Shepherd & Co Solicitors v Peter Ian Brealey

A professional executor cannot recover remuneration from an estate merely because the work was performed through the executor’s firm, the beneficiaries knew of the charges, or a co-executor approved the work informally. The entitlement must arise from a charging clause, the express agreement of the beneficiaries, section 29 of the Trustee Act 2000, or the court’s inherent jurisdiction.

Section 29 requires the written agreement of each other trustee. An inactive executor remains an executor unless and until the office is renounced. The inherent or Boardman jurisdiction is exceptional and must be exercised sparingly. An appellate court will not interfere with an evaluative refusal to exercise it unless there is recognised error or plain wrongness.

The appeal arose from third-party costs assessment proceedings under section 71(3) of the Solicitors Act 1974. The respondent beneficiary challenged fees charged by the appellant solicitors’ firm for work undertaken by its partner, Mr Shepherd, while acting as an executor of the estate.

Master Rowley held that the challenge was within the permitted scope identified in Tim Martin Interiors v Akin Gump LLP and that the fees for Mr Shepherd’s executor work were not recoverable. He rejected reliance on section 29 of the Trustee Act 2000 and the court’s inherent jurisdiction. The appeal concerned fresh evidence, the scope of third-party assessment, statutory remuneration, the Boardman jurisdiction, and whether only profit rather than service costs should be disallowed.

1. Fresh evidence. Mr Smyth’s evidence was admitted under the Ladd v Marshall criteria, but Mr Hayward’s statement was excluded because it could reasonably have been obtained for the hearing below. Neither materially altered the factual position.
2. Scope of assessment. Tim Martin Interiors v Akin Gump LLP governed the appeal. A third-party beneficiary may challenge costs outside the estate’s liability, including work for which the estate was not liable to reimburse the executors. The distinction between Mr Shepherd acting as executor and acting as solicitor-administrator was legally real.
3. The fact that the firm, rather than Mr Shepherd personally, rendered the charges did not create an independent entitlement. Any entitlement of the firm depended on Mr Shepherd’s entitlement.
4. Section 29. Mr Smyth was appointed an executor by the will. An executor derives title from the will and remains an executor unless a statutory event ending the executorship occurs. Inactivity, failure to prove the will, or later renunciation did not remove his status at the material time. Section 29 therefore required his written agreement as well as Mr Hayward’s. No sufficient written approval was shown.
5. Boardman jurisdiction. The inherent jurisdiction to authorise remuneration must be exercised sparingly and only in exceptional circumstances. Re Duke of Norfolk’s Settlement Trusts concerned the existence and scope of the jurisdiction where a trust instrument provided inadequate remuneration; it did not displace the exceptionality requirement. The absence of adequate evidence was independently fatal, and the first-instance evaluative decision was not plainly wrong.
6. Ground 4. The proposed distinction between profit and the cost of providing Mr Shepherd’s services was a new point requiring evidence. It also failed substantively: the sums were firm fees, not expenses properly incurred by Mr Shepherd, and the defects under section 29 and the Boardman jurisdiction applied equally to every element.
7. The appeal was dismissed and remitted to Master Rowley for the next stage of detailed assessment to identify the fees representing Mr Shepherd’s executor services.

• High Court (King’s Bench Division) [2022] EWHC 3229 (KB) : appeal from Master Rowley’s judgment dated 29 November 2021 dismissed. The matter was remitted for further detailed assessment.
• Costs Court: Master Rowley’s earlier ruling dated 7 June 2021 applied the blue-pencil approach in Tim Martin Interiors v Akin Gump LLP to the section 71(3) assessment. That ruling was not appealed.