Hutchinson v Grant

A compromise of substantive relief does not settle proceedings where the parties have not agreed how costs are to be dealt with, unless the compromise expressly covers costs. The underlying applications therefore remain live. A judge may continue to determine the unresolved issues, including costs. Procedural unfairness may arise if a party is led to believe that the court will give effect to a concluded agreement and the judge later changes course. However, where the judge clearly explains that the proceedings will continue and identifies the issues to be decided, a party who leaves court cannot rely on a supposed contrary expectation.

Following their father’s death, the parties became joint administrators of his estate. Each brought an application under Administration of Estates Act 1985, section 50, seeking the other’s removal. During the hearing, they agreed in principle that both should be replaced by an independent solicitor, but they did not agree the treatment of costs.

The judge continued to hear the applications, decided that Mr Grant should be removed, and dismissed his counterclaim. After refusing an adjournment, Mr Grant left court. Permission to appeal was limited to whether there had been an agreement for the removal of both administrators which the judge should have honoured.

1. The appeal was dismissed unanimously. The issue was whether an agreement in principle to replace both administrators prevented the judge from deciding whether either should remain in office.
2. The court applied the principle stated in BCT Software Solutions Ltd v C Brewer & Sons Ltd [2004] CPR 2: except in straightforward compromises, a dispute is not settled if costs remain unresolved, unless the compromise covers costs. Since the parties had not agreed the costs of the applications, the applications under section 50 of the Administration of Estates Act 1985 remained live.
3. Procedural unfairness could have arisen if the judge had led a party to believe that both administrators would necessarily be replaced and had then gone back on that understanding. That did not occur. The judge’s preliminary judgment made clear that he would decide whether Mrs Hutchinson remained as administrator or was replaced by Mr Blackburn, as well as the costs.
4. The judge had not determined or struck out the wider complaints concerning maladministration. Those claims were expressly preserved. His refusal to adjourn and his continuation of the hearing involved no procedural error. Mr Grant chose to leave after being told clearly how the proceedings would continue. The operative order was that the application be refused.

• Court of Appeal (Civil Division): dismissed the appeal from the decision of HHJ Kaye QC.
• Newcastle-upon-Tyne Registry: continued the section 50 applications after the parties failed to agree costs, removed Mr Grant as administrator, and dismissed his counterclaim for Mrs Hutchinson’s removal.