Case No: HC10C00591

Neutral Citation Number: [2012] EWHC 91 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of Justice

The RollsBuilding

Fetter Lane

EC4A 1NL

Date: 30/01/2012

Before :

MR JUSTICE NORRIS

------

Between :

Maureen Wharton / Claimant
- and -
(1)Timothy John Bancroft
(2) James William Douglas Bancroft
(3) Victoria Wharton
(4) Gina Fagan
(5) Amanda Wharton / Defendant

------

Ms Constance McDonnell (instructed by Furley Page) for the Claimant

The First Defendant appeared in person

The Second Defendant did not appear

Mr Jeremy Cousins QC and Ms Michelle Stevens Hoare (instructed by Wright Hassall LLP) for the Third Fourth and Fifth Defendants

Hearing dates: 13 January 2012

------

JUDGMENT

Mr Justice Norris :

  1. This is my judgment about costs. I will first deal with the position as between Maureen and the Daughters.
  2. I address first the period up to and including the 7th May 2010. The starting point for a consideration of the relevant pre action and action costs during this period is CPR 44.3 (2) (a). An application of the general rule would give Maureen her costs as against the Daughters for this period; but, having regard to all the circumstances, a different order might be appropriate. In Probate cases this requires the Court to consider two particular sets of circumstances which experience over the years has shown may require a disapplication of the general rule in order to achieve justice; it also requires a consideration of the same factors as ought to be considered in any other litigation.
  3. First, whilst remembering that costs are always in the discretion of the court, it is recognised that if the cause of the litigation has its origin in the fault of the testator or of those interested in residue, then the costs may properly be paid out of the estate. In the instant case, as in many others, the reality of such an order would be that Maureen (who has succeeding in proving the 2008 Will) would pay to the Daughters their costs of unsuccessfully challenging it.
  4. Was Mr Wharton the cause of the litigation over his will because his own conduct lead to the 2008 Will being surrounded with confusion or uncertainty in law or fact? What Mr Wharton did was to make a Will whilst he was in an enfeebled state and effectively on his death bed. He did so by giving oral instructions to a solicitor who immediately transcribed them into an effective Will, the terms of which were commented upon by the solicitor as he undertook the drafting. At one point in the process (after the key dispositive provision had been transcribed and commented upon) Mr Wharton lost concentration. Mr Wharton then listened whilst the terms of the Will were read over to him clearly and distinctly by someone who had not been involved in its preparation and he expressed his clear assent to it. He then signed his Will in a formally correct way before two reliable witnesses. Many would think that Mr Wharton had done his best to ensure that his affairs were not left in a state of confusion.
  5. Before he made the 2008 Will Mr Wharton had made a number of inconsistent statements to various acquaintances about the provision he had already made by Will (or possibly, the provision he intended to make). Immediately after making the Will Mr Wharton had given an indication to one of the Daughters that she and her child would be provided for (though he did not say that he had made provision by Will for them). In Re Cutcliffe’s Estate [1959] P.6 at 19 Hodson LJ said

“While it will not be possible to limit the circumstances in which at testator is said to have promoted litigation by leaving his own affairs in confusion, I cannot think it should extend to cases where a testator by his words … has misled other people and perhaps inspired false hopes in their bosoms that they may benefit after his death. It does not seem to me that the Judges who, in the past, have laid down the practice that costs should be allowed out of the estate where the fault of the testator had lead to the litigation, had in mind such a situation as that.”

Mr Cousins QC accepted that that was the general principle. But he submitted that what was said by Mr Wharton had particular significance because it formed part of a complex of interlocking features (including the behaviour of Maureen and of Mr Bancroft after Mr Wharton’s death). The significance of these other features seems to me to make it less (not more) appropriate to say that Mr Wharton was the cause of confusion and uncertainty and that his estate should be depleted by all the costs of the case.

  1. The other matter to which Mr Cousins QC drew attention was that Mr Wharton had left a Spanish Will which incorrectly declared that he and Maureen were married and that he had two daughters. This did not leave his affairs in any state of confusion. The 2008 Will revoked the Spanish Will. Looked at objectively (and not through the eyes of someone looking for straws at which the clutch – a remark not directed at Mr Cousins QC) the Spanish Will simply showed that Mr Wharton treated Maureen as his wife (as did the 2008 Will) and that there were times at when he would not recognise one of his daughters (as did the 2008 Will).
  2. In my judgment there is no ground to say that this Probate action was caused by Mr Wharton.
  3. Was the action caused by the Claimant? Mr Cousins QC submits that the Claimant behaved with the lack of candour in the following respects;-

(a)she did not disclose that, at the time when Mr Wharton made the 2006 Will she too had made a mirror will:

(b)in the proceedings she did not disclose that will herself (and it is alleged that she did so because she was attempting to conceal any involvement in the will making process):

(c)She dealt with money in Spanish bank accounts without telling the authorities that Mr Wharton was dead:

(d)She was inaccurate in the information she provided about the Spanish bank accounts:

(e)She ignored, resisted and delayed the provision of information, for example about dealings by White Horse with its assets:

(f)She cut the Daughters out of her life and from any involvement or connection with Mr Wharton and his former home or possessions.

  1. Mr Cousins QC posed the question: suppose Maureen had disclosed that she had made a Will in 2006 and had perhaps persuaded Mr Wharton to make a “holding” Will at the same time, how different would things have been as regards this action? If I am invited to speculate in that way I would unhestitatingly answer in the sense that the Daughters would have continued vigorously to contest the 2008 Will, and would have regarded any involvement by Maureen in the making of the 2006 Will as supporting their allegations of undue influence in 2008 (as they pleaded).
  2. This part of the Daughters’ argument on costs referred to matters about which I have in the action itself found it unnecessary to make findings of fact to reach a conclusion. It is not necessary to make extensive findings of fact for costs purposes. In fairness to the Daughters I should record that I do not consider that Maureen was wholly frank about one of the Spanish bank accounts: and as to the behaviour and conduct in and following the funeral the Daughters’ account is probably more accurate than Maureen’s account. In fairness to Maureen it should be recorded that the fault was not all on one side, and the questions raised by the Daughters as to the circumstances of Mr Wharton’s death must have been extremely distressing. But in my judgment none of this has anything to do with the origin of the Probate action. If in the perception of the Daughters it does then that is only because they persisted in making enquiries about matters that were simply irrelevant to the question whether the September 2008 will making process had resulted in a valid Will.Looking at the action and its conduct as a whole the Daughters were in no sense “led” into commencing the probate proceedings.
  3. There is no ground on which I can properly conclude that Maureen was the cause of the Probate action. In my judgment the cause of the Probate action was the refusal of the Daughters to accept the truth of Mr Bancroft’s statement (in his letter to their then solicitors of the 10th November 2008) that Maureen was not present when instructions were taken for the 2008 Will or when that Will was made or executed; or the truth and accuracy of Mr Bancroft’s detailed attendance note (with which they were provided on 2December 2008). The terms of the letters written by the various solicitors on their behalf and the terms of their original Defence and Counterclaim demonstrate, to my mind, that irrespective of the material available to them the Daughters were determined to upset the 2008 Will.
  4. When examined, the cause of the litigation does not warrant a departure from the general rule as to costs and its replacement by an order that the costs should come out of the estate. (I should note that by “the costs” I am of course referring only to those costs for which the Daughters are liable having regard to the terms of their CFA. Had I been minded to consider awarding costs out of the estate I would have wanted to see the terms of the CFA to ascertain whether such an order would itself have amounted to “success” which would have exposed the Daughters to increased liability for costs).
  5. The second set of circumstances that may cause a disapplication of the general rule is that if there is a sufficient and reasonable ground (looking at the knowledge and means of knowledge of the parties opposing the will) to question the validity of the will then it might be proper to make no order as to costs. There are two brief comments to add about those circumstances. First, a party who simply says that there is a reasonable cause for inquiry and invites the Court to undertake that inquiry can obtain costs protection under CPR 57.7(5); so the second principle in Spiers v English is directed at those who have chosen to run an active case but failed in it. Second, one must not confuse the concept of “reasonable cause for enquiry” with “an assertion of undue influence which cannot be struck out as having no real prospect of success” or even “an arguable case of undue influence”. The circumstances have to be such as to have lead the Daughters reasonably to the bona fide belief that there were good grounds for impeaching the Will for want of knowledge and approval or for undue influence. In my judgment if one looks at the circumstances in which the 2008 Will was produced from a balanced stand point it does not reasonably lead to a genuine belief that the process was invalid. If one looks with a deeply suspicious eye at those circumstances and approaches those circumstances by putting the worst possible construction on the characters and events in question then you can get a case together: as I think the terms of the original Defence and Counterclaim demonstrate. Such an approach, has of course, to yield to reality: and the Daughters realistically did not pursue their original challenge to capacity and withdrew their pleaded allegation that the 2006 Will was forged. They also modified their original allegation that Maureen instructed Mr Bancroft as to the content of the 2008 Will, and significantly revised their allegations as to what Mr Wharton’s testamentary intentions were. At trial there is no attempt to maintain very significant parts of the pleaded case of want and knowledge and approval or undue influence (for example the allegation that Maureen presented the 2006 Will to Mr Wharton and to Mr Bancroft and Joanna Bancroft when they attended Mr Wharton on the basis that it represented Mr Wharton’s established testamentary wishes). The impression I have is that this is not a case in which the available material reasonably lead the daughters to the genuine belief that the Will was invalid, but rather that the Daughters genuinely and passionately believed that the 2008 Will must be invalid whatever the circumstances reasonably showed and would use whatever material was available in order to sustain that a priori position. They and those advising them took a commercial decision about the strength of that case: and it has turned out to be wrong.
  6. Accordingly, I hold that there is no proper ground upon which to displace the general rule as to costs with an order that there be no order as to costs.
  7. I therefore turn to a consideration of the general factors outlined in CPR 44.3. I have considered each of the matters to which my attention is directed, and I have stood back and looked at the facts in the round: having done so I see no proper ground upon which to deprive Maureen of any part of the costs that she would otherwise receive under the general rule. I would specifically record that I have considered the Daughter’s complaints about Maureen’s conduct before and in the course of this case, that I have weighed against that the defendants’ own conduct, in particular the nature of the allegations which they made against Maureen, the modification of allegations (rather than their abandonment) in the face of emerging material and the nature of the case advanced at trial (including in particular the deliberate amendment to include a yet further allegation of undue influence against Maureen in relation to the 2006 Will). I find myself in agreement with a view expressed by Hodson LJ in Re Cutcliffe’s Estate (supra) at page 21: -

“it must surely be obvious to anyone who has studied the history of litigation in the Probate Division… that where pleas of undue influence and pleas of fraud are made, the probability, at any rate, if they are unsuccessfully made, is that people who make such charges and fail will be condemned in the costs not only of that charge but of the whole action”.

My exercise of discretion in this case in fact accords with the probability there suggested.

  1. The next question to be determined is as to the basis upon which Maureen’s costs down to and including the 7th May 2010 should be assessed. Ms McDonnell makes a considered submission that the costs should be assessed on the indemnity basis because of

(a)the nature of the case advanced;

(b)the manner in which the case was advanced;

(c)the extent to which the Daughters’ solicitors engaged in irrelevant enquiry (e.g. as to the terms of Spanish conveyancing documents, as to the capital gains tax payable on the sale of Mr Wharton’s boat, and as to the circumstances in which Maureen obtained a Spanish identity number);

(d)the way that the existence of the daughters CFA and ATE arrangements were deployed in correspondence against Maureen when she was herself personally funding the litigation.

  1. I have reminded myself of the approach outlined in Reid Minty v Taylor [2001] EWCA Civ 1723 and National Westminster Bank Plc v Rabobank Nederland (No. 2) [2007] EWHC 1742 (Comm) ; and like Morgan J in Digicel [2010] EWHC 888 (Ch) have found it helpful to ask whether it is just to make in Maureen’s favour an order

(a)Which gives her the benefit of the doubt on any disputed question as to whether an item of costs was reasonably incurred or reasonably in amount? and

(b)relieves her of the obligation of demonstrating proportionality.

  1. I have decided that an order that the Daughters pay Maureen’s costs of the action and counterclaim on the indemnity basis is warranted for the following reasons:-

(a)The costs incurred by the Claimant were largely responsive to the case made against her by the Daughters. Her positive case (that the Will was duly executed by a competent testator) was not in fact in issue. She was responding to the case of want and knowledge of approval and undue influence made by the Daughters and it is not unfair to put upon them (particularly having regard to the way they conducted that case) the task of demonstrating that a response to their aggressively pursued case was in some measure unreasonable.

(b)This is not a case in which issues of proportionality could figure large. This was an “all or nothing” decision about a four million pound estate.

(c)The case of want and knowledge and approval was legally and factually weak to such a degree that the case lies outside the norm. If Mr Bancroft’s detailed attendance note was accurate (and there was no suggestion that it was dishonestly concocted) then a man of unchallenged capacity announced what the intention was, proceeded to give direct oral instructions to his solicitor, listened as the solicitor provided some sort of commentary on his drafting, listened whilst the finished product was read back to him, affirmed that he understood what the will said and then signed it. The suggestion that he did not know and approve that he had left everything to his wife and that he did not know and approve that he had left nothing to his daughters was extraordinary.

(d)A case based on undue influence is one founded upon a very serious charge which ought not to be pleaded or pursued unless there is a proper factual foundation from which the necessary inference can be drawn. The cases are clear as to what those inferences are and as to the limited circumstances in which they may be properly drawn. The case pleaded and argued was in my judgment weak and outside the norm.