Pauline Ann Price v Valerie Ann Saundry
| Jurisdiction | England & Wales |
| Judge | Paul Matthews |
| Judgment Date | 25 March 2019 |
| Neutral Citation | [2019] EWHC 1039 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: C30BS640 |
| Date | 25 March 2019 |
[2019] EWHC 1039 (Ch)
HIS HONOUR JUDGE Paul Matthews
(Sitting as a Judge of the High Court)
Case No: C30BS640
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN BRISTOL
PROPERTY, TRUSTS AND PROBATE LIST (ChD)
Bristol Civil Justice Centre
2 Redcliff Street
Bristol BS1 6GR
Mr Alexander Learmonth (instructed by Michelmores LLP) appeared on behalf of the Claimant
Mr Ewan Paton (instructed by Powells Law) appeared on behalf of the First Defendant
Mr Michael Selway appeared on behalf of the Second Defendant
(As Approved)
HHJ This is my judgment on the costs questions arising from litigation carried on between the claimant and the defendants. The claimant is a beneficiary under a trust and the first defendant is a trustee of that trust. The second defendant is the executrix of a former trustee of that trust. The main part of the litigation has been conducted between the claimant and the first defendant. The second defendant's part has been limited to some costs issues which have arisen.
The substance of the litigation founded on the fact that the claimant claimed to be beneficiary of two trusts deeds executed both by her and the late Mr Alan Saundry in 2006 and 2009. The first defendant is Mr Saundry's widow, and also the executrix and residuary beneficiary of his estate. Mr Saundry was named as settlor in the trust deeds. He was also appointed the sole trustee. On his death in 2013 the first defendant became trustee by virtue of her position as the sole personal representative of the trustee.
The litigation between the claimant and the first defendant began as an application to remove the first defendant and her brother, Martin Sanders, who by then had been appointed a trustee as well. However, subsequently, after her brother had unfortunately died and the second defendant was subsequently appointed to represent his estate (she being his widow), the litigation changed its course.
I will first deal briefly with the original focus of the litigation. This was a claim to remove the defendants as trustees of these trusts, on essentially three grounds. Firstly, that the first defendant had refused to appoint the claimant as a trustee of the trusts. Instead she had appointed her brother, Mr Sanders, and this was alleged to be a breach of the terms of the trust, so a breach of trust. Secondly, the first defendant, it was said, had made an attempt to buy one of the trust properties at 60 Bristol Road Lower at what was alleged to be an undervalue. The third ground was that there had been a lack of disclosure of financial and accounting information from both of the trustees to the claimant.
As I have said, that was the form of the claim as originally made, and that remained the case up until 13 September 2017. During that time, the portfolio of residential properties which had been built up by Mr Saundry and the late Mr Price had begun to be sold. There is some controversy as to exactly what was sold and at what time, but in broad terms a few of the properties were sold towards the beginning and as time went on the number increased so that by September 2017, 16 out of 20 properties had been sold and the others were in the course of being sold.
One month before the trial of the removal claim, the parties agreed at that stage that it would be sensible if the focus of the claim were shifted from the removal application to an accounting exercise. The reason for that seems to have been that the claim to remove the trustees from the trusteeships made a lot of sense when there were properties in the portfolio but made less sense when it was just a question of money, the properties having been sold and the money remaining simply to be distributed and accounted for.
At what was supposed to be the pre-trial review, before Mr Simon Monty QC (as he then was), sitting as a deputy judge of this Division, it was agreed and an order was made by consent that, instead of the matter proceeding to trial as an application to remove the trustees, it would proceed as an account in common form whereby the defendants would account to the claimant for the trust funds which had come into their hands and for what they had done with those funds.
From 13 September 2017, therefore, this claim went along a completely different path, with a different object in view. There was no claim being made thereafter for breach of trust as such. There was simply a claim that the claimant should have an accounting with vouchers to support the account of what was in the trust fund and what had happened to it. That led to a hearing ultimately before me in February last, over two days.
There is a third part of the claim, which I mention at this stage so that it is not forgotten. During the course of the accounting, an issue arose as to whether or not one of the properties was properly a trust property or not. The first defendant claimed that it had been included by mistake and that the relevant trust deed should be rectified to remove that property from the trust deeds. That was argued separately over two half-days on 14 and 15 February and I gave a written judgment in that application, which I handed down on 7 March 2019. On that rectification application I held that there should be no rectification of the trust deeds and that the property concerned (called 7 Linwell Close) should be still treated as a trust property and, therefore, subject to the account which was proceeding.
I turn to consider the costs consequences of what has happened in relation to each of those three parts, two main parts and one, as it were, addendum (the rectification point). Before I do that, I am going to say something a little more generally about costs rules for the benefit of the lay clients.
The court has a discretion in relation to costs. This is clear from section 51 of the Senior Courts Acts 1981 and also from the procedural rules set out in the code known as the Civil Procedure Rules. The court has to follow those rules. The court enjoys a discretion, but it is a discretion which is not unlimited, and it must be exercised on judicial principles. CPR 44.2(1) repeats the rule that the court has a discretion as to whether to make an order in respect of costs.
CPR 44.2(2) provides that, if the court decides to make an order about costs, the general rule is that the unsuccessful party should pay the costs of the successful party. However, it is made clear that the court may make a different order, so although the default position is that the unsuccessful pays the successful's costs, the court can deliberately decide for a reason to make a different order.
In CPR 44.2(3) there are some exceptions to the general rule for certain proceedings in the Court of Appeal. They do not concern us. There are also a couple of exceptions created by the case law, one of which, for example, relates to probate proceedings, but these again do not concern us here.
CPR 44.2(4) provides that, “The court will have regard to all the circumstances.” That is what it says and including in that specifically the conduct of the parties, which is further elaborated on in paragraph (5): who has had success (if anybody), and also taking into account any admissible offers to settle the proceedings. But the rule is the court must take into account all the circumstances.
The first question that the court has to decide logically according to these rules is whether the court should make an order at all and then, if it decides to do so, who should be regarded as the successful and who the unsuccessful party in relation to the litigation. I am going to deal with this, as I have already said, in three parts and I will first of all look at the period from the time that the proceedings were issued in June 2016 through to the pre-trial review consent order on 13 September 2017.
During that time, the focus of the claim was a claim to remove the trustees from the trusteeship. The problem that the court has is that no decision was ever made on that claim. The court has never tested by a trial the evidence put forward to show that the grounds put forward by the claimant were justified and that the defendants ought to be removed. Nor has there been any agreement between the parties, no compromise which could have indicated in a rough and ready way who the parties themselves regarded as the successful or unsuccessful party. The court is faced here with a difficult question, which is: what material is there upon which the court can decide whether or not to make an order as to costs, and, if somehow it can, what...
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Pauline Ann Price v Valery Ann Saundry
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