Varmer v Mason

At first instance in probate proceedings, costs are discretionary under CPR 44.3, read with the residual principles of the old probate practice. The ordinary event-based approach does not exhaust the inquiry. Costs may come from the estate where the will-maker or residuary beneficiaries caused the litigation, or where the circumstances reasonably led to an investigation. Modern authority has narrowed rather than extended that exception. An appellate court remains slow to interfere with a discretionary costs order, even where the first-instance judge may not have been given the correct rule. A permission application may properly be adjourned to allow a litigant to obtain advice and decide whether to pursue or withdraw it.

The applicant sought permission to appeal an order made by HHJ McCahill QC after a preliminary issue in contested probate proceedings. The issue was whether the deceased, a Norwegian citizen who had lived largely in England, was domiciled in Norway. The applicant relied on the alleged Norwegian domicile to contend that Norwegian law applied to alterations to the deceased’s later will.

The applicant lost the preliminary issue and was ordered to pay the claimant’s costs. The central question was whether the costs should instead be paid from the estate, having regard to the residual probate costs practice and the limited argument presented at first instance.

1. Application adjourned. Ward LJ neither finally granted nor refused permission to appeal. The application was adjourned for restoration in January 2012, so that the applicant could obtain a transcript, take advice and decide whether to restore or withdraw the application.
2. Costs are a matter for the discretion of the first-instance court. Under CPR 44.3, the general rule permits the unsuccessful party to be ordered to pay costs, but the court may make a different order. The qualification that the general rule does not necessarily apply to probate proceedings in the Court of Appeal did not apply at first instance.
3. At first instance, the residual principles of the old probate practice remained relevant. They are illustrated by Mitchell & Mitchell v Gard & Kingwell [1863] 3 Sw & Tr 275 and Spiers v English [1907] P 122. Costs may come from the estate where the will-maker or persons interested in the residue caused the litigation. They may also be left with those who incurred them where the circumstances reasonably led to an investigation.
4. The modern trend has been to narrow rather than extend the circumstances in which the old Chancery rule operates, as noted by Henderson J in Kostic v Chaplin [2007] EWHC 2909.
5. Although there was an arguable basis for saying that the first-instance judge had not been directed to the correct costs principles, appellate interference with a discretionary costs order is difficult. The judge had been entitled to consider the adversarial nature of the litigation and the clear outcome, while the applicant’s bona fides and the possibility of ordering costs out of the estate or making no order remained relevant considerations.

• Court of Appeal (Civil Division): Ward LJ adjourned the application for permission to appeal, to be restored in January 2012.
• Chancery Division, Bristol District Registry: HHJ McCahill QC determined the preliminary domicile issue against the applicant and ordered her to pay the claimant’s costs.