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	England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> National Westminster Bank v Lucas [2014] EWHC 1683 (Ch) (01 April 2014) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2014/1683.html Cite as: [2014] EWHC 1683 (Ch)

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IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Rolls Building Fetter Lane London EC4A 1NL
		1 April 2014

MR JUSTICE SALES:

1. This is a hearing to deal with consequential matters, most particularly costs, arising from the hearing of the two applications addressed in my judgment in these proceedings of 11 March 2014 (see 2014 EWHC 653 (Ch), "the main judgment"). Subject to issues of cost, the form of the Scheme and of the order to be made has been debated and agreed. This ruling addresses the question of costs, which has been contentious.
2. I address first the costs in relation to the Trust's application to remove the Bank as executor. The Bank seeks its costs of that application from the Trust, to be paid on the indemnity basis. In my judgment, that is the just and appropriate order to make.
3. This was a hostile application brought by the Trust. The Trust lost on its application. Liability for costs as between the Bank and the Trust should, in my judgment, follow the event in accordance with the usual principal in CPR part 44. Although Mrs Peacocke, for the Trust, asserted that the Bank had behaved unreasonably or improperly by serving its skeleton argument on this application late in the day, I do not consider that there should be any disallowance of the Bank's costs or any cross-order for payment of the Trust's costs by reason of this. I do not consider that late service of the Bank's skeleton had any material impact whatever on the conduct or outcome of the litigation in relation to the Trust's application or, indeed, in relation to the outcome of the Bank's application. There was never any prospect that the Trust would back down when it saw the fairly obvious points made by the Bank in that skeleton argument. The Bank's resistance to the application was already clear from the correspondence and the evidence it had served.
4. As regards to basis for assessment of the Bank's costs, I consider that the indemnity basis is the just and appropriate basis in all the circumstances of this case. The Trust's claim against the Bank on this application and submissions made in support of it were not only wrong but, in my judgment, were so clearly and unreasonably wrong as to warrant the conclusion that the Trust has acted unreasonably and outside the norms to be expected in litigation of this kind, involving argument over the administration of what may well prove to be an insolvent estate. I accept the submissions of the Bank and the Personal Injury Claimants to that effect.
5. The main judgment sets the scene against which the application should be set: see especially paragraphs [20] and [21] of that judgment. Mr Cunningham QC for the Bank drew my attention to passages in the main judgment in which I was critical of the behaviour of the trust in its approach to this litigation: in particular, paragraphs [40], [42], [52], [68], [76], [81], [99] and [106]. I refer, in particular, to paragraph [99] of the main judgment where I said this:

"… Mrs Peacocke said that the Bank reacted with inappropriate hostility to the Trust when the Trust sent the Bank its draft application notice for removal of the Bank and the draft evidence in support in October 2013. I do not accept this submission. The draft application notice and evidence involved the adoption by the Trust of an unduly hostile and critical stance in relation to the Bank, effectively accusing the Bank of misconduct as executor without good reason, and the Bank was entitled to reject the draft application and the accusations in the robust way it did. It is completely unsurprising that the Bank reacted in this way. It is not a reaction from which it can be inferred that the Bank has formed an attitude of inappropriate hostility to the Trust which is likely to impede it in fulfilling its duties as executor and personal representative in due and proper manner. The Bank was entitled to point out, as it did, that the court would wish to supervise any question of replacement of the executor and that the views of others, including the PI Claimants, would be relevant matters to be taken into account in relation to such a question."

6. In my view, the Trust adopted an unreasonable and misconceived stance on its application. Its arguments failed to accord any proper recognition to the discretion of an executor and administrator in deciding how to proceed in administering an estate, as recognised in the authorities, and unreasonably sought to assert that the Bank owed no responsibilities to the Personal Injury Claimants or other claimants who might come forward against the Savile estate or that those responsibilities should simply be overridden in favour of the interests of the Trust and beneficiaries under Jimmy Savile's will in the course of administration of his estate. As Mr Cunningham emphasised, the Trust lost - and I would say, lost clearly and badly - on every single one of the nine points relied on by Mrs Peacocke in her argument in support of the removal application.
7. In my view, the Trust also behaved unreasonably in other ways. The removal application was bound up with the Trust's position on the Bank's application for approval of the Scheme, but the Trust failed unreasonably to tell the Bank the full details of its opposition to the scheme, which I refer to later. To the extent that the Trust did make its objections known, it was on the misconceived basis that the Scheme would be futile and ineffective.
8. The conduct of the Trust has greatly increased the cost of the administration of Jimmy Savile's estate, and unreasonably so. In all the circumstances, I consider it is just and appropriate that the estate and all those claiming against the estate in due course should have their interests protected by a costs order on the indemnity basis against the Trust. The Bank did not seek a costs order against the fifth defendant and the other beneficiaries.
9. In relation to the Trust's application to remove the bank, the Secretary of State and the Personal Injury Claimants also seek their costs from the Trust, also on the indemnity basis. The BBC did not seek orders for costs.
10. Both the Personal Injury Claimants and the Secretary of State submit that the Trust's application was hostile to the Bank, that they had a direct interest in that application because of the importance of maintaining the Bank in place to operate the Scheme in a proper fashion as contemplated in the negotiations which had led to the agreement on the terms of the Scheme, and that they were, therefore, entirely foreseeable and proper parties which the Trust should have expected to appear to contest the Trust's application to have the Bank removed as executor. As to the indemnity basis for assessment, they essentially repeat the points already made, that the Trust behaved unreasonably in what amounted to contested litigation against them as well as against the Bank.
11. I accept these submissions, which are amply supported, in my view, by the factual background in the case, as reviewed in the main judgment. The Personal Injury Claimants and the Secretary of State had their own direct interest in the outcome of the removal application brought by the Trust, not least because an important part of the Trust's argument was that the Bank was behaving improperly by giving weight to their interest in the administration of Jimmy Savile's estate by negotiating and agreeing the Scheme with them. Also, the Trust, as already mentioned, kept the full scope of its objections to the Scheme, as it had been negotiated by the Secretary of State and the Personal Injury Claimants with the Bank, up its sleeve until the hearing of its application.
12. I consider the contest regarding the removal of the Bank was in substance as much a contest between the Trust and the Personal Injury Claimants and the Secretary of State as a contest between the Trust and the Bank in the unusual circumstances of this case, so that again costs should follow the event as between the Trust and those parties.
13. For the reasons already given, I consider that the Trust behaved unreasonably and outside the norms of proper conduct of litigation in cases of this kind and that the indemnity basis for assessment is just and appropriate.
14. Neither the Trust nor the other beneficiaries seek an order for their costs to be paid out of the estate in relation to the Trust's application.
15. I turn then to the application by the Bank for approval of the Scheme. The Bank submits that the Trust's stance in relation to its application seeking the approval of the Scheme has greatly increased the costs for the Bank in seeking and obtaining the approval of the court for the Scheme and that this should be reflected in the costs order made. I was referred to Green v Astor [2013] EWHC 1857 (Ch), in particular at paragraphs [46] to [48], for an outline of relevant principles:

"46. In Re Buckton [1907] 2 Ch 406 Kekewich J, while noting that 'costs are so largely in the discretion of the judge that ... it is well nigh impossible to lay down any general rules which can be depended on to meet the ever varying circumstances of particular cases', set out some general guidance which has frequently been applied. He divided trust litigation into three categories:

'In a large proportion of the summonses adjourned into Court for argument the applicants are trustees of a will or settlement who ask the Court to construe the instrument of trust for their guidance, and in order to ascertain the interests of the beneficiaries, or else ask to have some question determined which has arisen in the administration of the trusts. In cases of this character I regard the costs of all parties as necessarily incurred for the benefit of the estate, and direct them to be taxed as between solicitor and client and paid out of the estate. It is, of course, possible that trustees may come to the Court with due cause. A question of construction or of administration may be too clear for argument, or it may be the duty of trustees to inform a claimant that they must administer their trust on the footing that his claim is unfounded, and leave him to take whatever course he things fit. But, although I have thought it necessary sometimes to caution timid trustees against making applications which might with propriety be avoided, I act on the principle that trustees are entitled to the fullest possible protection which the Court can give them, and that I must give them credit for not applying to the Court except under advice which, though it may appear to me unsound, must not be readily treated as unwise. I cannot remember any case in which I have refused to deal with the costs of an application by trustees in the manner above mentioned.

There is a second class of cases differing in form, but not in substance, from the first. In these cases it is admitted on all hands, or it is apparent from the proceedings, that although the application is made, not by trustees (who are respondents), but by some of the beneficiaries, yet it is made by reason of some difficulty of construction, or administration, which would have justified an application by the trustees, and it is not made by them only because, for some reason or other, a different course has been deemed more convenient. To cases of this class I extend the operation of the same rule as is observed in cases of the first class. The application is necessary for the administration of the trust, and the costs of all parties are necessarily incurred for the benefit of the estate regarded as a whole.

There is yet a third class of cases differing in form and substance from the first, and in substance, though not in form, from the second. In this class the application is made by a beneficiary who makes a claim adverse to other beneficiaries, and really takes advantage of the convenient procedure by originating summons to get a question determined which, but for this procedure, would be the subject of an action commenced by writ, and would strictly fall within the description of litigation. It is often difficult to discriminate between cases of the second and third classes, but when once convinced that I am determining rights between adverse litigants I apply the rule which ought, I think, to be rigidly enforced in adverse litigation, and order the unsuccessful party to pay the costs. Whether he ought to be ordered to pay the costs of the trustees, who are, of course, respondents, or not, is sometimes open to question, but with this possible exception the unsuccessful party bears the costs of all whom he has brought before the Court.'

47. In McDonald v Horn [1995] 1 All ER 961, Hoffmann J (with whom Hirst and Balcombe LJJ agreed), referred to that classification and observed that it is also sometimes difficult to discriminate between the first and third categories: see at 971.

48. In D'Abo v Paget [2000] WTLR 863, Mr Lawrence Collins QC (as he then was) held that the Re Buckton guidelines had not been superseded by the CPR but noted that they were never more than guidelines and that 'a more robust attitude' to costs is now appropriate, having regard to the overriding objective under the CPR. In Singapore Airlines Ltd v Buck Consultants Ltd [2011] EWCA Civ 1542, [2012] 2 Costs LO 132, Arden LJ (with whose judgment Pill LJ and Sir Mark Potter agreed) held (at [75]) that the categories of proceedings enumerated in Re Buckton were not closed. And in IBM United Kingdom Pensions Trust Ltd v Metcalfe [2012 EWHC 125 (Ch), Warren J stated, at [20]:

'There is always room ... for an exceptional case to be dealt with on its own facts; and indeed, when a case does not fall neatly within any of the Buckton categories, the court must exercise its statutory jurisdiction in the way it considers best to achieve fairness and justice.'"

16. I was also referred to Davies v Watkins [2012] EWCA Civ 1570, in particular paragraphs [23] to [27] and paragraph [50], which state as follows:

"23. From that decision [Re Beddoe [1893] 1 Ch 547] has come the label 'Beddoe application' for an application to the court for directions as to whether a trustee should bring, continue or defend proceedings as such. Such an application is, however, only a particular example of the sort of application which trustees can make to the court for guidance if they are in doubt as to what course to take in the execution of the relevant trusts. Such applications may seek directions, for example, as to whether to accept an offer to purchase a trust asset, or whether to take particular steps to sell such an asset. Issues on which the court's directions are sought may often arise where there is a conflict between the positions or interests of two or more beneficiaries on the point. A paradigm example arises where the defendant to possible proceedings is a beneficiary and other beneficiaries have a different interest in the outcome of the proceedings.

24. The conflict of interest on the part of a beneficiary who is a potential defendant to proceedings by the trustee is reflected by the fact that, contrary to the normal rule, not all the evidence will be served on that defendant (as happened here) - so as not to disclose to him privileged material which he would not otherwise be entitled to see - and that defendant may be excluded from part of the hearing at which such material is referred to: see Re Moritz [1960] Ch 251.

25. If the court directs that the trustee should commence, or continue, proceedings against a defendant beneficiary, then those proceedings would normally be entirely separate (in whatever court they are brought) and would be governed by the normal rules as to hostile litigation, including the applicable costs rules.

26. As regards the costs of the application for directions, the normal rule is that, absent improper conduct, the costs of the trustee and of the beneficiary defendants will be paid out of the trust fund. So far as the trustee is concerned, this is a particular example of the general proposition now set out in section 31(1) of the Trustee Act 2000:

"(1) A trustee—

(a) is entitled to be reimbursed from the trust funds, or

(b) may pay out of the trust funds,

expenses properly incurred by him when acting on behalf of the trust."

27. By virtue of section 35 of that Act, the same applies to personal representatives. …

50. All in all, it seems to me that there is nothing in the points relied on by Mr Ascroft, or by Judge Chambers in his judgments, to justify treating the costs of the Beddoe proceedings, as incurred in 2008, in any different way from the normal order for proceedings of that kind, which is that the trustee is entitled to his costs out of the fund, on the indemnity basis and so, in principle, are the defendant beneficiaries. In practice, because of how the estate has turned out, there is nothing out of which either Mr Davies or Mr Ian Watkins can be paid, but that is the starting point of the analysis."

Mr Feltham, for the Personal Injury Claimants, Mrs Peacocke, for the Trust, and Mr Cosedge, for the other beneficiaries, placed particular reliance on the guidance in that case.

17. Mr Cunningham, for the Bank, submits that on the Bank's application the costs order as between the Bank and the Trust should be that the Trust should pay 80 per cent of the Bank's costs of the application, on an indemnity basis. Mr Cunningham accepts that the Bank would have had to incur some costs in relation to the preparation and making of its application for approval of the Scheme in any event, and he says that the 80 per cent / 20 per cent split represents a fair distribution of the relevant costs, with 20 per cent representing the necessary costs which would have been incurred in any event and 80 per cent the increase in the costs necessitated by the Trust's opposition to the Bank's application.
18. In my judgment, that proposed split represents a fair division in relation to the costs of the Bank in respect of the making of its application. I should mention that so far as the 20 per cent of the costs in respect of that application which are not to be ordered to be paid by the Trust are concerned, the position agreed at the hearing was that they should be covered by the approach that has been adopted in relation to legal costs in the course of this administration up until now, namely that the court should grant a validation order in respect of them under section 284 of the Insolvency Act 1986 but without prejudice to the ability of others to contest (if it is later judged right to do so) the reasonableness of elements of those costs.
19. So far as the 80 per cent element is concerned, I consider that again the Trust has behaved in a way which is unreasonable in the context of this case and outside the norms of regular and appropriate conduct of litigation which the court would expect. The aspect of this part of the case to which I attach the greatest weight in relation to the Trust's conduct is the Trust's failure to engage with the parties which had negotiated the terms of the Scheme in the period from June 2013, when the Trust was informed of the terms of the Scheme then under negotiation, and in particular in correspondence from 19 November 2013.
20. In my view, the Trust can fairly be said to have kept up its sleeve until this hearing the various points which it later sought to take on the Scheme in the course of the hearing. By letter dated 19 November 2013 from one of the firms of solicitors acting for the Personal Injury Claimants to PWT, for the Trust, the Trust was asked to confirm that it did not object to the Scheme negotiated between the parties or, if it did object, to please explain why it objected. The response to that was a letter from PWT dated 28 November 2013, in which PWT said:

"Our concerns regarding the scheme and the entire conduct of Osborne Clarke has been very clearly set out in the witness statement of Jo Summers of 5 November 2013. We note that you have received a copy of our application and accompanying witness statement from Osborne Clarke and therefore, we shall not send a further copy."

21. That was a reference to the witness statement of Ms Summers adduced in support of the Trust's own application to have the Bank removed as executor. The main points of objection to the Scheme raised in that witness statement were an objection that the Bank had behaved improperly by failing to place advertisements at an earlier point in time and that the Scheme would be ineffective because the Bank had negotiated with some of the potential personal injury claimants against Jimmy Savile's estate. PWT did not raise a range of other objections to the Scheme or points of drafting on it which were later taken at the hearing before me in February 2014.
22. In a further letter from solicitors acting for the Personal Injury Claimants, responding to this position of the Trust, it was stated:

"Further to previous correspondence, there are answers to the concerns expressed about the scheme in your witness statement. We are happy to discuss this with you if it will help or set them out in writing if you would prefer. If the latter applies it would assist if you could let us have a list of the reasons why you oppose entry into the scheme by the executor so that these can be addressed point by point.

We do not understand why you find it incredible that we should seek confirmation of your position. Your position as a beneficiary in relation to the scheme is obviously relevant."

23. In response to that, PWT wrote on 9 December 2013 to say:

"We do not think that further costs should be incurred in debating the merits of the scheme. You will be aware that we object in principle to costly discussions with some, but not all, adverse claimants, and prior to any proper advertisements for claims by those administering the deceased's estate."

24. Solicitors for the Personal Injury Claimants wrote again on 11 December 2013, saying:

"It is our view that it would help save costs, and reduce and/or identify the issues for the court if you would indicate your position in relation to the scheme and identify any concerns about it so that we can discuss and address them.

As for the points you mention, the scheme will apply to all the present claimants against the estate, and the effective cut off date will be as and when the judge sanctions payment under the scheme and distribution of any balance to beneficiaries without making a retention for future claims.

There is an issue for consideration by the judge as to whether there should be any form of advertisement that claims should be brought, if they are going to be brought, by a certain date. The question is what the judge requires in order to sanction payment and distribution without retention. As the payment and distribution will be sanctioned by the court the executor does not need to advertise under section 27 Trustee Act 1925. It is our view that, given the publicity that has attended both the uncovering of Savile as a serial rapist and sexual abuser, and the claims that have now been made against the estate by his victims, no further form of advertisement is necessary for payment and distribution to be sanctioned in due course, but it is a matter for the judge."

25. That letter did not elicit a response from the Trust explaining any further its objections to the Scheme.
26. On 17 December 2013, the Bank issued its application, appending the draft Scheme to it. Again, the Trust did not enter into correspondence to identify its objections to the Scheme or any points it wished to raise on it.
27. The 17 December 2013 application notice was the first time that the other beneficiaries had seen the detailed terms of the proposed Scheme, although they had been on notice that it was under negotiation. But so far as they were concerned, they also did not enter into correspondence to raise any detailed points on it or to explain their position in relation to the Scheme. Instead, the fifth defendant made a witness statement for the purposes of this hearing, allying herself with and endorsing the position adopted by the Trust and objecting to the Scheme as a futile and ineffective scheme.
28. Finally, by further letter from solicitors acting for the Personal Injury Claimants, dated 30 January 2014, they asked the Trust, in light of the witness statements on behalf of the executor and the Personal Injury Claimants, whether it would:

"... on reflection be able to agree that the best course is for your client's application against the executor to be withdrawn, and for agreement by the executor to enter into the scheme to be approved."

29. Reference was made in that letter to the desirability of making substantial savings of costs by a consensual hearing as opposed to what was then estimated to be a two-day dispute if the matter remained contested. The Trust was also warned that reference would be made to the correspondence on the question of costs if the Trust maintained its objections to the Scheme.
30. In my view, the Trust behaved unreasonably in the period from November 2013, in particular in failing to engage with the Bank, the Personal Injury claimants, the BBC and the Secretary of State regarding any points of objection it might have to the Scheme or any ways in which the drafting of the Scheme could be improved to take account of their concerns, without prejudice to any grounds of challenge to the making of a scheme at all. And in relation to those grounds of challenge which the Trust did advance, I consider that the Trust acted unreasonably, since they had no merit and, in particular, accorded no weight to the interests of the claimants against Jimmy Savile's estate nor to the ambit of the discretion of the Bank as executor, as I have already explained. The other points which eventually arose in relation to the drafting of the Scheme at the hearing could all, in my view, clearly have been resolved on a consensual basis and without litigation if the Trust had behaved properly and reasonably and had raised the points of detail which it wished to take in respect of the drafting of the Scheme a good time in advance of the hearing. As things emerged at the hearing, insofar as any of the drafting points raised by the Trust or the other beneficiaries were found to have merit, they were readily agreed to without significant argument by the Bank and the other parties to the Scheme.
31. In my judgment, therefore, in relation to the Bank's application for 80 per cent of its costs in relation to its application for approval of the Scheme, the appropriate basis on which those costs should be ordered to be paid by the Trust is on the indemnity basis. Again, the Bank and other parties made no application for payment of costs by the fifth defendant in relation to that application.
32. So far as the Bank's application is concerned, the Personal Injury Claimants also seek an order for their costs to be paid by the Trust and on an indemnity basis, but via an indirect route. (The Secretary of State did not seek an order for his costs in relation to this application). The Personal Injury Claimants, represented by Mr Feltham, submit that the court should make an order in their favour for payment of their costs in relation to the Bank's application out of the estate on an indemnity basis, with an order then made in favour of the estate against the Trust for recovery of a like sum in respect of costs by way of a Bullock order (Bullock v London General Omnibus Co. [1907] 1 KB 264). In that way, the practical effect of the order would be that the Personal Injury Claimants' costs of and in relation to the Bank's application for approval of the Scheme would be paid ultimately by the Trust on an indemnity basis.
33. In my judgment, the appropriate order for costs in relation to the Personal Injury Claimants' costs in relation to the Bank's application is that the Trust should be ordered to pay their costs directly on an indemnity basis, not on the indirect basis urged by Mr Feltham. And I consider that it is the full amount of the costs claimed by them in relation to the Bank's application (not just 80 per cent, as for the Bank) which should be covered by that order. That is on the footing that, in my view, it was only because of the contested nature of the eventual court application which had to be made that significant costs ultimately had to be incurred by the Personal Injury Claimants in relation to the Bank's application. Had matters been dealt with consensually, although the Personal Injury Claimants would have been necessary and proper parties to the application so that they could be bound by the order to be made by the court so as to protect the Bank going forward, they would not have had to incur significant costs in relation to that application. Therefore, whereas it was appropriate in relation to the Bank to make an order for only 80 per cent of its costs of its application to be met by the Trust, on the grounds that 20 per cent would have been incurred in any event, that reasoning does not apply in relation to the costs of that application sought to be recovered by the Personal Injury Claimants.
34. I do not accept Mr Feltham's submission that the appropriate order, as a first step, should be for the court to order that the Personal Injury Claimants should have their costs paid on an indemnity basis out of the estate. This is a case of an application by the Bank in the course of administration of an estate made as a matter of procedure under CPR Part 64. However, so far as the Personal Injury Claimants are concerned, in the circumstances of this case it has evolved into (amongst other things) a form of adversarial litigation as between them and the Trust which is more naturally, in my view, to be categorised within the third class of case contemplated in the Buckton judgment.
35. In relation to the question whether a scheme of the character which was negotiated between the Bank and the Personal Injuries Claimants should be approved and put into operation, the Bank had adopted the position by its application that it regarded the making of such a scheme as something in the interests of the due administration of the estate and for which it would actively argue on its application. As I have said, the Personal Injury Claimants, like the Trust and the other beneficiaries, were necessary and proper parties to that application, but it does not follow that it was necessarily the case that they could expect then to participate and litigate at the cost and expense of the estate in a manner directed, in substance, to promoting their own interests in making claims against the estate.
36. So far as the due administration of the estate was concerned, the Personal Injury Claimants could simply have relied on the position being adopted by the Bank and the Bank's willingness to present a positive case to the court that the court should respect the Bank's judgment as executor that, in the interests of the proper administration of the estate, the Scheme should be entered into. Their substantive involvement beyond that on the Bank's application was for the predominant purpose of furthering their own interests rather than the interest of the due administration of the estate for the benefit of all who might have claims against it. In my view, whilst the Personal Injury Claimants were entitled to come and to seek to be heard in court on the Bank's application, in doing so they were seeking to promote their own self-interests rather than making a direct contribution to the due administration of the estate such that it would be just and appropriate to make an order requiring the estate to meet their costs of doing so.
37. This is a case where one should acknowledge the difficult boundary which can exist between the different categories of case contemplated in Buckton. In some cases where there is contested litigation regarding, for example, the proper construction of a will or how an estate should be managed or administered, it may be appropriate for the contesting beneficiaries or others interested in the estate, such those like the Personal Injury Claimants who are interested in the administration of the relevant estate (because it may prove to be insolvent), to have their costs met out of the estate itself by reason of the appropriate contribution that is made to the proper administration of the estate by their respective interventions. But that is where the contribution made by them to that proper administration is such as to make it just and appropriate for them to claim their costs on an indemnity basis out of the estate. That seems to me the sort of position which is contemplated in the first category of case contemplated in Buckton and, indeed, is the sort of case covered by the observations of the Court of Appeal in Davies v Watkins which I have set out above.
38. However, some cases where there is contest between persons who are interested in funds in an estate and have strong opposing individual interests to promote in arguing about what should happen in the administration of an estate will shade more into the third class of case contemplated in Buckton, where the appropriate approach to such litigation is to regard it as closer in kind to the paradigm of ordinary adversarial litigation between those opposing parties, where it is the opposing parties (but not the estate itself) which should bear the risks and costs of litigating out the dispute between them.
39. In my judgment, in the circumstances of this case, that is the class of case which provides the best and most appropriate categorisation for the position which has arisen between the Trust and the Personal Injury Claimants on the Bank's application, and it is the guidance given in relation to that type of situation which ought properly to be applied. I do not consider this is a normal CPR Part 64 case. It is a very unusual and complex case. There are strong cross-cutting personal interests as between the Trust and the beneficiaries on the one side and the Personal Injury Claimants on the other. The litigation has assumed an aspect of direct hostile litigation between these two groups to further their own respective self-interests, and the costs position should reflect this.
40. An important factor, in my view, is that the Bank has itself come to the court positively seeking approval for the Scheme which it has negotiated in carrying out its role in administering the estate as it thinks best, and which it positively asserts on its application is the best and most appropriate way to carry forward the administration of the estate. The Bank did not simply come to court adopting a neutral stance to seek the court's guidance, and leaving it to the different contending parties to present the rival contentions to the court about how it should proceed. This feature of the case tends to highlight that to the extent the Trust and Personal Injury Claimants sought to be heard on the application by making submissions against each other, they did so primarily in furtherance of their own respective self-interests.
41. In relation to negotiation of the Scheme and in relation to their appearance on the present application, the Personal Injury Claimants were acting primarily with regard to their own private interests, which were in significant ways opposed to the general interests of the estate. In negotiating the terms of the Scheme, the Personal Injury Claimants sought to bargain for the most advantageous terms they could to bring forward claims against the estate which might or might not prove to be meritorious and which might or might not deplete the funds available in the estate to pay proper claims in respect of the estate whether by particular Personal Injury Claimants or by the beneficiaries under Jimmy Savile's will. Coming to court to argue for approval of the terms they had secured in negotiating the Scheme was an extension of pursuit of those private interests.
42. Accordingly, in my view, the Personal Injury Claimants had prominent cross-cutting interests and oppositional interests so far as the estate was concerned. So far as the due administration of the estate was in contemplation in these proceedings, it was the Bank making the relevant application seeking approval for the Scheme and which was the party which had assumed responsibility on behalf of the estate for arguing for that outcome. The Personal Injury Claimants were, as I have said, necessary and proper parties, as were the Trust and the beneficiaries, but they did not need to come to court to present arguments in the interests of the estate in order to secure the court's approval for a scheme which was said by the executor to be in the interests of the administration of the estate. It was always clear that, once it launched its application, that was a role that the Bank would be taking on and pursuing so far as the interests of the estate were concerned. Accordingly, in the unusual circumstances of this case, I do not think it can be said that the Personal Injury Claimants, by their participation in the proceedings relating to the Bank's application, have made a separate contribution to the due administration of the estate such that it is just and appropriate that the estate and all those claiming under it should prima facie bear their costs on an indemnity basis.
43. The substance of the matter is that the Personal Injury Claimants have been in court pursuing their own private interests in having the scheme approved. I consider that the circumstances of this case are materially different from those contemplated in a case such as Davies v Watkins. That case was concerned with a Beddoe application in which the interests of persons claiming against the interests of beneficiaries who also had claims against the estate and would be claiming against the executor had to be taken into account in deciding what was the appropriate course to be taken by the executor in the due administration of the estate. It was a case in which one could more readily see that the participation of the defendant beneficiaries, whose interests were in some respects opposed to those of the executor and whose interests needed to be taken into account properly by the court in deciding how the estate should be administered, were proper parties making a separate and distinct contribution to consideration by the court of the appropriate way forward for the administration of the estate.
44. That is not the present position, as I have explained. In this case, so far as approval of the Scheme was concerned and so far as related to the due administration of the estate, the interests of the Personal Injury Claimants were fully and properly covered by the position adopted and the submissions made by the Bank. Insofar as they wanted to come to court to reinforce points made by the Bank, as they did, I consider that the natural inference is that they did that more in pursuit of their own private interests rather than to make a separate and distinct contribution of value from the perspective of the due administration of the estate. In these circumstances, it does not appear to me to be just and appropriate that they should have the full cost of them deciding to act in that way paid out of the estate on an indemnity basis.
45. In fact, in this case it is unlikely to matter very much, since I consider it is appropriate to make an order for the Trust to pay the costs of the Personal Injury Claimants directly and on the evidence the Trust is solvent and will be able to satisfy that order. But one case test what ought to be the proper result by asking what should be the position if it turned out that the Trust was insolvent. if the Trust were not solvent, I think that would be a case where the conclusion would be clear that it would be unjust to expect the estate to bear fully and on an indemnity basis the Personal Injury Claimants' costs of pursing their own self interests in relation to seeking the court's approval of the Scheme, as they have done.
46. However, as I have indicated, I do consider that in relation to the bank's application for approval of the Scheme, the Personal Injury Claimants were parties with a very direct interest in the outcome of that application, and that was obvious to the Trust. They had negotiated the scheme with the Bank and had a plain and strong interest to see it implemented in a proper and effective fashion. Their interests in relation to this application were, if anything, even more directly engaged than in relation to the Trust's removal application. It was entirely foreseeable to the Trust that they would wish to be heard to contest the Trust's arguments against the approval of the Scheme. They were in substance, in addition to the Bank, opposing parties in adversarial litigation precipitated by the Trust's position in relation to the Bank's application for approval of the Scheme.
47. In my view, as between the Personal Injury Claimants and the Trust, the costs in relation to the Bank's application should again follow the event. The Personal Injury Claimants had to instruct lawyers to attend the hearing of the Bank's application, because they did not know what points might be taken against the Scheme and its drafting by the Trust and the other beneficiaries. In my judgment it was reasonable and proportionate for them to attend in the way that they did. The Trust has failed in its arguments and the Personal Injury Claimants have succeeded, so the Trust should be ordered to pay their costs.
48. So far as the basis of assessment of their claim for costs is concerned, I consider again that indemnity costs should be ordered. I consider that the points I have already made regarding the Trust's unreasonable conduct of this part of the litigation apply here also and justify an indemnity cross order being made in favour of the Personal Injury Claimants as well.
49. Mrs Peacocke, for the Trust, also sought to maintain a claim that an order should be made for the Trust's cost of participation in the Bank's application for approval of the Scheme to be paid out of the estate on an indemnity basis. For this purpose she, like Mr Feltham in relation to the Personal Injury Claimants, referred to category 1 of the categories set out in Buckton and to Davies v Watkins.
50. I do not consider that it would be just or appropriate to make such an order in favour of the Trust for two reasons. First, as I have explained, I consider that the present case is more properly to be regarded as a Buckton category 3 case of simple adversarial litigation between the Trust and the Personal Injury Claimants, each side predominantly pursing its own self-interest, rather than seeking merely to make a helpful contribution to the due administration of the estate in a manner which ought to be recognised by the making of an order of the form that Mrs Peacocke now seeks.
51. Secondly, and in any event, even if the case were to be regarded as a Buckton category 1 case, I consider (for reasons that I have already explained) that the Trust has not acted in a reasonable and proper manner in relation to this part of the case. I consider that in the circumstances it would be highly unjust for the court to order that the Trust should recoup its costs in relation to the Bank's application out of the estate.
52. No order is sought by any party in respect of the bank's application against the fifth defendant. However, the fifth defendant seeks an order for payment out of the estate of her costs of and in relation to the Bank's application for approval of the scheme. Mr Cosedge, for these purposes, like Mr Feltham and Mrs Peacocke, relies on the principles which apply to the Buckton category 1 type of case and the guidance in Davies v Watkins. In my judgment, essentially for the same reasons that I have given in relation to the trust, it would not be just or appropriate to make an order in favour of the fifth defendant for payment of her costs in respect of the Bank's application out of the estate.
53. In relation to the Bank's application, the fifth defendant entered a witness statement in which she allied herself with the oppositional position adopted by the Trust. She, like the trust, kept other points in relation to the drafting and so forth of the Scheme up her sleeve until the hearing. In the litigation here, I consider that, first, her position is to be regarded as falling naturally within the Buckton category 3 type class of case, and that accordingly it would not be appropriate to make an order for payment of her costs out of the estate in relation to arguments on which she has lost. Secondly, and in any event, even if this were to be regarded as a Buckton category 1 case, for reasons similar to those already given in relation to the Trust, I do not consider that she has conducted the litigation in a proper and reasonable manner. Accordingly, her application for a costs order in her favour is dismissed.
54. In relation to the Bank's application for its costs, Mrs Peacocke has submitted that those should be reduced or that there should be a cross-claim for costs in favour of the Trust, by reason of the late provision of the Bank's skeleton argument and also of a note from Mr Witcomb of Counsel as to how the Scheme would operate. For reasons similar to those I have already given in relation to Mrs Peacocke's objections on late provision of the skeleton argument in respect of the removal application, I do not consider that it would be just or appropriate to make any reduction in the costs order to be paid in favour of the Bank by reason of these matters. Again, they do not, in my view, make any material difference whatever to the way in which the litigation developed or the outcome of the arguments.
55. Applications are made that the Trust be ordered to make payments on account of costs. It is appropriate so to order. The sums to be paid will be £100,000 in favour of the Bank, £100,000 in favour of the Personal Injury Claimants, and £18,000 in relation to the Secretary of State. I consider that these figures represent the sums which are very likely to be found to be due and recoverable on a taxation of costs, bearing in mind that what is in issue is the costs of a three-day hearing. Having reviewed the schedules to the degree that is possible and appropriate on an application of this kind for a payment on account, I consider that the sums claimed and the overall amounts appear reasonable and proportionate. The sums ordered to be paid take into account that the basis for assessment has been ordered to be the indemnity basis.
56. So far as the time for payment is concerned, I will allow the trustees of the Trust a short period of latitude to allow for the fact that their location is overseas. Payment will be within 21 days.
57. An application is made for a stay of the various orders that have been made. I am satisfied that it would not be just or appropriate to order a stay. I direct myself by reference to the relevant notes in the White Book at, in particular, paragraph 52.7.1. As Mr Block for the Secretary of State points out, in relation to the court's endorsement of the Scheme Mrs Peacocke has not even identified what possible grounds for an appeal there might be in relation to that, despite having had notice of the judgment in draft. Moreover, the court has made the orders that it has, including the timetable on which the Scheme is to be put into operation, in order to give effect to the interests of parties wishing to claim against the estate of Jimmy Savile in seeking to secure payment of any meritorious claims they may have as promptly as may be possible from the estate.
58. In my view, the grant of a stay in these circumstances would be contrary to the general approach that a court will not lightly deprive a party of the fruits of their litigation pending appeal unless there is some good reason for taking that course. I consider that no good reason has been shown. There is no suggestion that if a stay is not granted, the appeal will be stifled or anything like that. The Trust simply seeks to hold up the implementation of the orders that the court has made in respect of a case on which it has lost. I consider that it would be wrong and inappropriate for the court to grant a stay in those circumstances.