Culliford & Anor v Thorpe

Where a party has obtained an order for costs subject to detailed assessment, the court retains jurisdiction to order a payment on account even after the order has been drawn up and sealed. The absence of a request at the original hearing is relevant but does not, by itself, constitute good reason to refuse relief. The court must exercise its discretion on the circumstances existing when the application is made. Personal representatives who conduct litigation in their own interests, rather than neutrally for the estate, may be treated as ordinary unsuccessful litigants. The so-called probate rule is narrow and does not generally apply to adversarial proprietary disputes. An approved costs budget is an appropriate starting point, but the payment ordered may be lower than the budget.

The claimants, acting as personal representatives and beneficiaries of an estate, had brought possession proceedings concerning a house. The defendant successfully counterclaimed on the basis of a proprietary estoppel equity. The claimants were ordered to pay the defendant’s costs, subject to detailed assessment, but the order made no provision for a payment on account.

After the order had been sealed, the defendant applied for such a payment under CPR r 44.2(8). The claimants argued that the court lacked jurisdiction to entertain the application until detailed assessment proceedings had begun, and relied on their fiduciary capacity and the absence of estate funds. The issues were whether the application was jurisdictionally permissible, whether there was good reason to refuse it, and what sum should be ordered.

1. Jurisdiction. The court had jurisdiction to make a further order for payment on account after the costs order had been drawn up and sealed. Ashman v Thomas [2016] EWHC 1810 (Ch) concerned the court’s power to revisit an order before it was entered under the so-called Barrell jurisdiction. It did not decide that a later application was barred. Nothing in the rules required the receiving party to apply only at the original hearing or after detailed assessment proceedings had commenced.
2. Discretion. The omission to request a payment on account was relevant but was not, by itself, a good reason for refusing an order. The court had to assess the circumstances at the time of the application. Applying Mars UK Ltd v Teknowledge Ltd [2000] FSR 138, a successful party would ordinarily receive a reasonable sum on account pending assessment.
3. Capacity of the claimants. Although personal representatives generally may indemnify themselves from the estate for properly incurred litigation costs under CPR r 46.3(2) and Practice Direction 46, paragraph 1.1, the claimants had actively resisted the counterclaim for their own benefit. They were therefore not entitled to be treated as neutral fiduciaries for the purpose of the application. The reasoning of Ward LJ in Shovelar v Lane [2011] EWCA Civ 802, particularly [48], was apposite.
4. Probate rule. The principles described in Spiers v English [1907] P 122 were confined to their proper scope. They did not apply to this ordinary adversarial proprietary estoppel dispute.
5. Amount and order. The approved costs budget of £45,580 was the obvious starting point. In the circumstances, £30,000 was reasonable. The sum was payable within 28 days. The claimants were also provisionally ordered to pay the defendant’s costs of the application, subject to detailed assessment.