Julian Lindsay Fernandez v Leessa Karen Fernandez & Anor

Following an unsuccessful appeal, the court may order the unsuccessful party to pay the successful party’s costs. A failure to comply with a costs practice direction should be addressed proportionately and does not ordinarily justify depriving an otherwise entitled party of all costs. Indemnity costs may be appropriate where conduct is out of the norm, including unreasonable frustration of an obviously appropriate mediation and pursuit of issues outside the pleaded dispute. Where costs are subject to detailed assessment, a payment on account is generally required unless there is good reason not to order one. Interest may be awarded on costs from the dates they were incurred or paid. A personal representative is not entitled to an indemnity from an estate or trust fund for costs of hostile litigation conducted solely in personal interests.

The appellant appealed against an order of District Judge Wales removing him as executor of his parents’ estates and of a lifetime trust. The appeal was dismissed in the court’s substantive judgment, [2025] EWHC 2373 (Ch). This judgment dealt with consequential matters arising from that dismissal.

The issues were the incidence and basis of costs, whether costs should be summarily or carefully assessed, payment on account, interest on costs, and the appellant’s entitlement to an indemnity from the estates and trust fund.

1. Incidence of costs. Costs were discretionary under section 51(1) of the Senior Courts Act 1981 and CPR rule 44.2(1). The respondents were the successful parties because the appeal had failed. The general rule in CPR rule 44.2(2)(a) therefore applied, and there was no sufficient reason to depart from it.
2. A failure to serve a costs statement within the period required by CPR Practice Direction 44 did not deprive the successful party of costs. The court should take the breach into account and respond proportionately. Any prejudice was minimal, and summary assessment was not in any event appropriate. The appellant’s submission that the breach barred recovery altogether was rejected, following Macdonald v Taree Holdings Ltd [2001] 1 Costs LR 147, as subsequently followed in Kingsley v Orban [2014] EWHC 2991 (Ch) and Whittaker v Bertha UK Ltd [2023] EWHC 2554 (Ch).
3. Indemnity costs. Permission to appeal showed only that the appeal had a real prospect of success or another compelling reason, and did not establish that the appellant’s conduct was within the norm. The appellant had unreasonably delayed and frustrated mediation, and had pursued issues which were not pleaded and were outside the issue remaining for determination. That conduct justified indemnity costs. Unreasonable failure to mediate is a factor, not an automatic sanction, but may justify indemnity costs where the conduct frustrates an obviously appropriate mediation: Gore v Naheed [2017] 3 Costs LR 509; Thakkar v Patel [2017] 2 Costs LR 233.
4. The costs were to be subject to detailed assessment because significant challenges to the claimed sums could not be resolved summarily. A payment on account was required by CPR rule 44.2(8). Applying Excalibur Ventures LLC v Texas Keystone Inc [2015] EWHC 566 (Comm), the court ordered payment of £38,832, representing 50 per cent of the respondents’ claimed costs.
5. Interest was awarded at 2 per cent above base rate from the dates on which the respondents paid their legal invoices until judgment, consistently with the approach described in Involnert Ltd v Aprilgrange Ltd [2015] EWHC 2834 (Comm).
6. Under section 31(1) of the Trustee Act 2000, the appellant was not entitled to an indemnity for his own appeal costs or the costs liability owed to the respondents. The appeal had been conducted entirely in his own interests and the costs were not properly incurred for the purposes of the estates or trust.

• High Court (Business and Property Courts): The appeal against District Judge Wales’s order of 3 December 2024 was dismissed in the substantive judgment, [2025] EWHC 2373 (Ch). This judgment determined the consequential costs, interest and indemnity issues.
• District Judge Wales: The appellant was removed as executor of the estates and lifetime trust.