Analysis
The main action was a contentious probate dispute in which the defendant, who was the younger sister of the deceased, sought to overturn all of his five wills on the grounds of lack of testamentary capacity. The deceased had suffered from severe schizophrenia throughout his lifetime. The claimants were the residuary legatees of his final will, entitling them to the lion-share of the deceased’s considerable estate. In his main judgment, the judge accepted that the deceased’s condition was severe. He acknowledged that this placed the burden of proof on the claimants to establish that the deceased had capacity when he prepared and executed his wills. However, he held that the claimants had discharged this burden. The deceased was capable of gathering his thoughts towards ‘goal directed activity’, and all five of his wills were valid. His decision to exclude the defendant from any entitlement to his estate, the judge found, was a natural consequence of their distant and fractious relationship.
The claimants submitted that the defendant should pay the entirety of the their costs, in accordance with the general rule. They also submitted that the costs should be paid on an indemnity basis from the point at which the claimants had submitted an offer in accordance with CPR Part 36. They contended that any departure from the general rule should be restricted on account of the defendant’s failure to accept earlier offers, and because she had displayed poor litigation conduct throughout the proceedings. Finally, the claimants submitted that 60% of those costs should be paid on account.
The defendant submitted that due to the severity of the deceased’s condition, which was accepted by the judge, the general rule should be modified in accordance with the special exceptions set out in Williams, Mortimer and Sunnucks on Executors, Administrators, and Probate, 20th edition, para 39-04. Those exceptions provide that a) if the deceased has been the cause of the litigation, costs may be borne by the estate; b) if the court finds that it was reasonable in the circumstances to investigate the validity of the will, those costs may be left to be borne by the party who incurred them. The defendant submitted that costs should be borne by the estate up until disclosure and production of the experts’ joint report. Finally, the defendant submitted that the Part 36 offers should not affect the judge’s decision on costs, as the claimants had refused to mediate. Moreover, their ATE insurance policy, and the undisclosed premium, had provided an obstacle to settlement.
Held:
- 1) The deceased’s condition meant that his testamentary capacity was an issue for reasonable inquiry. However, due to her litigation conduct, the defendant would bear the entirety of the claimants’ costs, excepting the cost of their expert report which would be borne by the claimants.
- 2) Litigation had not been motivated by a desire to reasonably investigate the matter, but had been driven by the defendant’s conviction that the deceased’s estate was comprised of family money which should stay within the family.
- 3) The defendant had misinstructed her expert, exaggerated evidence at trial, rejected multiple offers, and had conducted litigation in a combative, rather than investigative, fashion.
- 4) The costs from the date of the Part 36 offer were to be payable on an indemnity basis.
- 5) The claimants’ preconditions for a mediation were reasonable and did not amount to a refusal.
- 6) The ATE premium was not a stumbling block to settlement, as the defendant could have carved out an acceptable level of exposure to that premium in the terms of a counter offer.
- h7) Just over 25% of the claimants’ costs should be paid on account. This excluded payment of ATE premium, and payment on account of the CFA uplift reduced from 100% to 50%.
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