Analysis
The issue before the court was costs in proceedings relating to the estate of Vincent William Cashinella (the testator), who died on 25 November 2019. By a will dated 30 May 1995 (the will) the testator appointed his wife, Olwen, and the first defendant, who was married to Olwen’s niece, as executors. The testator’s wife predeceased him and probate of the will was granted to the first defendant alone.
By a Part 8 claim dated 8 September 2022 (the claim), Olwen’s grandniece (the claimant) brought proceedings originally for:
- (1) an order removing the first defendant as personal representative and appointing a professional trustee in his place;
- (2) an order permitting the substitute personal representative to charge remuneration;
- (3) an order that the first defendant provide the new personal representative with an inventory and an account of the estate;
- (4) an order that the first defendant repay sums paid out of the estate to his daughter (the second defendant) which were above the legacy of £2,000 provided for by the will;
- (5) a declaration as to the proper division of the residuary estate in the events that had happened (the claimant claiming 66.66%); and
- (6) costs.
By the time the claim came before the judge, the only remaining live issue was the question of costs. The claimant and first and second defendants were professionally represented, and the third and fourth defendants were neither present nor represented.
The judge set out the background to the matter to assist in determining the issue of costs. He considered the provisions of the testator’s will, which gave a number of pecuniary legacies, including £2,000 to the second defendant. The will left the whole of the residue to Olwen, but with a substitutionary gift over to five beneficiaries in specified shares, three of whom were the third defendant, the fourth defendant and the claimant. According to the terms of the will, the third defendant, the fourth defendant and the claimant each would take specific shares. The will also contained an accruer clause applicable to the gift of residue and provided that the testator’s trustees should be entitled to be indemnified out of the assets of the estate against all liabilities incurred in connection with the bona fide execution of their duties and powers.
The judge went on to observe that there was a problem with the form of the will since the clause dealing with residue contained no fewer than five manuscript amendments. Immediately before the hearing, counsel for the parties present were able to examine the original will, which had been ordered to be brought to court. Counsel agreed that, notwithstanding the scribbling, it was clear that the original words in the will, under the scribbling, read ‘50%’. The judge noted that accordingly, there was a question, first, as to the validity of the manuscript amendments to the will, and second, a further question as to what would be the position if those amendments were not valid. He found that, in part, this question was one of probate rather than construction and although the rules in CPR Part 57 had not been followed in relation to this part of the claim, he was satisfied that it was appropriate for him to deal with the issue. The judge made an order under CPR r3.10 to remedy the failure to follow the procedure so far as necessary.
The judge considered the validity of the amendments to the will in light of the authorities and provided some guidance on obliteration and the doctrine of dependent relative revocation. He found that a total revocation by physically burning, tearing up or otherwise destroying a will need not be attested, but it did need to be intended. While noting that there was no physical injury to the will, the judge found that partial revocation may also occur, for example by obliterating words without destroying the document. He held that s21 of the Wills Act 1837 was subject to an important exception, which was contained in the phrase ‘except so far as the words or effect of the will before such alteration shall not be apparent’. This meant that an obliteration which rendered the previous text illegible by natural means revoked the obliterated words even if not attested. Where the obliterated (or merely crossed-out) words were still legible by natural means, the revocation would be effective only if attested in accordance with s9 of the Wills Act 1837. In light of this analysis, the judge found that in the present case, the words in the will purportedly obliterated were still legible, and read ‘50%’. Accordingly, the obliteration could not amount to a partial revocation unless it complied with the Wills Act formalities. Since there was no valid attestation of the obliteration in the will, there was no partial revocation of the gift of the 50% share of residue to the claimant.
The judge held that had there otherwise been a partial revocation of the words ‘50%’ in the gift to the claimant, the doctrine of dependent relative revocation – which holds that where the intention to revoke is dependent on a condition which is not fulfilled, the revocation (being a matter of intention) does not take effect – would have applied. He went on to examine the authorities on the doctrine and ultimately found that this analysis explained why once counsel had examined the will, the first and second defendants no longer opposed the declaration sought by the claimant that she was entitled to (i) 50% of the residue by virtue of the original gift in the will, and to (ii) one half of the shares of the two other beneficiaries, who had predeceased the testator. Accordingly, there would be a formal declaration that the claimant had that share of the residue.
The judge then turned to the issue of costs. He considered the general rules under Senior Courts Act 1981, s51(1), and CPR r44.2(1), r44.2(2)(a) and r44.2(2)(b). The judge noted that the court would have regard to all the circumstances, including conduct of all the parties and any admissible offer to settle the case (not falling under CPR Part 36) which was drawn to the court’s attention under CPR r44.2(4). He also considered the special rules for trusts and estates under s31(1) and s35(1) of the Trustee Act 2000, CPR r46.3, and CPR PD 46, para 1.
The judge considered the submissions made by the claimant and the first and third defendants, including whether the first defendant was entitled to an indemnity out of the estate.
Held (awarding costs jointly and severally on the standard basis):
On the first three parts of the claim (removal), the first and second defendants had capitulated a week before the hearing. In relation to the fifth part of the claim (the validity of the amendments) they had capitulated on the morning of the hearing outside court. The fourth part had already been stayed. On the face of it, therefore, the claimant was the successful party, and, applying the general rule, she should therefore be entitled to her costs. However, it was a feature of modern litigation that matters often are not as clear as they appear and the costs arguments put forward by the first and second defendants should be considered, taking into account the question of whether the first defendant as executor should be entitled to an indemnity from the estate and the question of mediation.
As to the costs of litigation, the first and second defendants were right to pursue the possibility of mediation and the claimant was wrong to ignore it. The combination of litigation risk and irrecoverable costs almost always makes it worthwhile considering mediation and other ADR and the claimant had not given enough thought to this. In accordance with the caselaw it was appropriate to mark the court’s disapproval of the claimant’s failure to take up the mediation/ADR suggestions of the first and second defendants. However, it was not right to deprive the claimant of all her costs and therefore she would be awarded 50% of her costs. As between the first three defendants, the second and third defendants would be liable jointly and severally for 50% and because the first defendant was neutral on the ‘probate’ issue he would be jointly and severally liable for 35%. This was not a case for costs on the indemnity basis, as fraud had not been found and the defence was not out of today’s norm.
The executor’s indemnity under s31(1) of the Trustee Act 2000, the authorities and the express indemnity clause in the will were considered. The clause in the will added nothing to the statutory indemnity to which an executor was prima facie entitled and therefore it was not necessary to decide whether it was possible in law for such a clause to extend the statutory indemnity. Nevertheless, Lewin on Trusts, 20th ed 2020, at 48-010, expressed the view that a clause could extend the statutory indemnity, subject always to public policy limits, on the basis that the effect of it was conceptually analogous to that of an exoneration clause. Although there had not been argument on the point, this seemed right in principle.
As to whether the first defendant should be deprived of his indemnity in the present case because he had fought the ‘removal’ part of the claim against him and lost, giving up when it was far too late was not acting in the interests of the beneficiaries as a whole and ‘misconduct’ in this technical sense did not require bad faith. The first defendant’s continued opposition of the orders sought until a week before the disposal hearing was a sufficient basis for depriving him of his executor’s indemnity. This reasoning did not apply to the first defendant’s costs of the ‘probate’ part of the claim. The terms of the will exoneration clause did not assist the first defendant. An executor (or trustee) may still be removed from office on the basis of conduct which would ground personal liability for breach of trust or other fiduciary duty, but for the exoneration clause.
The appropriate costs order to make was one which required the second and third defendants jointly and severally to pay 50%, and the first defendant to pay 35% of the claimant’s costs on the standard basis, jointly and severally with the first and second defendants. The first defendant would have no indemnity from the estate either for this liability or for his own costs (save for nominal costs of the ‘probate’ issue).
JUDGMENT HHJ PAUL MATTHEWS: Introduction [1] This is my judgment on a claim under CPR Part 8 relating to the estate of Vincent William Cashinella, who died on 25 November 2019. The deceased left a will dated 30 May 1995, appointing his wife, Olwen, and the first defendant, who was married to his wife’s niece. …Continue reading "Stoney-Andersen v Abbas & ors [2024] WTLR 741"