Stephen John Culliford v Jocelyn Thorpe
| Jurisdiction | England & Wales |
| Judge | Paul Matthews |
| Judgment Date | 02 October 2018 |
| Neutral Citation | [2018] EWHC 2532 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: D30BS708 |
| Date | 02 October 2018 |
[2018] EWHC 2532 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BRISTOL DISTRICT REGISTRY
Bristol Civil Justice Centre
2 Redcliff Street, Bristol, BS1 6GR
HHJ Paul Matthews
(sitting as a Judge of the High Court)
Case No: D30BS708
Porter Dodson for the Claimants
Burnetts for the Defendant
Introduction
On 8 March 2018 I handed down my reserved judgment in this claim, in essence in favour of the Defendant. The parties were unable to agree the order to carry my judgment into effect, and I heard them further on 16 April 2018, at some length, after which I made the necessary order (“the Order”). This provided (at [6]) that the
“Claimants should pay the Defendant's costs of the claim, including the costs of this hearing, on the standard basis, to be assessed if not agreed”.
The Order did not however make any provision for an interim payment on account of costs, notwithstanding CPR r 44.2(8), which states that
“Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so”.
Regrettably I overlooked that provision at the time, and neither side reminded me of it.
After the Order had been sealed and sent out by the court, however, the Defendant's solicitors raised the matter of a payment on account of costs with the Claimants' solicitors in correspondence. The Claimants' solicitors pointed out that the Order made no provision for such a payment. The Defendant's solicitors referred to r 44.2(8). The correspondence continued between them, but they were unable to agree, and on 12 June 2018 the present application, in Form N244, was made by the Defendant and issued by the court. This was supported by a witness statement of Mr James Johnston, a partner in the Defendant's solicitors, which exhibits relevant correspondence and other documents. In addition, each side has by its solicitors made written submissions, which I have read. The application has been dealt with on paper, without putting the parties to the expense of oral argument.
The parties' positions
In essence, the defendant says that he should not be precluded from obtaining an interim costs payment whilst he waits for the final costs amount to be determined, whether by detailed assessment or otherwise. He refers to commentary in the White Book at paragraph 44.2.12, and to Mars UK Ltd v Teknowledge Ltd [2000] FSR 138, where Jacob J held that
“where a party is successful the court should on a rough and ready basis also normally order an amount to be paid on account, the amount being a lesser sum than the likely full amount.”
The Defendant says that a realistic starting point for assessing what a reasonable sum should be would be the Defendant's costs budget, which was approved by the court.
The Claimants say that there was a good reason within rule 44.2 (8) for not ordering them to pay a reasonable sum on amount of costs, and that is that the Defendant did not request any such payment at the time that the order was made. They also say that it is not required that the court make an order of its own volition. Moreover, they say that, if a request had been made at that time, they would have opposed it, on the basis that they act in a fiduciary capacity as personal representatives of the estate of the deceased, and that the estate has no funds until the property in dispute is sold. They say that this also would be a good reason for not making an order for an interim payment of costs on account. Had the court been minded to order such a payment, the Claimants would have sought a different order for sale, so that the property be sold earlier, so as to put the estate in funds.
Thirdly, the Claimants say that, since the defendant made no application for a payment on account before the order was sealed, the next opportunity for doing so arises only after a request for a detailed assessment hearing has been filed, pursuant to rule 47.16 (1). In this respect they rely on a decision of mine, sitting as a chancery master, in Ashman v Thomas [2016] EWHC 1810 (Ch). That was a case where costs were awarded to a party but no order for a payment on account was made at the time that the order was pronounced. However, before the order was sealed, the receiving party wrote to the court and asked that such an order for payment on account be made. The paying party said it was too late.
I held that, since the order had not yet been sealed, the court had power under the so-called Barrell jurisdiction ( Re Barrell Enterprises [1973] 1 WLR 19, CA) to make a different order from that pronounced, if appropriate. I know I said (at [5]) that the substantial question was “whether a request for a payment on account can only be made at the hearing itself”, but it was not in fact a case where I had to decide whether there was a limit beyond which no application (in the formal sense) for such a payment on account could be made. In the present case the facts are different, as the order has been drawn up and entered.
The Defendant in reply relies on the decision of the Court of Appeal in Blackmore v Cummings [2009] EWCA Civ 1276, where Elias LJ said that:
“There is a wide discretion afforded by both CPR rule 44.3 (8) and CPR rule 47.15 to be exercised in the circumstances of the particular case, and all material factors have to be weighed in the balance. These will include those identified by Jacob J in the Mars case.”
The Defendant also cites the White Book at paragraph 44.2.12 to the effect that the delay by the receiving party in making an application for detailed assessment was a relevant factor in deciding whether to order a further payment on account.
The Defendant argues that the fiduciary capacity of the Claimants does not help them, since he says that they failed to remain neutral in relation to the Defendant's counterclaim and failed to obtain the directions of the court in relation to defending that counterclaim at the expense of the estate. They have instead engaged in adversarial litigation from which as beneficiaries on the intestacy of the deceased they might have benefited personally.
In this respect the Defendant relies on a passage from the judgment of Ward LJ in Shovelar v Lane [2011] EWCA Civ 802, [48], a case on the doctrine of mutual wills:
“I conclude that the executors did not conduct themselves reasonably. They accepted service on behalf of all defendants yet they assumed the responsibility at first of putting in the only defence, making no admissions and putting the claimants to proof of the agreement to treat the mutual wills as irrevocable. They also took the bad point that section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 applied. Although they had at an early stage written of their need ‘to steer a median course’ and ‘to be guided by the court’ they did not adopt that position of neutrality in their defence. They did not indicate that they would be bound by the decision of the court and hold the estate to abide that decision. They did not seek directions from the court. Instead they assumed the role of defendants and when the defence was amended to join the family members, they, the executors, continued their stout resistance. They did not stand aside. There was nothing to distinguish their conduct from the conduct of the family members. The questions put in cross-examination to test the claimants' case were put as much for the benefit of the executors as for the beneficiaries under the 2003 will.”
The Defendant also argues that although there may be a general rule in probate cases that costs come out of the estate that does not apply to trust claims brought in the Chancery Division of the High Court, such as this is. He relies on a further passage from the judgment of Ward LJ in Shovelar v Lane [2011] EWCA Civ 802, [44]:
“I conclude that the so-called rule in probate cases does not apply in the case before us. The probate rule is rooted in the inquisitorial exercise that was conducted by the Ecclesiastical Courts and the Probate Division where the court had to be satisfied of the validity of the will before it could pronounce for the will and admit it to probate. The effect of mutual wills upon the distribution of the estate under a later will which is admitted to...
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...that party to pay a reasonable sum on account of costs, unless there is good reason not to do so”. Secondly, in Culliford v Thorpe [2018] EWHC 2532 (Ch), I held that an application could be made for an interim payment on account even after the formal order had been drawn up and 5 Thirdly, ......