Grender & Ors v Dresden & Ors

Trustees and other fiduciaries are generally entitled to an indemnity from trust assets for costs properly incurred in administering or seeking guidance on the trust. This depends on maintaining neutrality between beneficiaries and using the expenditure for the trust’s benefit, rather than for personal purposes.

The usual rule that trust-construction costs come from the fund may be displaced where a party’s conduct unnecessarily enlarges the proceedings. The court must consider all the circumstances and may make a proportionate costs order.

This first-instance judgment reconsidered provisional costs orders made after an earlier judgment concerning the construction and administration of a trust deed affecting estate residents.

The court considered the claimants’ entitlement to costs from trust or company assets, the costs of a representative defendant and individual defendants, the appropriate basis and apportionment of costs, and whether summary assessment or an interim payment should be ordered.

1. Trustees and other fiduciaries are entitled to an indemnity for properly incurred costs only while preserving neutrality between beneficiaries and acting for the benefit of the trust fund. The claimants’ costs were recoverable from trust or company assets.
2. The representative defendant was entitled to costs on the same basis. The individual defendants were not entitled to costs from the fund merely because other residents might benefit.
3. The usual rule for trust-administration proceedings may be displaced where conduct unnecessarily increases expense. The Dresdens were ordered to pay 40% of the claimants’ costs, assessed on the indemnity basis, because they pursued irrelevant issues and their conduct was disgraceful.
4. Summary assessment was declined where it would affect the wider detailed assessment. Detailed assessment was directed, and an interim payment of £17,500 was ordered.

This was a first-instance costs judgment following an earlier judgment in the same proceedings. No appellate decision is stated.