Joanna Claire Daley v Susan Amanda Hodges

Where substituted personal representatives incur costs in an application for directions, those costs may ordinarily be paid from the estate. The court may nevertheless order that different proportions be borne from the beneficiaries’ respective shares.

The assessment is fact-sensitive and must reflect all the circumstances, particularly the parties’ conduct, the issues raised, the manner in which the application was pursued, and the extent to which a party increased the representatives’ work and costs. A simple equal division is not required where it would be unfair or fail to reflect that conduct.

The claimant and defendant were equal residuary beneficiaries of their late mother’s estate. Substituted personal representatives had been appointed by consent and were entitled to recover their costs from the estate.

The representatives later applied for directions concerning chattels, the rule against double portions, lifetime payments, sums taken from the deceased’s bank account, and a deed of variation. The issue before the court was whether the costs of that application should be apportioned unequally between the beneficiaries by deduction from their respective shares.

1. Costs discretion. CPR Part 44 provided the applicable framework. Under CPR 44.2, the court had a broad discretion as to whether costs were payable, their amount and timing. The court had regard to all the circumstances, including the parties’ conduct, partial success, settlement offers, the reasonableness of raising or pursuing issues, and the manner in which the case was conducted.
2. Assessment of conduct. Costs could not fairly be divided by counting pages in the bundles or by adopting a party’s subjective calculation. The court had to form an overall impression from the evidence, correspondence and the parties’ positions.
3. Application to the beneficiaries. The substituted personal representatives had no practical alternative to applying for directions and had acted properly in difficult circumstances. Their entitlement to costs from the estate was not in issue. The relevant question was the fair allocation of those costs between the beneficiaries.
4. The claimant had materially increased the work required in relation to the application, particularly through the number and breadth of the issues raised, including disputes concerning chattels and gifts. The defendant had also conducted the matter inefficiently and had not assisted herself, but the claimant’s contribution to the additional work was greater.
5. The court therefore ordered that 65% of the substituted personal representatives’ assessed costs be paid from the claimant’s share of the estate and 35% from the defendant’s share. The approximate amounts were £35,936 and £19,350 respectively.