Daniel Kenig v Thomson Snell & Passmore LLP
| Jurisdiction | England & Wales |
| Judge | Brown |
| Judgment Date | 01 February 2023 |
| Neutral Citation | [2023] EWHC 181 (SCCO) |
| Court | Senior Courts |
| Docket Number | Case No: SC-2022-APP-000292 |
[2023] EWHC 181 (SCCO)
COSTS JUDGE Brown
Case No: SC-2022-APP-000292
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE
Mr. Gold, costs draftsman, instructed by SCS Law solicitors, for the Claimant
Ms. Tew, counsel, instructed by and for the Defendant
Hearing dates: 3 October and 17 November 2022
Further submissions received on 12 January 2023 1
Draft circulated on 23 January 2023
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
The Claimant, who is a beneficiary of a will, seeks an assessment of bills delivered by the Defendant solicitors to the executor of the will. I have to decide whether the bills should be
assessed and, if I were to take the view that the bills should be assessed, the terms of any assessment having regard in particular to the decision of the Court of Appeal in Tim Martin Interiors Ltd v Akin Gump LLP [2011] EWCA Civ 1574The will, dated 13 February 2019, is that of Philippa Cunnick, the Claimant's mother, who died on 28 July 2019. The Claimant and his sister, Laura Peggs, were the sole beneficiaries of Mrs Cunnick's estate (each entitled to one half of the residuary estate). The Defendant solicitors were retained by Saul Biber, the sole executor of the will and Mrs Cunnick's brother, to administer the estate by formal engagement letter dated 31 July 2019 the terms of which were agreed to in an email on or about 2 August 2019.
A letter confirming the Defendant's appointment was sent to both of the beneficiaries on 6 August 2019. Probate was granted to Mr Biber on 22 January 2020.
The invoices were sent by the Defendant, by email, to the Claimant on 3 September 2021. They were accompanied by breakdowns in the form of time sheets. There were six invoices, the first interim invoice is dated 17 October 2019; and the last, the final invoice, dated 2 August 2021. It appears that sums were transferred by the Defendant from the estate to meet the claims for costs in the bills immediately after delivery or on delivery of the bills in the course of their retainer.
The Defendant's original costs estimate for their fees was between £10,000 and £15,000 plus VAT and expenses. The total of their charges in the bills was £54,410.99 plus VAT and expenses. The estate had a gross value of some £2,881,000. The Claimant says however that the administration of the estate was not complicated and the costs were, as he has put it, grossly excessive.
The Claimant seeks an assessment of the Defendant's invoices under the Solicitors Act 1974, by way of a Claim Form issued on 25 April 2022, issued as I understand some 8 months after the last invoice was delivered. The Claim Form asserted that the Claimant was relying on section 70 of Solicitors Act 1974. This section deals with applications for assessment by those chargeable with a bill. However it was clear, and ultimately agreed, that the Claimant is, for the purposes of section 71(3) of the 1974 Act a “ person interested in any property out of which the trustee, executor or administrator has paid, or is entitled to pay, the bill” and not a person chargeable with the bill. The invoices are payable out of the estate of which Mr. Biber is executor; accordingly, Section 71 (3) applies and the Claimant is entitled to seek an assessment under this section.
Issues
It was accepted at the hearing in October that by the terms of the retainer with the executor the solicitors are in principle entitled to issue what are called interim statute bills; that is to say, bills which are final for the period that they cover and capable of assessment under the 1974 Act. However there remained an issue as to whether the bills in respect of which Claimant seeks assessment were (interim) statute bills and further whether, and to the extent it necessary for me to find, there are special circumstances justifying assessment of the bills and/or any discretion to allow an assessment should be exercised in the Claimant's favour. The Defendant says the invoices were interim statute bills, they have been paid and there are no special circumstances; and that in any event (even if there are special circumstances) they contend in the exercise of my discretion I should refuse the relief sought.
Ms Tew raised what strikes me may be a novel point in the context of assessments under section 71 of the 1974 Act. The point arises out of what she said was the privilege or confidentiality in respect of documents which might be relevant to any issue arising on this application (and which might otherwise be deployed to justify the costs claimed and resist this order). She says that the privilege lies with the executor and the Defendant solicitors have a duty to keep the content of such documents confidential and no proper consideration of the bills is possible in these circumstances. Relying on the principles that apply in the context of the wasted costs jurisdiction she says that I am required to give the benefit of doubt to the Defendant solicitor on this application and in any assessment; so that I should, for instance, make an assumption that the costs claimed are reasonable and that there were good reasons for the discrepancy between the estimate and the costs in fact charged. For this reason alone an assessment was a worthless remedy and in the exercise of my discretion I should refuse the application.
There is also an issue as to whether and to what extent certain restrictions set out in Tim Martin (including those at paragraph 95 of the judgment) apply to any assessment that I may order, and, if so, what the effect of those restrictions may be. The Defendant says, in essence, that there is no point in the Claimant being permitted an assessment of costs under the 1974 Act as the restrictions which apply under Tim Martin mean that no meaningful or useful determination of the costs payable by the estate can be undertaken. That could only be achieved if the executor had made an application for an assessment, and he has chosen not to do so. In the exercise of my discretion, I should dismiss the application for an assessment because nothing may be gained from it. In Tim Martin the Court of Appeal suggested that a challenge by a beneficiary might be by way of an account against executor. Ms. Tew, for the Defendant solicitors, however appears to accept that in view of the decision by the Senior Master Marsh in ( Chopping v Cowan unreported, 17 April 2013) and another decision to which I will refer, no effective alternative remedy is available to the beneficiary. However, as I understand her case, this is the necessary effect of the decision in Tim Martin and that, save in very limited respects, only an executor can challenge the bills payable by an estate. This was so notwithstanding the express terms of section 71 (3), set out below. If Ms. Tew is right then there are important consequence for beneficiaries and those involved in the administration of an estate.
Evidence
I have received a number of witness statements from both sides: two from the Claimant and three from the Defendant. It emerged at the hearing in October that there were issues of fact arising which had not been addressed in the evidence and various attempts were made, as I saw it, to assert factual matters which were not evidenced in the witness statements- in effect, to give evidence by submission. In the event the hearing ran over the allotted 2.5 hours and it was necessary to re-list the hearing, at which point I gave directions for both parties an opportunity to submit further evidence. I made it clear that if the parties wished me to take into account some of what had been said in submissions this should be addressed in evidence. Mr. Gold, who represents the Claimant, is not a lawyer and although, as I understand it, is an experienced costs draftsman it was not clear to me that he appreciated the need to address matters of evidence in witness statements. It was, I think, Ms. Tew who sought to put in further evidence, and I think suggested that Mr. Gold may wish to consider whether he should do so, in respect of the assertions he had made.
The position of Ms Peggs and Mr. Biber
Ms. Peggs has indicated that she does not wish to be a party at this stage. It appears that she may be waiting the outcome of this application before deciding whether she might participate in any assessment. The Defendant wrote to her on 24 October 2022 informing her of the proceedings, suggesting that she should have been joined to the application (a point not I think pursued before me). In the letter the solicitor also expressed some criticism of the Claimant in particular as to what is said to be a “ lack of commerciality” given what was said to be the high level of the solicitor's own costs in opposing the application; they stated inter alia that if she were a party and the application was unsuccessful they would seek an order for costs against her and the Claimant. I do not think that it can be inferred from her response following that letter, namely that she did not want to be made a party yet, that she would not be interested in an assessment if this application were successful.
Mr. Biber's views are not in evidence. He has taken no part at all in these proceedings. No reason has been provided for this by the Defendant. There is no evidence that the solicitors have even approached the executor to ask for his views. Mr. Gold says that Mr. Biber and the Claimant are essentially estranged. I have however not received direct evidence about this, albeit Mr. Gold says that the failure of Mr. Biber to challenge items of the bills supports what he told me about the relationship. Indeed, Ms...
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