Analysis
The testatrix by her will appointed her brother, Mr Robin Shepherd (a solicitor), ‘and the partners at the time of my death in the firm of Shepherd and Co [being Mr Shepherd’s firm]’ as her executors. The will made no provision for remuneration of executors. Mr Shepherd’s firm (the appellant) was retained by the executors and the retainer was signed by the brother alone. Mr Shepherd did work in his capacity as executor of the estate of the deceased and the appellant rendered a bill to the estate. The testatrix’s son (the respondent) brought third-party assessment proceedings pursuant to s71(3) of the Solicitors Act 1974.
The costs judge held that the appellant was not entitled to be paid fees levied by Mr Shepherd for work done in his capacity as an executor (as opposed to solicitor), and any fees claimed as work done by him would require an explanation at the next stage of the detailed assessment, applying the ‘blue-pencil’ test approach (Tim Martin Interiors v Akin Gump LLP [2011]). The firm appealed.
The issues to be determined were:
- (1) Did the costs judge misapply the test in Tim Martin and/or err in failing to consider that the charges were sought by the appellant, not by Mr Shepherd personally?
- (2) Was the costs judge wrong to conclude that the appellant was not entitled to payment for the time spent by Mr Shepherd in his capacity as executor under s29 of the Trustee Act 2000 because the only other executor, Mr Hayward, had agreed in writing to his remuneration?
- (3) Should the costs judge have exercised the court’s inherent jurisdiction (the Boardman jurisdiction) to permit recovery of fees?
- (4) If the costs judge was right to disallow recovery of the fees, should the disallowance be restricted to the profit the appellant made on Mr Shepherd’s time, and not the cost of providing his services? This point was taken for the first time on appeal.
Held:
- (1) The costs judge did not misapply the Tim Martin test, nor did he err in not considering that the charges were sought by the appellant rather than Mr Shepherd personally. A distinction between Mr Shepherd and the appellant would be wholly artificial, as Mr Shepherd’s work as executor was done as a partner in the appellant. Whether the appellant was entitled to charge for Mr Shepherd’s time as executor depended on whether such an entitlement arose under s29 of the Trustee Act 2000 or under the court’s inherent jurisdiction under Boardman v Phipps [1966].
- (2) Due to the clear wording of the will, Mr Smyth (being the only other partner in the appellant other than Mr Shepherd at the testatrix’s death) was the other executor at the material time. Alternatively, even if he was not an executor, the requirements of s29(1) of the Trustee Act 2000 had not been met, as Mr Hayward did not give the requisite written authorisation for Mr Shepherd’s work as executor to be remunerated out of the estate. It was not sufficient that all those executors who obtained a grant gave the requisite written consent (para [85]). Moreover, the brother’s signature to the firm’s invoices would not, without more, amount to consent sufficient for s29 (para [92]).
- (3) The Boardman jurisdiction should only be exercised sparingly and in exceptional circumstances: Re Worthington [1954]; Guinness plc v Saunders plc [1989] followed. The costs judge was entitled to proceed on the basis that, as the will did not contain a charging clause, the testatrix did not expect her executors to charge for their services. Challenging this aspect of his judgment amounted to challenging an evaluative judgement of a specialist judge, which is akin to an appeal against the exercise of a judicial discretion. This could only be disturbed according to the principles summarised in Azam v University Hospital Birmingham NHS Foundation Trust [2020]. The appellant did not produce adequate evidence about the deceased’s expectation as to whether Mr Shepherd would be paid in his capacity as executor. The costs judge applied the correct test, did not ignore relevant considerations or take account of irrelevant considerations, and came to a conclusion which could not be said to be plainly wrong.
- (4) Per curiam: attempts to reargue the issues in the case once the judgment had been circulated in draft were appropriate only in the most exceptional circumstances: Egan v Motor Services (Bath) Ltd [2007].
Appeal dismissed.
JUDGMENT MR JUSTICE CAVANAGH: [1] This is an appeal against the judgment of Master Rowley, sitting as a Costs Judge, dated 29 November 2021. The judgment was handed down in third party assessment proceedings that were brought by the Respondent, a beneficiary of the estate of his mother, Mrs Ann Brealey, pursuant to s71(3) of …Continue reading "Shepherd & Co Solicitors v Brealey [2023] WTLR 755"