Analysis
Sidney Albert Johnston (the deceased) died on 27 March 2017. In prior proceedings, the deceased’s son, Colin Johnston (Colin), had brought a successful claim against the deceased’s estate under the Inheritance (Provision for Family and Dependants) Act 1975 (the 1975 Act claim).
Following trial of the 1975 Act claim, Colin received a lump sum award of £125,000 (the award) and an order for costs.
A point of importance in the 1975 Act claim had been historic litigation between Colin and the deceased. This had resulted in a costs order being made against Colin on 19 November 1998 (the costs order). Colin had never paid the costs order and, for unclear reasons, the deceased had never enforced it. No final costs certificate was in the possession of any party and there was a factual dispute as to whether one had ever been obtained.
Following the 1975 Act claim, the deceased’s executrix attempted to net off the award against the costs order under the rule in Cherry v Boultbee (1839). The rule provides for the netting off of reciprocal monetary obligations between individuals and funds, or between a legatee (as a successful 1975 Act claimant is treated) and an estate in this case. The rule applies even where the debt is statute barred at the date of death of the deceased.
The executrix’s position was that the sum outstanding under the costs order was some £116,055.75. On her case, the rule in Cherry v Boultbee allowed the costs order to be balanced against the award. This reduced the estate’s liability to Colin from £125,000 to circa £8,900.
Colin brought a CPR Part 8 claim for a determination of whether the executrix was entitled to net off the award and the costs order.
Held:
- (1) As a finding of fact, no final costs certificate was ever obtained by the deceased. Despite an extremely thorough search, no certificate had been found. A final costs certificate is not issued until all court fees have been paid and there was evidence to suggest this was not the case.
- (2) As a result, there was no existing monetary obligation in respect of the costs order. There was no obligation to pay the costs order until a final costs certificate had been obtained and the date for payment in that certificate had passed. As a result, the rule in Cherry v Boultbee did not apply.
- (3) Obiter, the rule in Cherry v Boultbee was incompatible with the statutory scheme of the 1975 Act. The 1975 Act requires a court to take into account sums owed to the estate by a claimant. It would have been to ‘turn equity on its head’ for an award to be made, following consideration of those sums, and for that award to then be repayable to the estate.
- (4) Obiter, there was no abuse of process on the part of the executrix for failing to mention the rule in Cherry v Boultbee during the 1975 Act proceedings as the rule did not apply at all.
- (5) No view was expressed on whether s24 Limitation Act 1980 prevented the netting off of interest six years from the date of the costs order.
Declaration made that Colin was entitled to payment of the 1975 Act award without deduction or net off.
JUDGMENT DEPUTY MASTER BRIGHTWELL: [1] This Part 8 claim relates to the administration of the estate of the late Sidney Albert Johnston, who died on 27 March 2017. [2] In earlier proceedings brought under the Inheritance (Provision for Family and Dependants) Act 1975 (the 1975 Act) the claimant, Colin Johnston, sought an order for reasonable …Continue reading "Johnston v Wackett [2022] WTLR 575"