Patricia Jane Griffin v David Howard Higgs

JurisdictionEngland & Wales
JudgeStephen Jourdan
Judgment Date03 October 2018
Neutral Citation[2018] EWHC 2498 (Ch)
CourtChancery Division
Docket NumberAppeal ref: CH 2017-00295, Case ref: HC 2016 002101
Date03 October 2018

[2018] EWHC 2498 (Ch)

IN THE HIGH COURT OF JUSTICE

BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES

APPEALS (CH D)

ON APPEAL FROM THE ORDER OF DEPUTY MASTER LINWOOD DATED 30 NOVEMBER 2017

Before:

Stephen Jourdan QC

SITTING AS A HIGH COURT JUDGE

Appeal ref: CH 2017-00295, Case ref: HC 2016 002101

Between:
Patricia Jane Griffin
Claimant
and
1. David Howard Higgs
2. Robert Ernest Leek
3. Arnold John Homer (the Executors of Patricia Dorothy Folkes, Deceased)
4. Constantine Folkes
5. Samson John Folkes
6. Cleopatra Liana Folkes
7. Amy Angela Folkes
Defendants

Elspeth Talbot Rice QC instructed by Withers LLP for the Fourth to Seventh Defendants

Angus Burden instructed by Higgs & Sons for the First to Third Defendants

Alexander Learmonth instructed by Bircham Dyson Bell LLP for the Claimant

Hearing dates: 26 and 27 June 2018

Stephen Jourdan QC:

Introduction

1

Mr John Folkes and his wife Mrs Patricia Folkes (“Mrs Folkes”) had three children; the Fourth Defendant, Constantine Folkes, who I will refer to as “Con”, the Claimant, Patricia Jane Folkes, known as Jane Griffiths, who I will refer to as “Jane” and a third child who is not a party, James Folkes. Jane had two children, Tosca and Conrad. James Folkes also had two children, Laura and Max. Con had three children, Samson, Cleopatra and Amy Folkes, who are the Fifth, Sixth and Seventh Defendants. I will refer to them as “Con's Children” although they, as well as Tosca, Conrad, Laura and Max, are all adults.

2

The family's assets included shares in steel and real estate companies, a very large house in substantial grounds called Stourton Hall, and a holiday home at Pen-y-Graig in Anglesey. John Folkes died in 1991 and Mrs Folkes on 20 December 2014.

3

By her last will, Mrs Folkes appointed the First, Second and Third Defendants as her executors and trustees. I will refer to them as “the Executors”. The First Defendant, Mr Higgs and the Second Defendant, Mr Leek are both solicitors, both of Higgs & Sons, and Mr Homer, the Third Defendant, is an accountant, and they had acted for Mrs Folkes for many years. Mr Higgs drew up her wills, codicils and letters of wishes.

4

By her last will with its codicils, Mrs Folkes left her personal chattels to the Executors, and the remainder of estate on discretionary trusts, with her children and grandchildren as beneficiaries. Mrs Folkes left a letter of wishes saying that she wanted £50,000 be paid to each of James and Jane, and that after those payments the trust fund be divided in three equal parts with Con, Jane and James each receiving the income from one part, their respective children receiving the capital, in equal shares, after their parent's death.

5

She also left a letter dated 29 July 2011 prepared by Mr Higgs and signed by Mrs Folkes in which she said that her personal chattels at Pen-y-Graig and Stourton Hall, which included gold coins kept at Stourton Hall, had already been given to Con, in 2000 and 2005 respectively.

6

On 18 July 2016 Jane issued a part 8 claim form against the Executors, seeking an order that Mark Keenan, a solicitor at Mishcon de Reya, be appointed as administrator of Mrs Folkes' estate in place of the Executors. This was because Jane considered there were a number of transactions entered into and documents executed by Mrs Folkes during her life that Jane considered required investigation. She did not consider that the Executors had sufficient independence to investigate them fairly, as they had been involved in some of them personally, and she thought that the Executors favoured Con and Con's Children. Jane did not join any of the other beneficiaries under the will as defendants.

7

Con and Con's Children then applied to be joined as defendants and following a hearing on 24 February 2017, at which Jane opposed their joinder, on 28 March 2017, Deputy Master Linwood ordered that they should be joined.

8

There was then a 3 day trial of the claim before the Deputy Master, at which submissions were made by counsel for Jane, for the Executors, for Con, and for Con's Children, followed by a reserved judgment given on 15 November 2017 (“the Main Judgment”). In the Main Judgment, the Deputy Master decided that the Executors should be replaced by an independent administrator, although not Mr Keenan, but rather by a solicitor based in the Midlands, whose fees would be lower. There is no appeal from any aspect of the Main Judgment.

9

On 15 November 2017, the Deputy Master heard submissions on the costs of the claim, and on 30 November 2017 he delivered a reserved judgment on costs (“the Costs Judgment”) and made a costs order giving effect to that judgment (“the Costs Order”).

10

The Costs Order divided liability into two periods, the period up to the date of the hearing on 24 February 2017 (“the First Period”) and the costs incurred after that date (“the Second Period”). The significance of 24 February 2017 to the Costs Order was that shortly before the hearing on that date, the Executors, who had until then actively opposed their removal, dropped their opposition to Jane's application for them to be removed and thenceforward took a neutral stance. The Deputy Master ordered as follows:

(1) All seven Defendants were jointly and severally liable to pay Jane's costs during the First Period, up to 24 February 2017.

(2) Con and Con's Children were jointly and severally liable to pay both Jane's and the Executors' costs incurred during the Second Period, from 24 February 2017.

(3) The Executors were not entitled to any indemnity from the estate in respect of their own costs either before or after 24 February 2017.

(4) A payment of £150,000 on account of costs from all the Defendants was to be made to Jane.

11

There are a number of grounds of appeal against the Costs Order relied on by Con and Con's Children on the one hand and the Executors on the other, for which permission to appeal has been given, in some cases by Nugee J, in some cases by Rose J, and in some cases by me. I heard submissions from counsel over 2 days and also received some subsequent written submissions. I am grateful to all counsel for their clear and helpful submissions. I will address the grounds of appeal in turn below, taking Con and Con's Children's grounds of appeal first, and then those of the Executors. Before doing that, I will (1) summarise how the dispute developed; (2) summarise the main findings of the Deputy Master in the Main Judgment (against which there has been no appeal); (3) summarise the Costs Judgment; and (4) summarise the principles applicable to an appeal against a costs order.

How the dispute developed

12

After Mrs Folkes' death, in June 2015, Jane by her solicitors, Bircham Dyson Bell (“BDB”) wrote to Higgs & Sons with a request for information and documents relevant to the question of whether the will and codicils were valid — whether Mrs Folkes had the mental capacity needed, whether there was any undue influence, and whether she knew and approved the contents of the documents. In Larke v Nugus [2000] WTLR 1033, it was held that a solicitor should reply to a request of that kind. Requests of that kind are, therefore, now known as Larke v Nugus requests. There followed correspondence about that issue, in which Jane contended that the Executors should resign because they were biased in favour of Con. The Executors disagreed, as did Con and Con's Children.

13

It was not until March 2016 that BDB raised for the first time queries about certain transactions during Mrs Folkes' life. In their letter dated 16 March 2016 to Mr Homer, they said that there were numerous substantial concerns as to the assets that should fall within the estate and significant transactions during Mrs Folkes' lifetime. They said that the issues raised involved Mr Higgs and Mr Leek both as executors and as professional advisers to Mrs Folkes, Con and the family companies, that there were material conflicts of interests and that the Executors should step aside to allow independent executors to be appointed to undertake a thorough investigation. The issues raised included an allegation that the chattels in Stourton Hall, other than the dining room furniture and the contents of the cellar, had not been given to Con, contrary to what was said in the letter of 29 July 2011. The letter made criticisms of the part that Mr Higgs had played in the production and signing of that letter, which it was said had been procured by Con. The letter pointed out that the 29 July 2011 letter contradicted earlier letter of wishes which made it clear that the chattels had not been given to Con. There were many other allegations.

14

On 20 May 2016, BDB sent to Higgs & Sons a draft witness statement made by Jane. They asked the Executors to voluntarily agree to step aside and said: “it is inevitable that in the event the application is opposed, it will be successful and your clients will be condemned in costs”.

15

They did not send a copy of the statement to Con and Con's Children, but Higgs & Sons did. On 10 June 2016, Withers acting for Con wrote to Higgs & Sons saying that Con did not consider that there was any justifiable legal basis for the Executors to step down or be removed. On 13 June 2016, Mills & Reeve, acting for Con's Children, wrote to Higgs & Sons saying that Con's Children were strongly of the view that their grandmother's wishes should be adhered to: “They are adamant that the executors named in the Will should remain in place and we are instructed to oppose any application to have them removed. For the avoidance of doubt, we would also point out that our clients take issue with a number of points raised in Jane Griffin's draft witness statement”.

16

The Executors did not agree to stand down, and on 18 July 2016 Jane then issued this claim, using a part 8 claim form supported by a witness statement made by Jane, which was 72 pages long...

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