Case No: HC12B04641
Neutral Citation Number: [2013] EWHC 1857 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 28/06/2013

Before :

MR JUSTICE ROTH
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Between :

	CHRISTINE Mary GREEN (As Administratrix
of the Estate of Peter Maclean Maitland Deceased)
	
Claimant/
Applicant	
	- and -		
	(1) RICHARD JOSEPH ASTOR
(2) TIMOTHY MICHAEL MAITLAND
(3) CHRISTOPHER JAMES MAITLAND
(4) PHILLIPA JANE GRAHAM
(5) MICHAEL HENRY GARTSIDE NEVILLE
(7) BATTERSEA DOGS HOME
(8) KIDNEY RESEARCH UK	

Defendants/
Respondents	

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Penelope Reed QC & Charlotte Edge (instructed by Veale Wasbrough Vizards) for the Claimant/Applicant
Robert Ham QC (instructed by Harcus Sinclair) for the Defendants/Respondents

Hearing date: 5-6 June 2013
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Judgment
Mr Justice Roth : 
Introduction 
1.	This judgment concerns the costs of an application by the administrator of an estate pursuant to CPR Part 64.2(a).   However, to say that it concerns “only” costs would be an understatement.   Most of the substantive issues in the application were resolved by agreement and the rest dealt with in a short unreserved judgment delivered at the hearing, following a narrowing of the issues by reason of case management directions given by Peter Smith J on 2 May 2013.   However, the argument as to costs took more than a day of court time, which is not a criticism of the experienced counsel involved but a reflection of the significance of the issues raised.   
2.	In Howell v Lees-Millais [2011] EWCA Civ 786, [2011] WTLR 1795, Lord Neuberger MR expressed concern about excessive costs being incurred on such an application, which in that case he described as “little short of scandalous”.    There, the costs exceeded £1 million but the case was actually argued over 12 days.   It is a striking feature of the present case, where the argument on the substance of the issues lasted less than a day and where the proceedings involved only a few previous case management hearings, that the total costs including those which I was informed had been incurred by the first defendant (the only defendant to oppose the application) are over £900,000.   Moreover, I was told that out of that total the claimant’s costs amounted to over £400,000.   Albeit that was based on an expected five day hearing whereas the application was disposed of in two days, this is nonetheless a staggering figure for an application of this kind, especially where the aspect of the estate at issue, while not small, was less than (and possibly significantly less than) £8 million.
3.	It is against that background that the claimant, represented by Ms Reed QC and Ms Edge, argued that most if not all of the costs should be paid by the first defendant and not come out of the estate.   For his part, the first defendant, represented by Mr Ham QC, submitted that at least a substantial part of the costs should be paid by the claimant personally.
4.	The estate directly concerned is that of Peter Maitland who died on 12 October 2009.    The first defendant, Mr Richard Astor, was one of the two executors and a beneficiary under Mr Maitland’s will.   The other named executor renounced his executorship at the outset, and after one of the beneficiaries applied for Mr Astor to be removed he resigned by consent and the claimant, Mrs Green, was appointed administrator in his place by order of Vos J on 17 February 2010.   Mrs Green is a partner at Veale Wasborough Vizards, solicitors.   
5.	Apart from two charities, there are six beneficiaries of the residuary estate under Mr Maitland’s will (“the Maitland Estate”).   Mr Astor has a 28% share.
6.	There has been no particular problem concerning the English assets of the Maitland Estate, which I understand have by now been realised and interim distributions have been made.   These proceedings arise as a result of the interest of the Maitland Estate under the will of Mrs Anne Norman, who was domiciled in Switzerland and died on 20 June 2002.   In December 1995, Mrs Norman had suffered a stroke and she spent the last years of her life in a nursing home.   She bequeathed her residuary estate (“the Norman Estate”) leaving 25% to Mr Maitland, 50% to Lord Freyberg and 25% to a Mr Francis Burne.   Mr Maitland and Mr Burne became the two effective executors of the Norman Estate and during her lifetime they had also been attorneys to Mrs Norman pursuant to powers of attorney which she had granted in December 1995 and February 1996.   It is the Maitland Estate’s 25% share in the Norman Estate that gave rise to the issues raised in these proceedings.
7.	In about 2005, Mr Maitland became suspicious that Mr Burne had been misappropriating assets from Mrs Norman, both during her lifetime by making use of his power of attorney and after her death by using his position as executor of the Norman Estate.   Mr Maitland devoted considerable efforts to investigate the activities of Mr Burne and was assisted in that by Mr Astor, who was a personal friend of Mr Maitland.   In due course, Lord Freyberg also became aware of Mr Burne’s activities and was similarly concerned.   By the time of Mr Maitland’s death in October 2009, two sets of proceedings had been issued in Switzerland.   The first, before the Justice of the Peace in Lausanne (“the JP Proceedings”), were issued against Mr Burne and on 24 November 2009 an interim order was made in Switzerland freezing the assets of the Norman Estate and limiting Mr Burne’s authority.   That injunction was made final on 11 June 2010 and £2.6 million was frozen as a result.   
8.	The second proceedings, referred to as the Partition Proceedings, were issued on 22 September 2009 before the District Court of Lausanne by Lord Freyberg against Mr Burne and Mr Maitland under Article 604 of the Swiss Civil Code, seeking a winding up of the Norman Estate and the distribution of the assets.   They were apparently issued to place Mr Burne under maximum pressure to provide an account of his dealings with the assets of the Norman Estate.
9.	Subsequent to her appointment as administrator, Mrs Green was substituted as party in place of Mr Maitland in both the JP Proceedings and the Partition Proceedings.
10.	By her Part 8 claim form, Mrs Green sought four heads of relief:
(1)	approval of her decision to enter into a Tomlin Order made on 20 October 2011 in the proceedings issued against Mr Francis Burne (the “Tomlin Order claim”);
(2)	that she be authorised to enter into a Partition Agreement with Lord Freyberg in relation to the apportionment of costs and distribution of the Norman Estate (the “Partition Agreement claim”);
(3)	that she not be obliged to issue proceedings against a number of specified third parties (the “third parties claim”);
(4)	that her costs assessed on an indemnity basis be paid out of Mr Astor’s share of the residue of the Maitland Estate.
11.	The three distinct heads of claim give rise to different considerations on the question of costs.   In order to address the contested applications for costs, it is necessary first to set out in some detail the basis of these underlying claims brought by Mrs Green.
The factual background: the Tomlin Order and Partition Agreement
12.	For the purpose of the present proceedings, it is common ground that Mr Burne was guilty of substantial misappropriations from Mrs Norman during her lifetime and from the Norman Estate after her death.   Upon her appointment as administrator, Mrs Green had the task of continuing the investigations commenced by Mr Maitland and seeking evidence as to the extent of the misappropriations and potential for claims against Mr Burne.   As regards the Swiss proceedings, she was advised by Maître Cron, a Swiss lawyer at the well-known Geneva firm of Python & Peter, who had originally been instructed by Mr Maitland.   Because of the impending expiry of the Swiss limitation period, attachment proceedings were commenced by Mrs Green and Lord Freyberg against Mr Burne on 16 July 2010 before the Justice of the Peace of Lausanne (“the Attachment Proceedings”).   Those further proceedings were instituted because neither the JP Proceedings nor the Partition Proceedings actually constituted an action against Mr Burne for the recovery of the misappropriated assets of the Norman Estate.   An attachment order was granted sequestrating Mr Burne’s 25% share of the Norman Estate held in a Swiss bank.   Further, in order to maintain the Attachment Proceedings, it was necessary to issue proceedings in the UK against Mr Burne.   In consequence, on 16 September 2010, Mrs Green and Lord Freyberg issued a claim against Mr Burne in the High Court (“the English Proceedings”).
13.	The English Proceedings were compromised following mediation on 9 May 2011.   In summary, Mr Burne agreed to:
a)	pay the sum of £3.5 million, subject to security, to Mrs Green (as administrator of the Maitland Estate) and Lord Freyberg;
b)	relinquish all his interests in the Norman Estate; and
c)	renounce his executorship of the Norman Estate.
In reaching that compromise, Mrs Green was advised by leading counsel and also by Me Cron who considered it a favourable settlement for the Maitland Estate.   A copy of leading counsel’s opinion was sent by Mrs Green to the beneficiaries.
14.	Heads of terms were signed but were conditional upon Mrs Green obtaining the consent of the residuary beneficiaries of the Maitland Estate to the terms of the settlement.    Signed forms of consent were provided by all the beneficiaries, including Mr Astor, in the course of June 2011 and the settlement was embodied in a Tomlin Order made by Master Price on 20 October 2011.   However, shortly before his then solicitor signed the consent form on his behalf, Mr Astor sent a long e-mail to Mrs Green, of which paragraph 1 stated:
“STILL NOT GENUINELY FULLY INFORMED: i note with disappointment but no surprise -- the present situation is exactly as predicted -- your continuing failure to genuinely fully inform me of many material aspects of your administration.  i wonder when you will choose to actually provide genuinely full information”
15.	Mrs Green stated that in the light of that e-mail she considered that Mr Astor’s consent to the settlement was conditional but, after taking further advice from leading counsel, she evidently felt sufficiently confident to agree to the Tomlin Order.   That effectively disposed of the claims against Mr Burne, although of course leaving issues as to effective enforcement of the settlement terms against him.
16.	Having resolved the claim as against Mr Burne, and with Mr Burne having renounced his share of the Norman Estate, Mrs Green began discussions with Lord Freyberg regarding the apportionment of the Norman Estate.   More particularly, those negotiations considered the shares in which the Maitland Estate and Lord Freyberg should bear the significant costs incurred in investigating Mr Burne’s misappropriations and the various legal proceedings.   No costs were recovered from Mr Burne in any of the three sets of Swiss proceedings and there was no order for costs against him under the terms of the Tomlin Order.
17.	Various offers and counter-offers were made as between Lord Freyberg and Mrs Green, on which she reported to the beneficiaries of the Maitland Estate by way of monthly reports between July 2011 and June 2012.   It is unnecessary to recount the various proposals that were made save to say that what was described as a “final” counter-offer made by Me Cron on behalf of the Maitland Estate on 12 June 2012 was accepted by Lord Freyberg.   However, that was subject to approval by the beneficiaries of the Maitland Estate.   On 11 July 2012, Mrs Green wrote to the beneficiaries setting out details of the principal terms agreed on this basis with Lord Freyberg (“the Partition Agreement”).   In summary, the terms of the Partition Agreement were: 
(a)	that of the costs of £1,307,014.55, Lord Freyberg would pay £500,000 and the Maitland Estate would pay the balance;
(b)	each party would bear their own Swiss lawyer’s fees from 17 November 2011;
(c)	Lord Freyberg would pay 50% of the costs of the English Proceedings from 17 November 2011;
(d)	the agreement would be in full and final settlement of all claims which each party had against the other;
(e)	in the event of a dispute, the English courts would have jurisdiction but Swiss law would be applied.
18.	The “full and final settlement” provision was considered important by Mrs Green since Lord Freyberg had been alleging that Mr Maitland bore responsibility for failing to detect the misappropriations by Mr Burne while they were co-attorneys for Mrs Norman during the last years of her life and then when they were co-executors under her will.   
19.	Me Cron advised Mrs Green to accept the Partition Agreement as the best result that could be obtained by negotiations and that the only alternative was to start ‘costs only’ proceedings before the Lausanne District Court, which would in themselves have been costly and time consuming and, even if successful, would have resulted in the Maitland Estate recovering only about 15-20% of its legal costs of those further proceedings.
20.	On 11 July 2012, Mrs Green wrote to the parties setting out the details of the draft Partition Agreement.   She said that once it had been approved by the Swiss lawyer to Lord Freyberg, she would be writing again formally to seek consent from each beneficiary, and added:
“If I do not receive your unanimous approval to the terms of the Partition Agreement, I must apply to the Court for approval to settle on these terms.   This would involve substantial costs to the Maitland Estate, although I will be seeking a Costs Order against any beneficiary who unreasonably withholds consent.   It will also mean a significant delay in finalising the Partition Agreement with Lord Freyberg …”
21.	This letter prompted a reply from Mr Astor by e-mail dated 17 July that runs to 4 pages of text followed by 8 pages headed “Schedule” setting out a long series of questions addressed to Mrs Green seeking more information.   It is obviously inappropriate to quote the whole of that long e-mail in this judgment.   However, its flavour and substance can be gathered from the following extracts:
“2. as you know, i do not have -- and from a relatively early stage of your administration have not had -- any trust or confidence in you. and i continue in any event -- including (for example) because of your chronic and continuing failure and refusal to properly communicate with me -- to have numerous serious concerns about the nature and quality of your administration of my friend's estate. your july 11, 2012 letter has not allayed any of them. in fact, it has added to them
…
(a) your fixed practice has been to not interact with me properly, wholly contrary to all your legal, fiduciary and professional obligations. i note the patently dishonest and bogus excuses, ploys, pretexts and excuses you have used to try to justify that practice 
(b) your fixed practice has been to request consent from me that you know is not fully informed, is materially uninformed, and is materially misinformed specifically by you
(c) you continue to fail, and continue to refuse on wholly bogus grounds, to reply fully responsively or at all to outstanding properly made, properly expressed, otherwise wholly unobjectionable and highly relevant comms to you from me and on my behalf
(d) you continue to withhold from me, on wholly bogus grounds, highly relevant material, which you have and i don't, including answers you readily have available and material you have immediately to hand and which wld cost almost nothing to supply to me 
(e) you continue to try to falsify and sanitise the record about the true nature and quality of your administration
…
4. as you know, your july 10, 2012 draft -- and this is where things presently stand -- is:-
(1) a technical document purportedly governed by a law in which i have not held (and do not hold) a qualification
(2) a document full of detail which has not been independently verified. i do not take any relevant fact in it on trust from you. if you are not going to obtain independent verification or indemnify me for any factual errors (including those caused by or avoidable by you), I see no reason to consent to it
…
(4) a document apparently generated by a swiss tax lawyer -- cron -- who is not a swiss estate administration specialist and in my view fundamentally unsuited to providing any relevant legal service to you, for reasons which will be well known and obvious to you 
(5) a document conceived, formulated, modelled, advocated, touted and proposed by a lawyer -- you -- who i regard as fundamentally unsuited to administering my friend's estate, who has committed a considerable number of inner-, back and front-office abuses of that estate lucrative to you and your firm and highly damaging to the estate, and in whom i -- logically, rationally and reasonably -- have no trust or confidence
…
6. if you do push this matter to a court application without replying fully responsively to all relevant comms, i will of course apply for (for example) a personal costs order against you 
7. of course, as soon as you deign to reply fully responsively, i will promptly and constructively consider (with appropriate advice) your responses and promptly revert
8.	wholly without prejudice to my rights and remedies against you, all of which i continue to comprehensively reserve, my present bottom-line position re your partition agreement with freyberg and forthcoming consent request -- i think i’ve spelled all this out in previous comm[unication]s but of course your style is to try to sanitise the record as if I had not:-
…
(4) i will not consent to anything in relation to which i consider i am not fully informed 
(5) i will not consent to any deal not supported by a legal opinion from at least one genuinely expert, properly instructed, fully informed expert practising in the jurisdiction of the agreement's governing law 
(6) i will not consent to anything where you have not clearly spelled out the front- and back-office effects and consequences to you, your firm, me and the estate of that consent, especially if it involves any element of personal protection for you
…”
22.	I should add that the opening paragraph of this e-mail from Mr Astor referred to a significant number of previous e-mails from him to Mrs Green, complaining that she had not responded.   In her monthly report to the beneficiaries for January 2012, Mrs Green stated
“I am conscious that the other beneficiaries do not wish me to incur further costs to the Maitland Estate in responding to the lengthy communications which I regularly receive from Richard Astor.   Given that Richard Astor has instructed Speechly Bircham to act on his behalf, I have written to Speechly Bircham indicating that I will deal with the points raised by Richard Astor as far as I am able in my Monthly Reports, and that I will only correspond with Speechly Bircham and not Richard Astor directly.”
23.	The background to these communications, as explained in the witness statement of Mr Astor in these proceedings, is that he was a good friend of Mr Maitland and during the last years of Mr Maitland’s life worked with him in seeking to investigate the misappropriations by Mr Burne from the Norman Estate.   It was he who originally instructed Me Cron in that regard on Mr Maitland’s behalf.   Mr Ham referred me to the report made by Me Cron to Mrs Green in February 2010 after she was appointed administrator in which he said:
“…The only person that can provide us with information and evidence about Anne Norman’s estate and the misappropriations committed by Francis Burne is Richard Astor, since, as friend and counsel of Peter Maitland, he has for years assisted the latter in his endeavours to disclose and prove Francis Burne’s unlawful acts. 
…
In order to defend successfully the interests of Peter Maitland’s estate against Francis Burne, a close co-operation [with] Richard Astor will be essential.”
24.	Mr Astor considers that far from consulting him properly and using him as an “essential resource”, Mrs Green has failed to provide him with basic information but has instead gone her own way running up excessive legal costs.   He is very critical of Mrs Green for reaching an agreement with Lord Freyberg at the outset of the English Proceedings to share the costs with the Maitland Estate on an equal basis when Lord Fryeburg’s interest in the Norman Estate is twice as great as that of the Maitland Estate; and further he considers that since Mrs Green acted for Lord Freyberg as well as the Maitland Estate in the English Proceedings, Lord Freyberg is a client of her firm which puts her in a situation of conflict in effectively negotiating a Partition Agreement with him.   Mr Astor has, therefore, effectively been seeking all the information which has been before Mrs Green and leading counsel advising her as administrator so that he, Mr Astor, can reach his own view as to whether the settlement proposed with Lord Freyberg is appropriate.   He says that he does not seek to block the settlement and that if he gets all the information that is necessary for him to consider the matter properly, then he will agree to a settlement which he regards as reasonable.   Indeed, it is in his interest to do so as only then will the Norman Estate be distributed with the result that he will receive his share as beneficiary of the Maitland Estate.
25.	To resume the narrative, following an e-mail sent by Mrs Green on 3 September 2012 enclosing her latest invoices, Mr Astor wrote a two-page e-mail to her which included the following paragraphs:
“2. my previous comm[unication]s to you, including those to which you have not yet deigned to reply fully responsively or at all, will have left you in absolutely no doubt about (for example):-
(1) my assertions that you have acted, are acting and will likely continue to act dishonestly, fraudulently and massively incompetently as administrator of my friend's estate  
(2) my NOT consenting to the draft partition agreement in your july 11, 2012 1240 pack, or any 604 discontinuance, absent (at a minimum) full, complete, accurate, truthful honest fiduciary-quality disclosure from you of all material facts and circumstances and all relevant material i have previously requested from you. needless to say, i have not received that disclosure or any responsive reply from you to any relevant comm[unication]
…
5. in the circumstances, it is more than appropriate that i request -- which i now do -- your formal written assurance, to be received by me within 24 hours of this email, that you will not sign, in any capacity whatever, with your conflict-client freyberg, any partition agreement or any 604 discontinuance without my express formal written consent or without the order of a genuinely fully informed court following proper proceedings of which i will have been given proper timely notice and the opportunity to participate
6. absent that assurance, i will without further notice to you:-
…
(2) consult with appropriate english lawyers on applying to the court for an injunction stopping you signing, in any capacity whatever, with your conflict-client freyberg, any partition agreement and or any 604 discontinuance”
26.	Mr Astor also himself consulted Swiss lawyers regarding the proposed Partition Agreement.   He sent Mrs Green a copy of the five-page letter of advice he received from Dr Eigenmann of MCE Avocats, dated 7 September 2012, which referred to the uncertain position under Swiss law of the capacity of the administrator of a foreign estate which has an interest in a Swiss estate.   Dr Eigenmann said:
“I consider that it is not presently clear in Swiss law whether Mr Maitland’s estate’s administrator is entitled to enter into a partition agreement, and act in (including to settle or discontinue) an article 604 action, on matters regarding Mrs Norman’s estate, in the name of each or any of Mr Maitland’s heirs without having been duly authorized by each of them.”
27.	Dr Eigenmann further set out a long list of information that he would require in order to carry out what he called “prudent due diligence” on the proposed settlement with Lord Freyberg set out in the Partition Agreement.   He said that without the opportunity to consider all the documents he would not be able to give Mr Astor useful advice as to the merits of the Partition Agreement.
28.	On 22 October 2012, Mrs Green wrote again to all the beneficiaries informing them that Lord Freyberg’s Swiss lawyer had approved the draft Partition Agreement and enclosing a final copy for their consideration.   She requested the beneficiaries’ written consent to settle with Lord Freyberg on that basis and explained that she was seeking their consent because one of the beneficiaries had indicated that he would apply to the court for an injunction if she did not obtain either their consent or a court order.   That is of course a reference to Mr Astor.   Her letter set out in some detail the basis of the Partition Agreement and the advice she had received from Me Cron to accept that settlement on behalf of the Maitland Estate.   
29.	The seven other beneficiaries signed written forms of consent but Mr Astor responded by e-mail on 3 November 2012 complaining again about the use of the monies in the Maitland Estate to discharge Mrs Green’s inappropriately incurred fees and reiterating his intention to apply for an injunction to stop her entering into the form of Partition Agreement sent with her 22 October letter.   
30.	On 2 November 2012, Dr Eigenmann, no doubt on Mr Astor’s instructions, wrote to the Swiss lawyer to Lord Freyberg informing him that Mr Astor had made clear to Mrs Green that he would definitely not consent to such a Partition Agreement and that he intended to apply “to the appropriate court” for an injunction against Mrs Green if she appeared about to enter into any such agreement “without having first obtained either Mr Astor’s generally fully informed consent following genuinely expert, fully informed legal advice, or an appropriate order of a genuinely fully informed court.”   The letter added that Mr Astor of course had no objection to a procedurally and substantively appropriate Partition Agreement.
31.	That was the background against which Mrs Green issued the present claim seeking the court’s approval of her decision to agree to the Tomlin Order and authority from the court to enter into the Partition Agreement with Lord Freyberg.
Third parties claim
32.	The third head of relief claimed can be dealt with more shortly.    An issue arose as to whether Mrs Green should take action against a number of third parties whom Mr Astor contended would be liable in connection with the misappropriations by Mr Burne from the Norman Estate.  Those third parties included Farrer & Co, who acted for Mrs Norman during her lifetime and subsequently for her executors; Christie’s and Sotheby’s, to whom Mr Burne consigned for sale certain artworks from the Norman Estate; Maître Renaud, who was involved professionally in filing tax returns for the Norman Estate; and Mr Christopher Wells, a former executor of the Norman Estate who renounced his executorship in 2008.   Based in part on advice from leading counsel, Mrs Green concluded that any claims against these third parties were either statute barred or insufficiently supported by the evidence, or that it would not be cost effective to investigate them further.   She explained this in her Monthly Reports to the beneficiaries.
33.	Mr Astor disagreed and on 28 April 2012 requested that she assign to him the Estate’s causes of action against the third parties.    Since none of the other beneficiaries had requested Mrs Green to take action against those third parties, she wrote to them all on 16 October 2012 indicating that she would agree to that assignment unless any of them objected.   In her letter she summarised the reasons why she had decided or been advised not to pursue such claims on behalf of the Estate. 
34.	However, in an e-mail dated 18 October 2012, Mr Astor wrote:
“3.	unless and until you deign to (at a minimum) discharge ALL your relevant legal functions, duties and obligations, and deal fully responsively with ALL relevant outstanding comm[unication]s to you from me and on my behalf:-
(1)   the issue of my making a genuinely fully informed decision as to whether to consider taking an assignment of anyone’s rights against anyone obviously necessarily continues to be moot …”
It was in the light of that statement that Mrs Green’s application in these proceedings also sought a direction from the court that she should not be obliged to issue proceedings against those third parties.
The proceedings
35.	The present proceedings were issued on 27 November 2012.    However, within a few weeks, and shortly before the hearing of an application by Mrs Green for an expedited hearing, Mr Astor agreed to execute a deed of assignment with Mrs Green of the rights of action against third parties.   That was set out in an undertaking by him in an order made by Norris J on 17 December 2012.   The deed of assignment in the form attached to that order was duly executed.   Accordingly, it is common ground that the costs referable to the inclusion of this head of relief, upon which no order was made, are negligible when compared with the costs occasioned by the other two heads of relief sought.
36.	At a CMC held on 4 March 2013, Peter Smith J ordered both Mrs Green and Mr Astor to provide discovery by list of “the categories of documents” in their possession, power, custody or control, with directions for inspection.   He also ordered that the parties attempt to agree a mediation to be held in early May.   This led to what on the part of Mrs Green was a substantial discovery exercise of her handling of the Maitland Estate and correspondence with Lord Freyberg’s representatives and the various parties.   
37.	A mediation was held on 10 May 2013 but was not successful.
38.	Prior to that, on 25 April 2013, Mr Astor issued an application for further specific disclosure and for a direction that the parties each be at liberty to adduce expert evidence as to Swiss law.   Peter Smith J heard that application on 2 May and, as it was expressed to me, effectively “brokered” an agreement between Mrs Green and Mr Astor, as recorded in recitals to his order, that any order granting the first and/or second head of relief sought in the claim form:
“…is to be without prejudice to any claim for negligence or other breach of duty against the Claimant issued by the 1st Defendant before 31 October 2013 or such later date as the court may approve”
and that if no such claim was issued then Mrs Green should be at liberty to distribute the Maitland Estate on the basis that no such claim exists.   The order gave the parties permission to adduce expert evidence of Swiss law in relation to the proposed Partition Agreement, with directions for the exchange of expert’s reports and an experts’ meeting, but the relevance and admissibility of such expert evidence was  reserved to the judge hearing the claim.
39.	As a result of Peter Smith J’s intervention, the issues that remained live in these proceedings were substantially narrowed.   On the basis that Mr Astor remained free to bring a claim for breach of fiduciary duty or negligence against Mrs Green as regards her conduct leading up to the Partition Agreement, Mr Ham made clear at the outset of the trial that Mr Astor would not seek to contend that the terms of the Partition Agreement itself, in the events which happened, lay outside the ambit of the reasonable decisions to which an administrator could come, i.e. it came within the second category in the classification of such applications by trustees formulated by Robert Walker J and set out in the judgment of Hart J in Public Trustee v Cooper [2001] 1 WTLR 901 at 922-924.   
40.	On that basis, there remained only the question whether, as a matter of Swiss law, Mrs Green as administrator of the Maitland Estate had power to conclude such an agreement or whether the heirs of the Maitland Estate individually had to be parties to the agreement.   This is the point that had been raised by Dr Eigenmann.    However, no objection to Mrs Green entering into a binding agreement had been taken by Lord Freyberg, who was separately advised by his own Swiss lawyer.    Moreover, the Partition Agreement, if entered into, had to be lodged with the District Court of Lausanne for ratification.   This is because, as I understand it, it constitutes a resolution of the Partition Proceedings under the Swiss Civil Code.   I therefore indicated to the parties at the outset of the trial that it is a matter for the Swiss court whether it accepts as valid the Partition Agreement entered into by Mrs Green expressly as administrator of the Maitland Estate and not by the heirs individually.   If the Swiss court would accept and ratify that agreement, I could see no purpose in this court hearing evidence of Swiss law and determining whether Mrs Green as administrator had power under Swiss law to make the agreement.   Whatever view I might reach as to the position under Swiss law obviously would not bind the Swiss court.   I therefore held that it was unnecessary, and indeed inappropriate, for this court to hear evidence as to Swiss law.
41.	On that basis, I granted the second head of relief sought in the claim form, i.e. the Partition Agreement claim.   For reasons explained in a brief, unreserved judgment, I refused to make the order sought in the first head of relief, i.e. the Tomlin Order claim.   In summary, I held that it was inappropriate for the court retrospectively to authorise an exercise by the administrator of her discretion carried out some 20 months earlier by way of  binding settlement of proceedings against a third party.   The third head of relief (the third parties claim), as explained above, had become unnecessary following the order of Norris J of 17 December 2012.
Costs: the principles
42.	The court has a wide discretion as to costs but that is subject to the rules set out in the CPR and, of course, must be exercised in accordance with established principles.
43.	CPR rule 44.2(2)(a) sets out the general rule that the unsuccessful party should be ordered to pay the costs of the successful party, but that the court may make a different order.   CPR rule 46.3 sets out a special provision regarding the award of costs in favour of a trustee or personal representative: 
“(1) This rule applies where —
(a) a person is or has been a party to any proceedings in the capacity of trustee or personal representative; and
(b) rule 44.5 does not apply.
(2) The general rule is that that person is entitled to be paid the costs of those proceedings, insofar as they are not recovered from or paid by any other person, out of the relevant trust fund or estate.
(3) Where that person is entitled to be paid any of those costs out of the fund or estate, those costs will be assessed on the indemnity basis.”
44.	This is to be read with para 1.1 of Practice Direction 46, which reads in material part:
“A trustee or personal representative is entitled to an indemnity out of the relevant trust fund or estate for costs properly incurred.  Whether costs were properly incurred depends on all the circumstances of the case including whether the trustee or personal representative (“the trustee”)- 
	(a)	obtained directions from the court before bringing or defending the proceedings;
	(b) 	acted in the interests of the fund or estate or in substance for a benefit other than that of the estate, including the trustee’s own; and
	(c) 	acted in some way unreasonably in bringing or defending, or in the conduct of, the proceedings.”
45.	These provisions apply to the costs of so-called Beddoe applications, brought to determine whether a trustee should bring or defend proceedings against third parties, as they do to an application for the court’s approval or “blessing” of the trustee’s exercise of his or her powers in taking some particularly important decision regarding the trust.
46.	In Re Buckton [1907] 2 Ch 406, Kekewich J, while noting that “costs are so largely in the discretion of the judge that…it is well nigh impossible to lay down any general rules which can be depended on to meet the ever varying circumstances of particular cases”, set out some general guidance which has frequently been applied.   He divided trust litigation into three categories: 
“In a large proportion of the summonses adjourned into Court for argument the applicants are trustees of a will or settlement who ask the Court to construe the instrument of trust for their guidance, and in order to ascertain the interests of the beneficiaries, or else ask to have some question determined which has arisen in the administration of the trusts. In cases of this character I regard the costs of all parties as necessarily incurred for the benefit of the estate, and direct them to be taxed as between solicitor and client and paid out of the estate. It is, of course, possible that trustees may come to the Court without due cause. A question of construction or of administration may be too clear for argument, or it may be the duty of trustees to inform a claimant that they must administer their trust on the footing that his claim is unfounded, and leave him to take whatever course he thinks fit. But, although I have thought it necessary sometimes to caution timid trustees against making applications which might with propriety be avoided, I act on the principle that trustees are entitled to the fullest possible protection which the Court can give them, and that I must give them credit for not applying to the Court except under advice which, though it may appear to me unsound, must not be readily treated as unwise. I cannot remember any case in which I have refused to deal with the costs of an application by trustees in the manner above mentioned.
There is a second class of cases differing in form, but not in substance, from the first. In these cases it is admitted on all hands, or it is apparent from the proceedings, that although the application is made, not by trustees (who are respondents), but by some of the beneficiaries, yet it is made by reason of some difficulty of construction, or administration, which would have justified an application by the trustees, and it is not made by them only because, for some reason or other, a different course has been deemed more convenient. To cases of this class I extend the operation of the same rule as is observed in cases of the first class. The application is necessary for the administration of the trust, and the costs of all parties are necessarily incurred for the benefit of the estate regarded as a whole.
There is yet a third class of cases differing in form and substance from the first, and in substance, though not in form, from the second. In this class the application is made by a beneficiary who makes a claim adverse to other beneficiaries, and really takes advantage of the convenient procedure by originating summons to get a question determined which, but for this procedure, would be the subject of an action commenced by writ, and would strictly fall within the description of litigation.  It is often difficult to discriminate between cases of the second and third classes, but when once convinced that I am determining rights between adverse litigants I apply the rule which ought, I think, to be rigidly enforced in adverse litigation, and order the unsuccessful party to pay the costs. Whether he ought to be ordered to pay the costs of the trustees, who are, of course, respondents, or not, is sometimes open to question, but with this possible exception the unsuccessful party bears the costs of all whom he has brought before the Court.”
47.	In McDonald v Horn [1995] 1 All ER 961, Hoffmann J (with whom Hirst and Balcombe LJJ agreed), referred to that classification and observed that it is also sometimes difficult to discriminate between the first and third categories: see at 971.
48.	In D’Abo v Paget [2000] WTLR 863, Mr Lawrence Collins QC (as he then was) held that the Re Buckton guidelines had not been superseded by the CPR but noted that they were never more than guidelines and that “a more robust attitude” to costs is now appropriate, having regard to the overriding objective under the CPR.   In Singapore Airlines Ltd v Buck Consultants Ltd [2011] EWCA Civ 1542, [2012] 2 Costs LO 132, Arden LJ (with whose judgment Pill LJ and Sir Mark Potter agreed) held (at [75]) that the categories of proceedings enumerated in Re Buckton were not closed.     And in IBM United Kingdom Pensions Trust Ltd v Metcalfe [2012] EWHC 125 (Ch), Warren J stated, at [20]:
“There is always room …for an exceptional case to be dealt with on its own facts; and, indeed, when a case does not fall neatly within any of the Buckton categories, the court must exercise its statutory jurisdiction in the way it considers best to achieve fairness and justice.”
Discussion
49.	The starting point is the special position of an application for directions by a trustee, with the particular rules and practice that apply to such proceedings: see per Lloyd LJ in Davies v Watkins [2012] EWCA Civ 1570 at [52].   Here, the fact that in the claim form itself Mrs Green sought an order that the costs should be paid by Mr Astor out of his share of the estate is in itself an indication that, for her part, she viewed this as having more the character of hostile litigation than an ordinary application for directions by a trustee or personal representative.   Indeed, if not for the determined opposition of Mr Astor, it seems to me doubtful that Mrs Green would have made any application to the court for directions at all.
50.	I consider that it is necessary to consider the three substantive heads of relief sought in the claim separately.   
51.	First, as regards approval of the Tomlin Order, since I declined to grant that head of relief, there can be no question of Mr Astor being ordered to pay the costs attributable to that part of the claim.   Ms Reed recognised that and contended that Mrs Green’s costs of that issue should be paid out of the estate.   However, Mr Ham submitted that this head of relief was not being sought for the benefit of the estate at all.   Mrs Green had not applied for the court’s approval before entering into the Tomlin Order.   It was now a “done deal” and nothing the court said on this application could affect its validity.    The only benefit of the court giving the direction applied for by Mrs Green was to protect her from a claim for breach of duty or negligence by any of the beneficiaries.   Thus this claim was being sought for her own benefit and not for the benefit of the estate.   It should never have been sought in that way in Part 64 proceedings and as Mrs Green had failed in that regard, she should bear the costs herself in the ordinary way, and pay Mr Astor’s costs.
52.	I broadly accept Mr Ham’s submission.   This head of relief was not referred to in the letter before action, and its inclusion in the claim was explained on the basis that Mr Astor was alleging that the consent of the beneficiaries given to Mrs Green to enter into that Tomlin Order had been obtained by fraud.   That is of course a very serious allegation, but in my judgment it is not appropriate to make what amounts to a retrospective Part 64 application in an attempt to dispose of it.   If Mr Astor chooses to pursue that allegation, it will be for him to commence proceedings.   I have no doubt that in adding this head of relief, Mrs Green was acting in good faith, but that does not detract from the fact that proceedings of the present nature are not suitable for determination of such an allegation and, moreover, such relief would be for the benefit of Mrs Green and not the Maitland Estate.   In  short, I consider that as regards this head of relief, applying para 1.1(b) of Practice Direction 46, falls outside the scope of the general rule applying to applications to the court by a trustee.   I therefore conclude that Mrs Green should bear her own costs referable to that issue and that she should pay that part of Mr Astor’s costs.   I discuss the question of what proportion those costs might be below.
53.	As regards the costs of the second head of relief, approval of entry into the Partition Agreement, on which the application has succeeded, Ms Reed submitted forcefully that this is an exceptional case where those costs should be paid by Mr Astor.   It is his conduct and obstruction which has caused the application to be made and considerable costs have been run up by his demands for very full disclosure.   Further, it was at Mr Astor’s insistence that expert evidence regarding Swiss law was introduced, which Mrs Green had always considered to be irrelevant to the present application.
54.	Mr Ham responded that a beneficiary has no duty to consent to action proposed by an administrator, or indeed to be polite.   That is no doubt correct, but equally, in my judgment, a beneficiary cannot expect to be immune from liability in costs irrespective of his conduct.    An order of costs is not to be applied as a sanction for the intemperate and frequently insulting language of Mr Astor’s correspondence.  But in my view, where unreasonable conduct by a beneficiary is responsible for generating substantial costs on the part of a trustee or personal representative as regards an application to the court, it is appropriate that the burden of those costs should be borne by that beneficiary and not fall on the trust or estate and thus the beneficiaries as a whole.   
55.	Mr Astor evidently lost all confidence in Mrs Green as administrator and wished to be in a position where he had before him all the information available to Mrs Green so that he could, in effect, verify all the steps she took in administration of the estate.   I have quoted above relatively short extracts from some of the very many e-mails which Mr Astor sent to Mrs Green.   It is his conduct, alone among the beneficiaries, which has led Mrs Green to seek the approval of the court to the Partition Agreement on which she had favourable advice from a Swiss lawyer, which advice she shared with the beneficiaries, and to which the other beneficiaries consented.   Further, I consider that it is the conduct of Mr Astor in the litigation which has done much to escalate the costs until, in the light of the agreement “brokered” by Peter Smith J on 2 May 2013, Mr Astor made clear by his counsel for the first time at the opening of the trial that, subject to the question of the power under Swiss law, he was not opposing Mrs Green’s exercise of her discretion in entering into the Partition Agreement.
56.	Although in form an application that comes within category (1) of Buckton, I do not think it falls neatly within Kekewich J’s tripartite classification.   It has far more the character of hostile litigation, in which the other individual beneficiaries support the position of the personal representative, who has faced sustained hostility and opposition from the one beneficiary who has opposed this claim.   Having regard to the overall justice of the case, I do not regard this as one where the costs should fall on the estate, and thus be at the expense of all the beneficiaries.   The appropriate order, in my judgment, is that the costs referable to the second head of relief should be paid by Mr Astor.   
57.	That leaves the third head of relief, concerning proceedings against third parties.   As observed above, the costs in that regard are negligible relative to the first two heads of relief.   However, I consider that such as they are, those costs should be paid by Mr Astor since he was clearly offered an assignment of the Estate’s claims against those third parties which he agreed to take only after these proceedings had been commenced.
58.	Since I have made adverse costs orders, the costs should be on the standard basis and not an indemnity basis.   The significant difference, of course, is that the standard basis requires that the costs should also be proportionate, as well as reasonable, which I consider in any event to be a salutary qualification  in view of the alarming figures for the costs of these proceedings that I have been given.
59.	It would be possible to leave to the costs judge the task of determining what costs are referable to the first head of relief (the Tomlin Order claim) as opposed to the second and third heads (the Partition Agreement and the third parties claims).   Ms Reed contends that the additional costs of inclusion of the Tomlin Order claim were relatively insignificant since full disclosure of Mrs Green’s handling of the claims brought against Mr Burne and investigations which Mrs Green conducted in that regard would have been required in any event on the Partition Agreement claim.   Mr Ham disagreed and submitted that substantial costs had been incurred as a result of inclusion of the Tomlin Order claim.   
60.	I apprehend that determination of this matter would be a very difficult task for a costs judge and likely to cause the incurral of further significant costs by way of argument.   Although the court is inevitably handicapped by the fact that neither of these claims was fully argued, I consider that after a hearing that took almost two days, I am likely to be in a better position than would be a cost judge to take an overall view.   An issue-based apportionment cannot be precise and I think it is necessary to take a broad brush approach.   In all the circumstances, I consider that 15% of the costs should be regarded as referable to the Tomlin Order claim.   Accordingly, that proportion of Mrs Green’s costs is disallowed and she is liable for that proportion of Mr Astor’s costs.   Mr Astor must pay 85% of Mrs Green’s costs.   These orders are to be set off as against each other.
61.	What the reasonable and proportionate costs actually are will be for determination by a costs judge on a detailed assessment if they are not agreed.   In that regard, I refer to the concern expressed at the outset of this judgment as to the extraordinary level of costs incurred in these proceedings.   It appears that a not insignificant measure of costs incurred on the part of Mrs Green was due to the exercise of redaction from her files of matters that are privileged on the basis that they cover legal advice she has received regarding these proceedings.   It is not very clear to me why anything other than possibly a very small part of her files contain matters concerning advice given to her regarding allegations made by Mr Astor, as opposed to advice concerning the pursuit of Mr Burne and negotiations and settlement with Lord Freyberg, which forms part of the administration of the Maitland Estate and would not appear to be privileged from the beneficiaries.   I would expect the costs judge to look carefully into any significant claim for costs on account of a process of redaction of privileged material.   Equally, as regards Mr Astor, it appears that although he instructed solicitors in these proceedings and was of course represented by leading counsel in court, he undertook much of the work of reviewing the documents himself.   His legal costs will therefore also require careful scrutiny.