Griffin v Higgs & Ors

On an appeal from a costs order, the appellate court should intervene only for an error of principle, failure to consider a material matter, consideration of an irrelevant matter, or a decision outside the generous ambit of reasonable disagreement. Success is assessed by common sense and by reference to the litigation as a whole. A party who succeeds overall is not ordinarily deprived of costs merely because it fails on some inter-connected issues. A trustee or personal representative is entitled to an indemnity for costs properly incurred, but may lose it if resistance to removal was unreasonable. Reasonable costs incurred after the representative adopts a neutral position will generally remain recoverable from the estate where other parties continue the litigation.

The claimant sought the replacement of the executors of her late mother’s estate by an independent administrator. The Deputy Master ordered their replacement and appointed a different solicitor from the one sought by the claimant. He ordered costs against the defendants for two periods and denied the executors an indemnity from the estate.

The beneficiaries and the executors appealed. The issues included who had succeeded, whether the claimant’s failure on numerous allegations required an issue-based or conduct-based costs adjustment, whether beneficiaries could be ordered to pay costs incurred before joinder, and whether the executors were entitled to an indemnity after adopting a neutral stance.

The appeals by Con and Con’s Children were dismissed. The executors’ appeal was allowed only in relation to the second period; otherwise the appeals were dismissed. Consequential orders and appeal costs were reserved for later submissions.

1. Appellate restraint. Under CPR r.55.21(3), an appeal court may intervene where a discretionary costs decision is wrong or unjust because of serious procedural irregularity. A decision is wrong only for an error of principle, failure to consider a material matter, consideration of an irrelevant matter, or a conclusion outside the generous ambit of reasonable disagreement.
2. Success and issue-based costs. Success is a fact-specific, common-sense assessment of the litigation as a whole. The Deputy Master was entitled to treat Jane as successful because the executors were removed and the replacement administrator was permitted to investigate all the issues. The fact that most allegations did not independently justify replacement did not determine the costs outcome. The evidence and submissions were inter-connected, and conduct had been considered.
3. Pre-joinder costs. Once joined, Con and Con’s Children could be ordered to pay costs incurred before joinder. Their opposition to removal materially contributed to the claim being defended.
4. Executors’ indemnity. CPR r.46.3 and Practice Direction 46 establish an entitlement to an indemnity for costs properly incurred. The applicable question is reasonableness, not a heightened test of wholly indefensible conduct. The executors unreasonably resisted removal during the first period despite plain conflicts of interest, so they were properly deprived of their indemnity and ordered to pay Jane’s costs.
5. Second period. After adopting a neutral stance, the executors were no longer resisting removal. Costs reasonably incurred thereafter because Con and Con’s Children continued to defend the claim were not attributable to the earlier unreasonable resistance. The executors were therefore entitled to recover those costs from the estate, assessed on the indemnity basis, insofar as they were not recovered from or paid by the other beneficiaries. Costs not reasonably incurred remained open to challenge on assessment.

• High Court (Chancery Division): On 3 October 2018, Stephen Jourdan QC sitting as a High Court Judge dismissed the appeals by Con and Con’s Children, allowed the executors’ appeal concerning the second-period indemnity, and otherwise dismissed the appeals from the Deputy Master’s Costs Order dated 30 November 2017.
• Deputy Master Linwood: On 30 November 2017, ordered the defendants to pay costs in the specified periods and denied the executors an indemnity from the estate. His Main Judgment replacing the executors was dated 15 November 2017 and was not appealed.