Brian Richard Bowser v Julie Ann Smith & Anor

A personal representative is entitled to an estate indemnity only for expenses properly incurred while acting on behalf of the estate. Unreasonable conduct can defeat that indemnity, although a mere mistake is insufficient. A claimant under the Inheritance (Provision for Family and Dependants) Act 1975 is not automatically disqualified from acting as personal representative, but the capacities must remain distinct.

Hostile removal proceedings should be a last resort, preceded by proper attempts at resolution and careful consideration of Beddoe relief. Where parties agree that unresolved costs will be determined on paper, an appellate court should interfere only for manifest injustice: see [2004] C.P. Rep 2.

The appeal concerned a costs order made by Bacon J on 24 November 2022 after proceedings brought by Brian Bowser, one of two executors of the estate of Ian John Smith, seeking Julie Smith’s removal and sole control of the estate.

At a hearing on 3 November 2022, the parties agreed that both executors should be removed and replaced by an independent administrator. They left costs unresolved and agreed that the judge should determine them on written submissions. Bacon J ordered Mr Bowser to pay Julie’s costs, denied him an indemnity from the estate, and provided for Julie’s unpaid costs to be recovered from the estate.

The Court of Appeal considered whether the paper procedure was unfair, whether the costs discretion had been wrongly exercised, whether Mr Bowser was substantively unsuccessful, and whether fresh evidence should be admitted.

Sir Launcelot Henderson gave the leading judgment. Males LJ and Falk LJ agreed. The appeal was dismissed, and Julie’s fresh-evidence application was granted.

1. The costs order fell within the judge’s wide discretion. Under the Trustee Act 2000, as applied to personal representatives, the relevant questions are whether the expenses were properly incurred and whether they were incurred when acting on behalf of the estate. Unreasonable conduct may amount to misconduct for this purpose: Price v Saundry [2019] EWCA Civ 2261.
2. There is no automatic rule requiring a person who intends to claim under the Inheritance (Provision for Family and Dependants) Act 1975 to cease acting as personal representative. The claimant and the beneficiaries share an interest in proper administration and the maximisation of estate assets, although the two capacities must be kept distinct.
3. The guidance in BCT Software Solutions Limited v C Brewer & Sons Limited [2004] C.P. Rep 2 applied. Where substantive issues have been compromised but costs remain unresolved, the court may determine costs on a broad-brush basis if the parties agree to that course. An appeal should succeed only if the resulting order is manifestly unjust.
4. Mr Bowser agreed to the paper procedure and could not later complain that an oral hearing, further evidence or findings on disputed facts were required. The judge was entitled to rely on the written submissions, procedural history and correspondence.
5. Proceedings to remove a co-executor should ordinarily be a last resort. Mr Bowser acted with inappropriate haste, without proper pre-action conduct, and under the misconception that Julie’s prospective family-provision claim created an irretrievable conflict. He had not obtained Beddoe relief and therefore proceeded at his own risk as to costs. His conduct did not constitute a reasonable and proper exercise of his powers.
6. The judge was entitled to regard Mr Bowser as substantively unsuccessful because he had sought Julie’s removal while remaining sole executor, whereas the agreed result removed both executors and appointed an independent administrator. The resulting orders as to costs and estate indemnity disclosed no error of law or manifest injustice.
7. The fresh evidence satisfied the criteria in Ladd v Marshall [1954] 1 WLR 1489. It could not reasonably have been obtained earlier, might materially influence the result, and was apparently credible. The evidence also provided further support for upholding the costs order.

The court encouraged mediation to resolve the outstanding family-provision and estate issues.

• Court of Appeal (Civil Division) In [2023] EWCA Civ 923, the appeal was dismissed. Fresh evidence was admitted.
• High Court of Justice, Chancery Division On 3 November 2022, Bacon J made a consent order removing both executors and appointing an independent administrator. On 24 November 2022, she ordered Mr Bowser to pay Julie’s costs, denied him an estate indemnity, and provided for Julie’s unpaid costs to be recovered from the estate.