Christine Mary Green (as Administratrix of the Estate of Peter Maclean Maitland Deceased) (Claimant/ Applicant) v Richard Joseph Astor and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Roth |
| Judgment Date | 28 June 2013 |
| Neutral Citation | [2013] EWHC 1857 (Ch) |
| Date | 28 June 2013 |
| Court | Chancery Division |
| Docket Number | Case No: HC12B04641 |
[2013] EWHC 1857 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Roth
Case No: HC12B04641
Penelope Reed QC & Charlotte Edges (instructed by Veale Wasbrough Vizards) for the Claimant/Applicant
Robert Ham QC (instructed by Harcus Sinclair) for the Defendants/Respondents
Hearing date: 5-6 June 2013
Introduction
This judgment concerns the costs of an application by the administrator of an estate pursuant to CPR Part 64.2(a). However, to say that it concerns "only" costs would be an understatement. Most of the substantive issues in the application were resolved by agreement and the rest dealt with in a short unreserved judgment delivered at the hearing, following a narrowing of the issues by reason of case management directions given by Peter Smith J on 2 May 2013. However, the argument as to costs took more than a day of court time, which is not a criticism of the experienced counsel involved but a reflection of the significance of the issues raised.
In Howell v Lees-Millais [2011] EWCA Civ 786, [2011] WTLR 1795, Lord Neuberger MR expressed concern about excessive costs being incurred on such an application, which in that case he described as "little short of scandalous". There, the costs exceeded £1 million but the case was actually argued over 12 days. It is a striking feature of the present case, where the argument on the substance of the issues lasted less than a day and where the proceedings involved only a few previous case management hearings, that the total costs including those which I was informed had been incurred by the first defendant (the only defendant to oppose the application) are over £900,000. Moreover, I was told that out of that total the claimant's costs amounted to over £400,000. Albeit that was based on an expected five day hearing whereas the application was disposed of in two days, this is nonetheless a staggering figure for an application of this kind, especially where the aspect of the estate at issue, while not small, was less than (and possibly significantly less than) £8 million.
It is against that background that the claimant, represented by Ms Reed QC and Ms Edge, argued that most if not all of the costs should be paid by the first defendant and not come out of the estate. For his part, the first defendant, represented by Mr Ham QC, submitted that at least a substantial part of the costs should be paid by the claimant personally.
The estate directly concerned is that of Peter Maitland who died on 12 October 2009. The first defendant, Mr Richard Astor, was one of the two executors and a beneficiary under Mr Maitland's will. The other named executor renounced his executorship at the outset, and after one of the beneficiaries applied for Mr Astor to be removed he resigned by consent and the claimant, Mrs Green, was appointed administrator in his place by order of Vos J on 17 February 2010. Mrs Green is a partner at Veale Wasborough Vizards, solicitors.
Apart from two charities, there are six beneficiaries of the residuary estate under Mr Maitland's will ("the Maitland Estate"). Mr Astor has a 28% share.
There has been no particular problem concerning the English assets of the Maitland Estate, which I understand have by now been realised and interim distributions have been made. These proceedings arise as a result of the interest of the Maitland Estate under the will of Mrs Anne Norman, who was domiciled in Switzerland and died on 20 June 2002. In December 1995, Mrs Norman had suffered a stroke and she spent the last years of her life in a nursing home. She bequeathed her residuary estate ("the Norman Estate") leaving 25% to Mr Maitland, 50% to Lord Freyberg and 25% to a Mr Francis Burne. Mr Maitland and Mr Burne became the two effective executors of the Norman Estate and during her lifetime they had also been attorneys to Mrs Norman pursuant to powers of attorney which she had granted in December 1995 and February 199It is the Maitland Estate's 25% share in the Norman Estate that gave rise to the issues raised in these proceedings.
In about 2005, Mr Maitland became suspicious that Mr Burne had been misappropriating assets from Mrs Norman, both during her lifetime by making use of his power of attorney and after her death by using his position as executor of the Norman Estate. Mr Maitland devoted considerable efforts to investigate the activities of Mr Burne and was assisted in that by Mr Astor, who was a personal friend of Mr Maitland. In due course, Lord Freyberg also became aware of Mr Burne's activities and was similarly concerned. By the time of Mr Maitland's death in October 2009, two sets of proceedings had been issued in Switzerland. The first, before the Justice of the Peace in Lausanne ("the JP Proceedings"), were issued against Mr Burne and on 24 November 2009 an interim order was made in Switzerland freezing the assets of the Norman Estate and limiting Mr Burne's authority. That injunction was made final on 11 June 2010 and £2.6 million was frozen as a result.
The second proceedings, referred to as the Partition Proceedings, were issued on 22 September 2009 before the District Court of Lausanne by Lord Freyberg against Mr Burne and Mr Maitland under Article 604 of the Swiss Civil Code, seeking a winding up of the Norman Estate and the distribution of the assets. They were apparently issued to place Mr Burne under maximum pressure to provide an account of his dealings with the assets of the Norman Estate.
Subsequent to her appointment as administrator, Mrs Green was substituted as party in place of Mr Maitland in both the JP Proceedings and the Partition Proceedings.
By her Part 8 claim form, Mrs Green sought four heads of relief:
(1) approval of her decision to enter into a Tomlin Order made on 20 October 2011 in the proceedings issued against Mr Francis Burne (the "Tomlin Order claim");
(2) that she be authorised to enter into a Partition Agreement with Lord Freyberg in relation to the apportionment of costs and distribution of the Norman Estate (the "Partition Agreement claim");
(3) that she not be obliged to issue proceedings against a number of specified third parties (the "third parties claim");
(4) that her costs assessed on an indemnity basis be paid out of Mr Astor's share of the residue of the Maitland Estate.
The three distinct heads of claim give rise to different considerations on the question of costs. In order to address the contested applications for costs, it is necessary first to set out in some detail the basis of these underlying claims brought by Mrs Green.
The factual background: the Tomlin Order and Partition Agreement
For the purpose of the present proceedings, it is common ground that Mr Burne was guilty of substantial misappropriations from Mrs Norman during her lifetime and from the Norman Estate after her death. Upon her appointment as administrator, Mrs Green had the task of continuing the investigations commenced by Mr Maitland and seeking evidence as to the extent of the misappropriations and potential for claims against Mr Burne. As regards the Swiss proceedings, she was advised by Maître Cron, a Swiss lawyer at the well-known Geneva firm of Python & Peter, who had originally been instructed by Mr Maitland. Because of the impending expiry of the Swiss limitation period, attachment proceedings were commenced by Mrs Green and Lord Freyberg against Mr Burne on 16 July 2010 before the Justice of the Peace of Lausanne ("the Attachment Proceedings"). Those further proceedings were instituted because neither the JP Proceedings nor the Partition Proceedings actually constituted an action against Mr Burne for the recovery of the misappropriated assets of the Norman Estate. An attachment order was granted sequestrating Mr Burne's 25% share of the Norman Estate held in a Swiss bank. Further, in order to maintain the Attachment Proceedings, it was necessary to issue proceedings in the UK against Mr Burne. In consequence, on 16 September 2010, Mrs Green and Lord Freyberg issued a claim against Mr Burne in the High Court ("the English Proceedings").
The English Proceedings were compromised following mediation on 9 May 2011. In summary, Mr Burne agreed to:
a) pay the sum of £3.5 million, subject to security, to Mrs Green (as administrator of the Maitland Estate) and Lord Freyberg;
b) relinquish all his interests in the Norman Estate; and
c) renounce his executorship of the Norman Estate.
In reaching that compromise, Mrs Green was advised by leading counsel and also by Me Cron who considered it a favourable settlement for the Maitland Estate. A copy of leading counsel's opinion was sent by Mrs Green to the beneficiaries.
Heads of terms were signed but were conditional upon Mrs Green obtaining the consent of the residuary beneficiaries of the Maitland Estate to the terms of the settlement. Signed forms of consent were provided by all the beneficiaries, including Mr Astor, in the course of June 2011 and the settlement was embodied in a Tomlin Order made by Master Price on 20 October 2011. However, shortly before his then solicitor signed the consent form on his behalf, Mr Astor sent a long e-mail to Mrs Green, of which paragraph 1 stated:
"STILL NOT GENUINELY FULLY INFORMED: i note with disappointment but no surprise — the present situation is exactly as predicted — your continuing failure to genuinely fully inform me of many material aspects of your administration. i wonder...
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