PROVING THINGS 244 (& COST BITES 39): WHY COSTS LAWYERS HAVE TO KNOW ABOUT PROVING THINGS

We are returning to the decision on Mr Justice Cavanagh in Shepherd & Co Solicitors v Brealey [2022] EWHC 3229 (KB) to consider another aspect of the rules relating to costs.  The solicitors were seeking to persuade the court to exercise a discretion in their favour. However they did not place any adequate evidence before the court in order to allow it to exercise that discretion.

“The fundamental difficulty facing the Defendant in seeking to persuade the judge to exercise the Boardman jurisdiction, as I have said, was that the Defendant did not place any, or any adequate, evidence before the Court to persuade him to exercise the discretion. So, for example, there was no evidence about Ms Brealey’s expectation as to whether Mr Shepherd would be paid in his capacity as executor. There was no evidence about whether the work that the solicitors did in relation to the will was unexpected (or whether it had been anticipated at the time the will was signed, that the Claimant would be “difficult”).”

THE CASE

The appellant solicitors had been appointed as executors in a will.  There was no charging clause in the will. The costs judge, on an assessment, held that the solicitor could not charge for the work done as an executor. The solicitors appealed.

THE JUDGMENT ON THE EXERCISE OF THE DISCRETION

One of the issues on the appeal was whether the court should exercise a discretion it had to allow an executor to charge costs in exceptional circumstances.  The fundamental problem with this, the court held, was that there was no evidence before the court to enable it to consider exercising the discretin.

1. 1. At paragraph 31 of his judgment (set out above), Master Rowley said that in the absence of any evidence from Mr Shepherd, and in the absence of a charging clause in the will, he had to take as his starting point the proposition that Mrs Brealey did not expect her executors to charge for her services. With respect to the judge, if I had been the first instance judge, I might have taken a different view. It seems to me that, even in the absence of a charging clause, and in the absence of any evidence from Mr Shepherd, the circumstances were such as to justify the inference that Mrs Brealey would have expected to pay Mr Shepherd for of the work that he was going to have to do. He was not a friend or relative and there would be no particular reason why he would be expected to provide his services as executor for free, especially if, as seems likely, Mrs Brealey might have anticipated some difficulties arising with her son after her death (so that the work of an executor would be more onerous than normal). However, that does not mean that I can or should set aside the judge’s conclusion on this matter. It cannot be said that he was plainly wrong to take a different view. Mr Shepherd might have been prepared to do the work of an executor for free, in return for ensuring that the work of administering the estate would be given to his firm. The absence of a charging clause is significant.

1. 1. Accordingly, the judge was entitled to proceed on the basis that Mrs Brealey did not expect her executors to charge for their services. In any event, it does not appear from the judgment that this was a major consideration in the decision whether to exercise the Boardman jurisdiction. Master Rowley said that two main grounds had been advanced by the Defendant’s then counsel to justify the exercise of the Boardman jurisdiction. The first was that the Claimant had paid Mr Boardman’s fees in other proceedings. The judge was entitled to take the view that this was not a sufficient ground to justify the exercise of the court’s inherent jurisdiction. The other was that the Claimant was aware of Mr Shepherd’s involvement in the administration of the estate. Once again, the judge was entitled to take the view that this was not enough either. The Claimant was also aware was no charging clause in the will.

1. 1. The fundamental difficulty facing the Defendant in seeking to persuade the judge to exercise the Boardman jurisdiction, as I have said, was that the Defendant did not place any, or any adequate, evidence before the Court to persuade him to exercise the discretion. So, for example, there was no evidence about Ms Brealey’s expectation as to whether Mr Shepherd would be paid in his capacity as executor. There was no evidence about whether the work that the solicitors did in relation to the will was unexpected (or whether it had been anticipated at the time the will was signed, that the Claimant would be “difficult”).

1. 1. As for the other points that are made by Mr Cohen (and it is not clear whether the same points were made to Master Rowley), the judge was not plainly wrong to have failed to find that the Boardman jurisdiction should apply because of the particular complexity of the role of executor in this case. Though the role was demanding, the judge was entitled to take the view that it was not so demanding that, taking all the circumstances into account, the Boardman jurisdiction applied so that the inherent jurisdiction of the court should be invoked to provide for payment to the Defendant for Mr Shepherd’s work as executor.

1. 1. It is true that it feels unfair that a professional solicitor should not be entitled to payment for demanding work that he carried out for a client. Indeed, I have considerable sympathy for Mr Shepherd and his former firm. It is clear that a very great deal of work was done in relation to this estate and in circumstances in which the Claimant made the task of the executors more difficult than it should have been (additional work was required because the Claimant refused to give up possession of Park House and steps had to be taken to recover a loan of £40,000 that had been made by Mrs Brealey to the Claimant; the Claimant complained about the Defendant to the Legal Ombudsman, but 15 of the 17 complaints were dismissed and those that were upheld were relatively minor). Mr Shepherd acted with complete propriety and competence throughout. There was nothing underhand or improper about his actions, and Mr Hayward and the beneficiaries, including the Claimant, were aware at all material times that he was acting as executor and charging for it. If there had been no professional executor, the demands upon Mr Hayward as a sole executor would have been very great indeed, especially given the family dynamic. Nevertheless, in my judgment the Boardman jurisdiction may be exercised only sparingly and in exceptional circumstances. Furthermore, the consideration that professional advisers should generally be paid for their work is counter-balanced by a consideration which was emphasised by Mr Meehan in his submissions, namely that there is a general rule that a personal representative is not entitled to profit from their position, unless the position is made clear and approved in writing. As I have said, there is no evidence that Mr Shepherd was taken by surprise by the scale of the work that he was required to do as executor.

1. 1. The fact that the beneficiaries, including the Claimant, knew about the charges at the relevant time is, in my view, only a minor consideration, although I fully appreciate why it must be galling to the Defendant. The fact remains that the Claimant did not waive or forfeit his right to take proceedings under section 71(3) of the Solicitors’ Act 1974. Again, as I have said, though the role of executor will no doubt have been challenging for Mr Shepherd, there was no evidence before the judge to support the contention that it was so exceptionally challenging as to trigger the Boardman jurisdiction.

1. 1. Mr Cohen relied on similarities between the present case and Perotti v Watson. It is true that there are some similarities. The work on administering the estate took a number of years in the present case as it did in Perotti v Watson. In both cases, one of the beneficiaries was hostile to the executors from the outset, and this made their work more difficult. However, all cases depend on their own particular facts. There were also major differences between Perotti v Watson and the present case. In particular, the legal and other complexities of the management of the estate in Perotti v Watson were made immeasurably more difficult by the fact that the testator had concealed assets in Switzerland, an act which threw his domicile into doubt. Nothing of that sort applied to the present case and there was nothing of particular and unusual difficulty in the work that was done by the executors. For the reasons I have already given, the conclusion reached by the judge was not plainly wrong, and this position is not affected by any superficial similarities with Perotti v Watson.

1. In summary, the judge applied the correct test, he did not ignore relevant considerations or take account of irrelevant considerations, and he came to a conclusion which cannot be said to be plainly wrong. There has to be something exceptional to justify the use of the Boardman jurisdiction and in my judgment, especially given the absence of relevant evidence, there is no proper basis upon which I could find that the judge was plainly wrong to take the view that there was no sufficient exceptional feature in the present case. Nor does the report of the Legal Ombudsman affect matters to such an extent that I should set aside the judgment of Master Rowley.