Peter Ian Brealey v Shepherd & Co Solicitors
[2024] EWCA Civ 303
Brian Richard Bowser v Julie Ann Smith & Anor
1 August 2023
[2023] EWCA Civ 923
Court of Appeal
Two people were arguing over who should manage a dead person's money. One, a lawyer, rushed to court without trying to talk things out first. The judge said the lawyer was wrong and made him pay the other person's legal fees. The lawyer appealed, but lost because he hadn't followed the proper steps and acted unreasonably.
Key Facts
- •Appeal against a costs order made by Bacon J on 24 November 2022 in the matter of the estate of Ian John Smith (deceased).
- •Dispute between Brian Bowser (claimant/appellant), a solicitor, and Julie Ann Smith (defendant/respondent), the testator's estranged wife.
- •Dispute concerned the removal of both original executors and appointment of an independent administrator.
- •Bowser initiated proceedings without proper pre-action correspondence, seeking Julie's removal as executor.
- •Costs order was adverse to Bowser, ordering him to pay Julie's costs and denying him indemnity for his costs from the estate.
- •Bowser's claim was based on perceived conflict of interest between Julie's role as executor and her potential claim under the Inheritance (Provision for Family and Dependants) Act 1975.
- •The court found no automatic conflict of interest precluding a 1975 Act claimant from acting as personal representative.
- •A consent order was made removing both executors and appointing a new independent administrator.
- •The issue of costs was determined on paper after exchange of written submissions.
- •Bowser appealed against the costs order.
Legal Principles
Personal representatives are entitled to reimbursement from the trust funds for expenses properly incurred when acting on behalf of the trust.
Section 31 of the Trustee Act 2000 and Section 35 of the Trustee Act 2000
A personal representative is entitled to an indemnity out of the relevant trust fund or estate for costs properly incurred; this depends on circumstances, including whether they obtained court directions beforehand, acted in the estate's interest, and acted reasonably.
CPR rule 46.3 and PD 46 paragraph 1.1
The test for indemnity is whether expenses were properly incurred and incurred by the trustee when acting on behalf of the trust; 'properly incurred' means 'not improperly incurred' and includes unreasonable conduct.
Price v Saundry & another [2019] EWCA Civ 2261
There is no principle preventing a claimant in family provision proceedings under the 1975 Act from acting as personal representative.
Case Law and Textbooks (White Book, Ross on Inheritance Act Claims, Francis on Inheritance Act Claims)
When an action is settled except for costs, the court may determine costs on the limited available material, but only if it's not manifestly unjust.
BCT Software Solutions Limited v C Brewer & Sons Limited [2004] C.P. Rep 2
Outcomes
Appeal dismissed.
The costs order fell within the judge's discretion and was not manifestly unjust. Bowser's conduct in bringing the proceedings was unreasonable; he acted hastily, without pre-action protocol, and failed to seek Beddoe relief.
Fresh evidence admitted.
The evidence (Bowser's file relating to a property transfer) met the Ladd v Marshall criteria: it could not have been obtained earlier with reasonable diligence, it would likely influence the result, and it is credible.