Walters & Anor v Smee & Anor

In probate proceedings, the usual rule that the successful party receives its costs may be displaced where the litigation was caused by the deceased or where investigation of the will was reasonably required. Those exceptions do not apply once the litigation has become ordinary hostile litigation in which a party elects to defend its financial interests and advances allegations that are central to the dispute. Where that party loses, the normal costs consequences ordinarily follow. The court may consider whether different principles apply at different stages, but must assess the litigation as a whole. A successful party may recover its costs where it has vindicated itself on allegations forming the factual foundation of the capacity issue.

The decision concerned the costs of probate proceedings in which the court had rejected a 2004 will and admitted an earlier 1998 will to probate. The Walters, executors and residuary beneficiaries under the earlier will, had succeeded against the Smees, who were executors and beneficiaries under the later will.

The Smees argued that costs should come from the estate, that there should be no order for costs because the validity of the later will required investigation, or that any order should be limited proportionately. The central issue was whether the probate exceptions to the ordinary costs rule applied to the conduct and course of this litigation.

1. Costs discretion. The Walters had won the probate proceedings. The ordinary rule recognised by CPR 44.3 was that they should receive their costs, subject to the court’s discretion.
2. Probate exceptions. The court considered the recognised exceptions under which costs may come from the estate where the deceased’s conduct caused the litigation, or where the validity of a will required investigation. The court applied the guidance in Kostic v Chaplin & Others [2007] EWHC 2909 (Ch), including that probate litigation may become ordinary hostile litigation, from which point the normal rule applies (para [8]).
3. Character of the litigation. Although the Smees had acted in good faith and had understandable reasons for defending the 2004 will, they had elected to contest the proceedings, pursued extensive allegations against the Walters, resisted expert evidence initially, made an unsuccessful strike-out application, and conducted the case as ordinary contested litigation. The court rejected the contention that they were merely reserving their position while making inquiries. The allegations went to the heart of the capacity issue, and the Walters had been vindicated on them (paras [19]–[24]).
4. The court declined to divide the litigation into stages for costs purposes. It also rejected reliance on criticisms of the will-drafter as a reason to attribute the litigation to the deceased, and found that further inquiries were unlikely to have changed the Smees’ approach (paras [24], [26]–[27]).
5. The appropriate order was that the Smees pay the Walters’ costs of the claim and counterclaim on the standard basis. The conclusion was reinforced by the court’s view that, had it been necessary to decide the proprietary estoppel claim, the Walters would also have succeeded (paras [29]–[30]).

The judgment determined costs following the judge’s earlier judgment delivered on 25 July in the same proceedings, which rejected the 2004 will and admitted the 1998 will to probate. No separate appellate history is stated.