) that she was entitled to a devise of the bungalow by virtue of the doctrine of proprietary estoppel; and, on the other hand, to the desire of the executors, understandable and natural as it is, to obtain a grant and proceed with such matters as they needed to proceed with in the course of administering the estate. It would have been apparent to the executors but was not, I think, reasonably apparent to the defendant’s solicitors, that this estate has certain liabilities, as one would expect, by way of funeral costs and a few other debts and the liability for the costs of the administration, but very little in the way of liquid assets. Those sorts of matters, not expressly adverted to in the correspondence, are precisely the sort of matters which might have led at a meeting to an exploration of the most sensible way of taking this unfortunate family dispute forward without either side incurring unnecessary costs.

In those circumstances, in my judgment, this is a case where it falls within special circumstances justifying the exceptional course of providing no order as to costs. The executors will be left to recover their costs out of the estate, and I say nothing which would cast any doubt upon that. It seems to me that, in the circumstances of this case, it would have been better for all concerned for a meeting to have taken place before proceedings were issued in February. The matters which were expressly referred to in the correspondence, namely the lack of an agenda, the lack of detailed proposals, the lack of witness statements and the costs involved, were none of them, in my submission, sufficient to justify a refusal to hold a meeting. The lack of an agenda was something that was in the event cured, but in any event I see no reason why the executors should not go to a meeting with a claimant of this sort and find out what it is that she wants and what it is that she proposes. The lack of detailed proposals and the lack of detailed witness statements are matters which could quite naturally lead executors at such a meeting to take the position that, now that they understood what it was that was being suggested, they would have to go away and take instructions. I certainly do not regard it as likely that an initial meeting would have led to the complete settlement of all claims, but I do regard this as a case where it would have been preferable to explore what was in issue between the parties and how best the matters could be taken forward without the necessity for this litigation.

Accordingly, I will dispose of this application by making no order as to costs.