Ali v Nazma & Ors

An indemnity costs order reflects the court’s disapproval of the paying party’s conduct before or during proceedings. It is appropriate where the paying party, despite accepting a clear duty and having delayed compliance, pursues an appeal of dubious merit and thereby causes the other parties further expense, delay and inconvenience. The order may protect the receiving parties from bearing any of the costs reasonably incurred in meeting that appeal.

The judgment concerned the costs of an unsuccessful appeal by an executor. The substantive appeal had challenged an order requiring him to exhibit a true inventory of the estate and render a true account of its administration. The appeal was dismissed in [2020] EWHC 213 (Fam).

The appellant accepted that costs should follow the event, but disputed indemnity assessment and the amount claimed. The respondents sought indemnity costs under Civil Procedure Rules 1998, rule 44.2(5), relying on the executor’s prolonged failure to account and his decision to pursue an appeal despite accepting the duty.

1. The appellant was ordered to pay the respondents’ costs on the indemnity basis. The sum awarded was £27,818.92 plus VAT, namely £33,328.50 inclusive of VAT, payable within 28 days.
2. An indemnity costs order is made to reflect the court’s disapproval of the paying party’s conduct before or during proceedings under Civil Procedure Rules 1998, rule 44.2(5).
3. The appellant was an executor subject to the express statutory obligation in Administration of Estates Act 1925, section 25(b), to render an inventory and account when required by the court. He had also sworn, when applying for probate, to produce an account when required.
4. Instead of accepting an order requiring him to perform a duty which he accepted, had promised to perform and had delayed for more than a decade, the appellant pursued an appeal of dubious merit. That conduct imposed further expense, delay and inconvenience on the beneficiaries.
5. The circumstances constituted a clear case for indemnity costs. The respondents should not be at risk of bearing any of the costs reasonably incurred in meeting the appeal. The court was not persuaded that the claimed heads of costs required the reductions advanced by the appellant.

The judgment determined costs following the appellant’s unsuccessful appeal against the District Registrar’s order of 7 August 2019. The substantive appeal was dismissed by the same court in [2020] EWHC 213 (Fam).