National Westminster Bank (Applicant/Claimant) v Luke Lucas and Others (Respondent/Defendant)
| Jurisdiction | England & Wales |
| Judge | Mr Justice Sales |
| Judgment Date | 01 April 2014 |
| Neutral Citation | [2014] EWHC 1683 (Ch) |
| Docket Number | Case No: HC13F00355 |
| Court | Chancery Division |
| Date | 01 April 2014 |
In the Matter of the Administration of the Estate of Jimmy Savile
[2014] EWHC 1683 (Ch)
The Honourable Mr Justice Sales
Case No: HC13F00355
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Rolls Building
Fetter Lane
London EC4A 1NL
Mr M Cunningham QC (instructed by Osborne Clarke) appeared on behalf of the Claimant
Mrs T Peacocke (instructed by PWT Advice LLP) appeared on behalf of the First and Second Defendants
Mr P Feltham (instructed by Slater & Gordon (UK) LLP) appeared on behalf of the Third and Fourth Defendants
Mr A Cosedge (instructed by PWT Advice LLP) appeared on behalf of the Fifth Defendant
Mr N Block QC (instructed by Capsticks LLP) appeared on behalf of the Sixth Defendant
Approved Judgment
This is a hearing to deal with consequential matters, most particularly costs, arising from the hearing of the two applications addressed in my judgment in these proceedings of 11 March 2014 (see 2014 EWHC 653 (Ch), "the main judgment"). Subject to issues of cost, the form of the Scheme and of the order to be made has been debated and agreed. This ruling addresses the question of costs, which has been contentious.
I address first the costs in relation to the Trust's application to remove the Bank as executor. The Bank seeks its costs of that application from the Trust, to be paid on the indemnity basis. In my judgment, that is the just and appropriate order to make.
This was a hostile application brought by the Trust. The Trust lost on its application. Liability for costs as between the Bank and the Trust should, in my judgment, follow the event in accordance with the usual principal in CPR part 44. Although Mrs Peacocke, for the Trust, asserted that the Bank had behaved unreasonably or improperly by serving its skeleton argument on this application late in the day, I do not consider that there should be any disallowance of the Bank's costs or any cross-order for payment of the Trust's costs by reason of this. I do not consider that late service of the Bank's skeleton had any material impact whatever on the conduct or outcome of the litigation in relation to the Trust's application or, indeed, in relation to the outcome of the Bank's application. There was never any prospect that the Trust would back down when it saw the fairly obvious points made by the Bank in that skeleton argument. The Bank's resistance to the application was already clear from the correspondence and the evidence it had served.
As regards to basis for assessment of the Bank's costs, I consider that the indemnity basis is the just and appropriate basis in all the circumstances of this case. The Trust's claim against the Bank on this application and submissions made in support of it were not only wrong but, in my judgment, were so clearly and unreasonably wrong as to warrant the conclusion that the Trust has acted unreasonably and outside the norms to be expected in litigation of this kind, involving argument over the administration of what may well prove to be an insolvent estate. I accept the submissions of the Bank and the Personal Injury Claimants to that effect.
The main judgment sets the scene against which the application should be set: see especially paragraphs [20] and [21] of that judgment. Mr Cunningham QC for the Bank drew my attention to passages in the main judgment in which I was critical of the behaviour of the trust in its approach to this litigation: in particular, paragraphs [40], [42], [52], [68], [76], [81], [99] and [106]. I refer, in particular, to paragraph [99] of the main judgment where I said this:
"… Mrs Peacocke said that the Bank reacted with inappropriate hostility to the Trust when the Trust sent the Bank its draft application notice for removal of the Bank and the draft evidence in support in October 2013. I do not accept this submission. The draft application notice and evidence involved the adoption by the Trust of an unduly hostile and critical stance in relation to the Bank, effectively accusing the Bank of misconduct as executor without good reason, and the Bank was entitled to reject the draft application and the accusations in the robust way it did. It is completely unsurprising that the Bank reacted in this way. It is not a reaction from which it can be inferred that the Bank has formed an attitude of inappropriate hostility to the Trust which is likely to impede it in fulfilling its duties as executor and personal representative in due and proper manner. The Bank was entitled to point out, as it did, that the court would wish to supervise any question of replacement of the executor and that the views of others, including the PI Claimants, would be relevant matters to be taken into account in relation to such a question."
In my view, the Trust adopted an unreasonable and misconceived stance on its application. Its arguments failed to accord any proper recognition to the discretion of an executor and administrator in deciding how to proceed in administering an estate, as recognised in the authorities, and unreasonably sought to assert that the Bank owed no responsibilities to the Personal Injury Claimants or other claimants who might come forward against the Savile estate or that those responsibilities should simply be overridden in favour of the interests of the Trust and beneficiaries under Jimmy Savile's will in the course of administration of his estate. As Mr Cunningham emphasised, the Trust lost — and I would say, lost clearly and badly — on every single one of the nine points relied on by Mrs Peacocke in her argument in support of the removal application.
In my view, the Trust also behaved unreasonably in other ways. The removal application was bound up with the Trust's position on the Bank's application for approval of the Scheme, but the Trust failed unreasonably to tell the Bank the full details of its opposition to the scheme, which I refer to later. To the extent that the Trust did make its objections known, it was on the misconceived basis that the Scheme would be futile and ineffective.
The conduct of the Trust has greatly increased the cost of the administration of Jimmy Savile's estate, and unreasonably so. In all the circumstances, I consider it is just and appropriate that the estate and all those claiming against the estate in due course should have their interests protected by a costs order on the indemnity basis against the Trust. The Bank did not seek a costs order against the fifth defendant and the other beneficiaries.
In relation to the Trust's application to remove the bank, the Secretary of State and the Personal Injury Claimants also seek their costs from the Trust, also on the indemnity basis. The BBC did not seek orders for costs.
Both the Personal Injury Claimants and the Secretary of State submit that the Trust's application was hostile to the Bank, that they had a direct interest in that application because of the importance of maintaining the Bank in place to operate the Scheme in a proper fashion as contemplated in the negotiations which had led to the agreement on the terms of the Scheme, and that they were, therefore, entirely foreseeable and proper parties which the Trust should have expected to appear to contest the Trust's application to have the Bank removed as executor. As to the indemnity basis for assessment, they essentially repeat the points already made, that the Trust behaved unreasonably in what amounted to contested litigation against them as well as against the Bank.
I accept these submissions, which are amply supported, in my view, by the factual background in the case, as reviewed in the main judgment. The Personal Injury Claimants and the Secretary of State had their own direct interest in the outcome of the removal application brought by the Trust, not least because an important part of the Trust's argument was that the Bank was behaving improperly by giving weight to their interest in the administration of Jimmy Savile's estate by negotiating and agreeing the Scheme with them. Also, the Trust, as already mentioned, kept the full scope of its objections to the Scheme, as it had been negotiated by the Secretary of State and the Personal Injury Claimants with the Bank, up its sleeve until the hearing of its application.
I consider the contest regarding the removal of the Bank was in substance as much a contest between the Trust and the Personal Injury Claimants and the Secretary of State as a contest between the Trust and the Bank in the unusual circumstances of this case, so that again costs should follow the event as between the Trust and those parties.
For the reasons already given, I consider that the Trust behaved unreasonably and outside the norms of proper conduct of litigation in cases of this kind and that the indemnity basis for assessment is just and appropriate.
Neither the Trust nor the other beneficiaries seek an order for their costs to be paid out of the estate in relation to the Trust's application.
I turn then to the application by the Bank for approval of the Scheme. The Bank submits that the Trust's stance in relation to its application seeking the approval of the Scheme has greatly increased the costs for the Bank in seeking and obtaining the approval of the court for the Scheme and that this should be reflected in the costs order made. I was referred to Green v Astor [2013] EWHC 1857 (Ch), in...
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