England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
CHANCERY DIVISION
LEEDS DISTRICT REGISTRY
(BLACKBURNE J)
Application of Cmts for PTA

		Royal Courts of Justice Strand London WC2 Tuesday 16th July 2002

Tuesday 16th July 2002

1. LORD JUSTICE ALDOUS: Mr Clegg and Miss Diveney, who I will call the appellants, bring the present application for permission to appeal the order of Blackburne J dated 17th May 2001 which dismissed their appeal against the order of His Honour Judge Walker dated 17th November 2000. They have appeared before me by way of the video link from Huddersfield.
2. The applicants challenge that part of the order which required the estate of the deceased to bear half the defendant's solicitor's bill which had been presented for assessment. The appellants' notice was filed on 6th June. The order being appealed is 17th May. Thus the notice was out of time by a short period, but that is not something I would wish to hold against them.
3. The case is about a will. In that will the testatrix left her estate to two named beneficiaries in an amount of £5,000 each, and then to residuary beneficiaries, of whom the appellants were two, and also the executrix, a Miss Guarino. The only substantial asset in the estate was a house. The house was valued at between £17,000 and £28,000. In the original proceedings brought before His Honour Judge Walker on 4th April, the appellants alleged that the respondent, who was the executrix, had attempted to sell the house at a serious undervalue in order to obtain a quick sale and some cash. That appeared to be correct, as, two years later, even though the property had deteriorated and the neighbourhood had not improved, the property was sold at the figure which Rothwells, a firm of estate agents, were asking when they first put it on the market.
4. When the applicants became aware of the actions that the executrix was seeking to take, they wrote a long letter to the solicitors who were acting, in which their complaints were set out. Correspondence ensued.
5. The matter came for trial in April 2000. The result was that the appellants succeeded. The court ordered the respondent to account to the estate in the sum of £3,200. That figure represented £3,000 as the shortfall between the price at which the property had been sold and the price at which the court considered it ought to have been sold. The £200 related to the court's assessment of the value of other items of the estate that had not been fully accounted for. The court also ordered that the appellants should have their costs of the action, to be assessed at £1,000.
6. One of the matters that remained outstanding was the question of costs of the administration of the estate. It was that issue which came before the court on 17th November 2000. The court on 17th November ordered the deceased's estate should bear half the costs of the defendant's solicitor's bill, that is the solicitor who was administering the estate when presented for assessment, such assessment to be carried out by District Judge Harrison.
7. In his judgment of 17th November, His Honour Judge Walker gave a number of reasons. One of them was:

"... the correspondence was no doubt perfectly accurate in accordance with instructions the solicitor received but was in any view inflammatory, unwise, and did not conduce to quick settlement of any dispute there might be. ... ...the action in person was bedevilled by all sorts of allegations which did not really have an enormous amount to do with the main ground of complaint, which was that Mrs Guarino was trying to sell the property at an undervalue."

8. The appeal on 17th May 2001 was not against the assessment by District Judge Harrison. The appeal was brought against the order of His Honour Deputy Judge Walker directing that half of the costs incurred by the solicitors as presented for the assessment should be debited to the estate. The appellants contended, and contended before me, that all the costs, save for the fixed costs, should be borne by the respondents: in effect that those costs were due to her impropriety.
9. Blackburne J, in his judgment, said this:

"... it is difficult from that to understand precisely what it was that led the learned judge to the conclusion that he reached. There is some suggestion from the note that the judge took the view that the conduct of Mr Clegg and Miss Diveney was inflammatory and unwise, but beyond that it is not easy to see what the reasons were for exercising the discretion which he had in respect of how much he would allow to be debited to the estate of the actual administration costs which had been incurred by Mrs Guarino's two firms of solicitors."

10. Blackburne J went on to say:

"It is apparent from the order that Judge Walker made that, having conducted the trial, tried the issue over a two day period in early April 2000 and obviously having a fairly clear view of the merits on that occasion and of the course of events which led to this unhappy dispute, he plainly took the view that there was substance in the suggestion that a substantial part of the costs ... which were submitted should be borne by the estate. ...

...

It is perfectly plain that costs have been properly incurred by the solicitors for Mrs Guarino in the administration - this long drawn out administration. I have seen some correspondence with threats of matters being reported to the police which, as it seems to me, lends some substance to the judge's apparent view that some of the claimants' conduct was inflammatory, but it is quite impossible on this appeal for me to say exactly what conduct was justified and what was not.

...

I emphasise once more that only a relatively small proportion of the overall administration costs claimed by the two firms of solicitors have been charged to the estate as a result of Judge Walker's order.

In all the circumstances, therefore, subject to one matter, I propose to dismiss the appeal."

11. The appellants' proposed grounds of appeal are set out in their notice. However, before me, Mr Clegg drew attention to that part of His Honour Judge Walker's judgment which appears at page 3 line 7. There he said this:

"But the contention of the claimants that I should disallow virtually the whole of the costs on the basis that, had she been sensible from the beginning, this action would never have been necessary, I also disallow for this reason, that it is virtually impossible, chicken and egg situation, to try to pursue through this correspondence what sparked off what."

12. Mr Clegg told me today that he and Miss Diveney were not in a position of power. They only had the power of complaint. Their complaints were reasonable and they should not be penalised in costs, whereas the position of the respondent was one of a person in breach of trust. Had she, as a trustee, acted correctly then they would have not had to consult solicitors and the proceedings would never have taken place. He emphasised that the solicitors who acted upon the administration of the estate were, in his view, mutually responsible for their failures that happened and the costs. He submitted that they had acted improperly, thus the appellants should not be responsible for their costs. He also emphasised that the appellant had not acted in an inflammatory way. They had been in a position of persons seeking to impose upon a trustee the duties that the trustee had. In those circumstances it was quite wrong that they should be in any way responsible for the costs.
13. This Court's jurisdiction to give permission to appeal is governed by CPR 52.13. That states:

"The Court of Appeal will not give permission unless it considers that---

(a) the appeal will raise an important point of principle or practice; or

(b) there is some other compelling reason for the Court of Appeal to hear it."

14. I am conscious in this case that costs are always a difficult matter to decide. They are, however, within the discretion of a judge. In the present case it might be that, on an analysis of facts and of the submissions that have been placed before me, this court could have arrived at a different decision. However, as I have said, this is an application for a second appeal and this Court's jurisdiction is limited. Mr Clegg says that the important point of principle which should be entertained by this Court is that the judge should have taken into account the fact that the estate needed protection not the trustee: it is the trustee which protects the estate.
15. In my view that is a point of principle which is well established. The issue in this case is the exercise of the discretion by the judge in awarding costs. That is a matter which does not raise an important point of principle or practice. It is the sort of thing which happens day in day out, up and down the country. There is no compelling reason for the Court of Appeal to hear this appeal. Thus, although his case could arguably be one which might have succeeded before a different judge, it is not one which this Court should entertain. The application is therefore dismissed.