Kostic v Chaplin & Ors

Costs in a contentious probate claim are governed by the ordinary civil procedure rules, including the general rule that costs follow the event. Two established probate principles nevertheless guide the discretion to make a different order.

Costs may be paid from the estate where the testator’s conduct was genuinely the cause of reasonable litigation. Moral fault is unnecessary. Alternatively, where the circumstances reasonably required investigation, the parties may be left to bear their own costs.

These principles are flexible guidelines, and departure from the general rule requires a positive justification. The appropriate order may change as litigation progresses. Once a properly informed beneficiary elects to contest a strong claim in its own financial interest, the ordinary costs consequences may apply.

The claimant succeeded in establishing that his father lacked testamentary capacity when making wills under which the first and second defendants claimed an interest for the Conservative Party Association. This judgment determined the substantial costs consequences following the merits judgment handed down on 15 October 2007.

The claimant sought his costs, partly on the indemnity basis. The first and second defendants contended that all their costs of opposing the claim should be paid from the estate. The court had to apply the general rule under the Civil Procedure Rules 1998 while considering the two established contentious-probate exceptions concerning litigation caused by the testator and circumstances reasonably requiring investigation.

1. Costs were divided into three periods. Down to 18 October 2006, the claimant’s costs and those of the first and second defendants were payable from the estate. From 19 October 2006 to 26 February 2007, there was no order as to costs. From 27 February 2007 until delivery of the merits judgment, the first and second defendants were ordered to pay the claimant’s costs on the standard basis, subject to specified exceptions.

2. The general rule in rule 44.3(2)(a) of the Civil Procedure Rules 1998 is that costs follow the event. The two principles stated in Spiers v English [1907] P 122 remain relevant guides to the discretion to make a different order. They are neither exhaustive nor rigid. A positive case must be established for departing from the general rule.

3. The first principle applies where the testator or persons interested in the residue were genuinely the cause of the litigation. “Fault” in this context does not require moral culpability. The relevant question is whether the testator’s conduct caused confusion or uncertainty which reasonably generated the dispute. The principle can apply to litigation over testamentary capacity, although modern authorities require careful scrutiny before costs are awarded from the estate.

4. The deceased’s extensive delusions and unusual behaviour were the primary cause of the capacity dispute. The Association was initially justified in investigating the claim, and its earlier state of knowledge did not displace that conclusion. Its investigative costs were therefore payable from the estate until 18 October 2006.

5. The second principle applied during the continuing investigative period ending with exchange of the psychiatric reports on 26 February 2007. By then the material evidence was substantially available and the Association elected to rely on its expert’s opinion. Thereafter it pursued ordinary adversarial litigation in its own financial interest. Its unsuccessful defence accordingly attracted the usual costs consequences.

6. The claimant’s premature summary judgment application was misconceived because a testamentary-capacity dispute of this kind required careful examination of the full factual and medical evidence. Had an earlier cut-off date been selected, the claimant would have been ordered to pay the defendants’ costs of that application.

7. The claimant’s non-Part 36 offer did not justify indemnity costs. It offered no substantive compromise and merely invited abandonment of the entire defence in return for costs from the estate. The litigation was otherwise conducted reasonably and remained within the normal category. Costs from 27 February 2007 were therefore awarded only on the standard basis.

8. The first and second defendants were also ordered to reimburse the estate for additional costs of the administrators pending suit attributable to their continued defence from 19 October 2006. No order was made on the costs of the application to cross-examine Professor Wood, and the claimant remained liable for costs thrown away by consequential amendments to the Defence.

The court had handed down its first-instance judgment on the substantive probate claim on 15 October 2007, in which the claimant succeeded. No citation for that judgment is stated. The present judgment determined the resulting costs issues.