Executor’s Costs Recoverable from a Beneficiary’s Share Where Unfounded Fraud Allegations and Obstruction Necessitate Court Approval of Accounts

Case: Dillon v Connolly [No.2] (Approved) [2026] IEHC 201 (High Court of Ireland, Stack J., 27 March 2026)

1. Introduction

This judgment concerns costs following an earlier decision approving estate accounts ([2025] IEHC 424, “the principal judgment”). The applicant, David Dillon, was the sole proving executor in the estates of Matthew Stephen Connolly and Elizabeth Connolly. The respondent, Matthew James Connolly, a beneficiary, opposed the applicant’s claim that the costs of the accounts-approval application should be paid from the estate and further sought to have the executor bear the costs personally.

The dispute arose from the respondent’s nine objections to draft estate accounts. Only three objections succeeded: (1) treatment of the late Mrs. Connolly’s rings, (2) treatment of a Glengarriff plot known as “The Dell”, and (3) certain fees of Reddy Charlton LLP relating to responding to an inadmissible complaint made by the respondent to the Legal Services Regulatory Authority (LSRA). The remaining objections were found baseless.

The central issues in this costs judgment were: (i) whether the executor should receive his costs out of the estate, and (ii) whether those costs should be met from the respondent’s share of the residue (i.e., a beneficiary-borne costs order).

2. Summary of the Judgment

Stack J. held that:

  • The executor was entitled to his costs out of the estate of Matthew Connolly, deceased, because seeking court approval was necessary in light of the breakdown between executor and respondent and the respondent’s refusal to sign protective documentation.
  • The executor was also entitled to have those costs paid from the respondent’s share in Mr. Connolly’s estate, primarily because the litigation was necessitated by the respondent’s conduct, including resiling from earlier positions, making a frivolous/vexatious LSRA complaint, and making groundless allegations of fraud.
  • No order was made affecting Mrs. Connolly’s estate, given that the greater part passed into Mr. Connolly’s estate.
  • No order was made for the respondent’s expenses (he was self-represented and, in any event, his conduct drove the proceedings).

3. Analysis

3.1 Precedents Cited

(a) Saunders v. Vautier (1841) 1 Cr. & Ph. 240

Although the rings issue was not the formal ratio on costs, the court’s treatment of beneficiary agreement is important context. Stack J. noted that, in trust law, adult, fully capable beneficiaries acting unanimously can direct the application of trust property (the Rule in Saunders v. Vautier), as discussed in Keane J., Equity and the Law of Trusts in Ireland. On “first principle”, the judge reasoned that a similar practical constraint must apply in estate administration: where there is unanimous beneficiary agreement, a personal representative is not acting unreasonably in proceeding on that basis (subject to obligations such as Revenue returns).

This mattered for costs because the court viewed the respondent’s later insistence on “the strict letter of the law” (after earlier agreement) as a key feature of the dispute’s escalation—supporting the conclusion that the executor’s recourse to court was justified and that the respondent’s conduct was causative of unnecessary costs.

(b) O'Connor v. Markey [2006] IEHC 219, [2007] 2 I.R. 194

This was central to the executor’s entitlement to costs from the estate. Stack J. relied on Herbert J.’s approval of a trustee-protection principle: trustees (and by analogy personal representatives) are entitled to the court’s protection when acting prudently in contentious circumstances. The citation reinforced that where litigation is brought to obtain directions/approval in the face of beneficiary hostility or threatened proceedings, the fiduciary’s costs are ordinarily a proper estate expense.

(c) In re Buckton; Buckton v. Buckton [1907] 2 Ch. 406

Quoted through O'Connor v. Markey, Kekewich J.’s statement—I act on the principle that trustees are entitled to the fullest possible protection which the court can give them—supported the view that the executor’s application for approval of accounts was protective, appropriate, and cost-justified, especially given the respondent’s hostility and threats of suit.

(d) Howley v. McClean [2025] IECA 77

This authority was pivotal to the second limb of the costs order: shifting the executor’s costs onto the respondent’s share. Stack J. invoked the Court of Appeal’s condemnation of vitriolic but groundless allegations and its emphasis that courts should take “pertinent and proportionate steps” to deter such conduct. Although Howley addressed tools such as elevated costs bases, Stack J. used it to support a principle of costs consequences for baseless fraud allegations, and to justify a beneficiary-bearing order where the beneficiary’s conduct drives disproportionate estate litigation.

(e) Mortimer and Sunnocks, Executors, Administrators and Probate (22nd ed.)

While not a judicial precedent, this text was used to ground the court’s finding that it is normal and legitimate for a personal representative to seek a receipt and for residuary legatees to approve accounts—here by signing a Confirmation and Indemnity. This undermined the respondent’s claim that such a request was “coercion” and supported the conclusion that the executor’s insistence on protection was orthodox and reasonable.

3.2 Legal Reasoning

(a) Why costs were payable out of Mr. Connolly’s estate

The court’s reasoning was anchored in necessity and prudence:

  • Risk of litigation: The judge accepted that the respondent would likely have sued if the executor distributed the residue as proposed without judicial approval.
  • Breakdown of relations: The relationship had “completely” broken down; the executor could not safely proceed informally.
  • Refusal to sign protective documentation: The respondent’s refusal to sign the Confirmation and Indemnity signalled continuing objection and heightened risk to the executor.
  • No concealment: Other beneficiaries signed based on draft accounts containing notes about the rings and “The Dell”; this supported the executor’s good faith and transparency.

Accordingly, the application for approval of accounts was not a discretionary indulgence but a protective step that the court considered necessary. That necessity is what justified treating the executor’s costs as properly payable from the estate.

(b) Why costs were payable from the respondent’s share

Stack J. went further and made what is, in practical terms, a beneficiary-specific costs consequence:

  • Groundless fraud allegations: The respondent repeatedly alleged dishonesty, deception, and bad faith (including claims about the executor’s “no intention” to return a contingency fund). The court found “no basis whatsoever” for these accusations.
  • Inflammatory and abusive communications: The respondent’s email and affidavits contained “scandalous allegations”, “invective”, and “grossly intemperate” assertions—factors relevant to costs as reflecting unreasonable litigation conduct.
  • Spurious points escalating costs: The Leeds Building Society “red herring” was pressed despite the account having been emptied before death and thus irrelevant to the estate.
  • Resiling from earlier positions: The respondent initially accepted (or even pressed) informal family arrangements regarding the rings and “The Dell”, then later insisted on strict accounting positions, generating litigation over matters that had been consensual.
  • LSRA complaint: The respondent’s complaint against the estate solicitors was dismissed as frivolous and vexatious (notably because he was not their client). Even though the court held the solicitors’ response costs were not properly charged to the estate in the accounts, the judge treated the complaint as a causative and blameworthy driver of costs overall.
  • Disproportionate outcome: The net financial correction achieved by the successful objections was about €42,146.30, increasing each sibling’s share by €10,536.58—tiny relative to the scale of allegations and the two-day hearing. This disproportion supported the conclusion that the proceedings were needlessly amplified by the respondent’s approach.

These factors led to a causation-based conclusion: the litigation was “necessitated by the respondent’s conduct”. That justified an order that the executor’s costs, though payable out of the estate in the first instance, should ultimately fall on the respondent by being recouped from his share of the residue.

(c) Why no order was made against Mrs. Connolly’s estate

The court took a pragmatic estates-and-residue approach: because the greater part of Mrs. Connolly’s estate passed into Mr. Connolly’s estate, Stack J. made no order affecting her estate. This avoided unnecessary complexity and reflected the reality of where the economic burden would lie.

3.3 Impact

(a) Stronger deterrence against “fraud as a tactic” in probate disputes

The judgment signals that in contentious administration applications, unfounded allegations of fraud and deceit are not mere rhetoric; they can materially affect costs outcomes, including by exposing a beneficiary’s share to depletion. This aligns High Court practice with the Court of Appeal’s emphasis in Howley v. McClean on deterring vitriolic, groundless allegations.

(b) Reinforcement of protective court applications by executors

Executors faced with credible threats of proceedings, refusal to approve accounts, or a dysfunctional beneficiary relationship are encouraged to seek court approval without fearing personal exposure to costs—provided they have acted transparently and prudently. The judgment strengthens the idea (via O'Connor v. Markey and In re Buckton; Buckton v. Buckton) that the court will protect fiduciaries who seek directions in good faith.

(c) Practical recognition of unanimous beneficiary arrangements (and the costs risk of reversing course)

While not framed as a definitive new rule, Stack J.’s reasoning suggests that where beneficiaries unanimously agree to an informal in specie distribution (e.g., jewellery to daughters), an executor may reasonably proceed on that basis. If a beneficiary later resiles and forces formal litigation, this reversal can be relevant to where costs should fall.

4. Complex Concepts Simplified

  • “Costs out of the estate”: The legal fees of the executor (and sometimes other parties) are paid from estate assets, reducing what beneficiaries ultimately receive. This is common where the executor reasonably needs the court’s guidance or protection.
  • “Costs from the respondent’s share”: Instead of all beneficiaries bearing the cost (through a reduced estate), the court can direct that the executor’s costs be recouped specifically from the share of the beneficiary whose conduct caused the litigation.
  • Approval of estate accounts: A court process where an executor asks the court to confirm the correctness of accounts and approve distribution, particularly useful where a beneficiary disputes figures or threatens proceedings.
  • Confirmation and Indemnity: A document by which beneficiaries acknowledge the accounts/distribution and promise not to sue the executor later about the same matters. The court treated this as an orthodox protective step, not “coercion”.
  • Rule in Saunders v. Vautier: If all beneficiaries are adults and agree, they can direct how trust property is dealt with (even if a trust instrument says otherwise). The court viewed this as analogous, in principle, to unanimous beneficiary agreements in estate administration.
  • “Frivolous and vexatious” complaint: A complaint deemed to lack merit and to be an abuse of process or designed to harass. The LSRA dismissal on this basis was treated as relevant background to costs responsibility.

5. Conclusion

Dillon v Connolly [No.2] is a pointed costs decision in estate administration litigation. It confirms that an executor who prudently seeks court approval of accounts amid beneficiary hostility is entitled to costs out of the estate, and it underscores that where a beneficiary’s conduct—particularly groundless fraud allegations, obstruction, and disproportionate dispute-making—drives the proceedings, the court may fairly direct that the executor’s costs be borne from that beneficiary’s share. The judgment therefore both protects conscientious executors and signals meaningful deterrence against incendiary, unsupported accusations in probate disputes.