Brennan v Prior & Ors

Factual and Procedural Background

This opinion concerns an application by the Third to Sixth Defendants under CPR 40.12 (the "slip rule") seeking clarification or amendment of a costs order made on 26 September 2013 by Mr. Judge Herbert QC, sitting as a Deputy Judge of the High Court, following a probate trial concerning the will of the deceased. The key issue was whether the order limited the costs recoverable by the Third to Sixth Defendants from the Plaintiff to the amount of the pecuniary legacy left to the Plaintiff under the will.

The deceased died on 3 March 2011, leaving a homemade will executed in hospital. The First and Second Defendants were the executors. The Plaintiff, the deceased’s daughter, was left a pecuniary legacy of £100,000; the Fourth Defendant received a studio flat in France; and the residuary estate was divided equally among the Third to Sixth Defendants, the deceased’s siblings.

The Plaintiff challenged the will on grounds including lack of capacity, fraud, and undue influence, but the will was upheld by Mr. Judge Herbert QC. After judgment, costs were argued. Both the Executors and the Third to Sixth Defendants sought costs from the Plaintiff on an indemnity basis rather than from the estate alone. The Deputy Judge ordered costs payable by the Plaintiff, with detailed assessment on a standard basis up to certain dates and on an indemnity basis thereafter, and that such costs be payable out of the Plaintiff’s pecuniary legacy in priority to distribution to her, with an interim payment to the Executors.

During detailed assessment of the Third to Sixth Defendants’ costs, a Costs Judge raised the issue of whether the order limited the Third to Sixth Defendants’ recovery to the amount of the Plaintiff’s legacy remaining after payment of the Executors’ costs. The Costs Judge declined to issue an interim costs certificate pending clarification or variation of the order.

The Third to Sixth Defendants applied to Mr. Judge Herbert QC under CPR 40.12 to correct what they alleged was an accidental slip or omission in the order, seeking clarification that their entitlement to costs was not limited to the amount of the pecuniary legacy.

Following procedural steps and correspondence, including objections and requests for recusal by the Plaintiff, the matter was eventually heard by a different judge due to Mr. Judge Herbert QC’s retirement.

Legal Issues Presented

1. Whether the costs order made on 26 September 2013 limited the Third to Sixth Defendants’ recovery of costs from the Plaintiff to the amount of her pecuniary legacy under the will.
2. Whether the order contained an accidental slip or omission justifying correction or amendment under CPR 40.12 (the slip rule).
3. If an ambiguity or error existed, whether the court should exercise its inherent power to clarify or amend the order to reflect the true intention of the court and the parties.

Arguments of the Parties

Appellant's (Third to Sixth Defendants') Arguments

• The order did not limit their recovery of costs to the amount of the pecuniary legacy.
• The absence of any such limitation was the clear intention of the Deputy Judge and counsel at the time of the order.
• The slip rule under CPR 40.12 applies to correct accidental slips or omissions, including ambiguities that fail to reflect the court’s true intention.
• They sought clarification or amendment to remove any ambiguity, so their costs were not capped by the legacy amount.

Appellee's (Plaintiff's) Arguments

• The order, properly construed, limited her liability for costs to the amount of the pecuniary legacy.
• Paragraphs 5 and 19 of the Deputy Judge’s costs judgment suggested only that costs were to be paid “in the first instance” from the legacy, with no indication of personal liability beyond that.
• The terms of the order were agreed by counsel, and the Deputy Judge’s later note amounted to impermissible second thoughts.
• The slip rule does not permit substantive changes or second thoughts; the proper remedy would be an appeal, which was out of time.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by interpreting the order objectively, applying established principles of document interpretation. It considered the natural and ordinary meaning of the order's language, the relevant provisions, the purpose of the clauses, the factual background known to the parties, and commercial common sense, while disregarding subjective evidence of intention.

The court found no suggestion during submissions that the Third to Sixth Defendants agreed to limit their recovery of costs to the Plaintiff’s pecuniary legacy. Counsel for those Defendants had sought indemnity costs and acknowledged that the Executors’ costs would likely exhaust most of the legacy, indicating they would "do their best" with any balance.

The costs judgment was examined in detail. The court rejected the Plaintiff’s interpretation that the Deputy Judge intended to limit costs recovery to the amount of the legacy. The judgment’s language did not exclude full recovery beyond the legacy, and the Deputy Judge’s award of indemnity costs supported this conclusion.

The court also noted the post-judgment exchange where the Plaintiff expressed concern about losing her home due to costs liability, which the Deputy Judge did not correct or reassure her about, implying personal liability beyond the legacy.

Paragraph 3(1) of the order made the Plaintiff liable for the Third to Sixth Defendants’ costs without limitation. Paragraph 3(2) referred to payment out of the pecuniary legacy only if costs were not previously paid, which the court interpreted as allowing recovery from other sources, including personal liability.

The absence of a provision equivalent to paragraph 2(4) (which allowed recovery from the residuary estate if the Plaintiff did not pay the Executors’ costs) was explained by the fact that the Third to Sixth Defendants did not seek costs from the Executors, so no alternative source existed for their costs beyond the Plaintiff.

The court concluded there was no ambiguity in the order when read in context and with background knowledge. The Costs Judge’s doubts arose from not having the full background.

Although the court found no need to apply the slip rule to correct any error, it agreed with Mr. Judge Herbert QC’s view that if ambiguity had existed, the slip rule would have been properly used to give effect to the original intention.

The court rejected the Plaintiff’s argument that the Deputy Judge’s note was impermissible second thoughts, noting that the note accurately reflected the original intention and was a sensible procedural step.

Finally, the court exercised its inherent power to amend the order by adding wording clarifying that paragraph 3(2) does not limit the Plaintiff’s liability for costs pursuant to paragraph 3(1), thereby putting the matter beyond doubt.

Holding and Implications

The court held that the Plaintiff’s personal liability for the costs of the Third to Sixth Defendants under paragraph 3(1) of the order is not limited by reference to the amount of her pecuniary legacy. The court further ordered, pursuant to its inherent power, that the order be amended to add the words "Without limiting the amount of the Claimant's liability for costs pursuant to sub-paragraph (1) above" at the beginning of paragraph 3(2) to clarify this position.

The direct effect of this decision is that the Plaintiff remains personally liable for the full amount of assessed costs payable to the Third to Sixth Defendants, without any cap linked to her legacy under the will. No new precedent was set beyond the clarification and application of existing principles regarding the slip rule and order interpretation.