Griffin v Higgs & Ors

Factual and Procedural Background

The dispute arises from the estate of Mrs Folkes, who died in December 2014, leaving assets including shares in steel and real estate companies, a large family home called Stourton Hall, and a holiday home at Pen-y-Graig. Mrs Folkes appointed three executors and trustees ("the Executors"), two solicitors and an accountant who had acted for her for many years. Her will established discretionary trusts for her children and grandchildren, with specific provisions regarding payments and distribution of income and capital.

Following Mrs Folkes' death, the Claimant issued a claim in July 2016 seeking the removal of the Executors and appointment of an independent administrator, alleging conflicts of interest and concerns about transactions during Mrs Folkes' lifetime. The Fourth Defendant and his children ("Con and Con's Children") applied to be joined as defendants and were ordered joined by the Deputy Master. A three-day trial was held, resulting in a judgment replacing the Executors with an independent administrator, though not the initially proposed solicitor. Subsequently, a Costs Order was made dividing liability between two periods: before and after 24 February 2017, reflecting changes in the Executors' stance during the litigation.

Legal Issues Presented

1. Whether the Executors should be removed and replaced by an independent administrator due to conflicts of interest and alleged misconduct.
2. The appropriate allocation of costs among the parties, including whether the Executors should be indemnified by the estate for their costs.
3. Whether the Claimant was the successful party for the purposes of costs despite not succeeding on all allegations.
4. The scope and principles governing appeals against costs orders in the context of contested removal of executors.

Arguments of the Parties

Claimant's Arguments

• Alleged that Mrs Folkes was subject to undue influence and financial abuse by Con over many years, resulting in substantial depletion of her estate.
• Asserted that the Executors were conflicted due to their longstanding professional relationships with Con and his family, and thus could not impartially investigate transactions.
• Requested removal of the Executors and appointment of an independent administrator to investigate lifetime transactions and protect the estate.
• Contended that the Executors should not be indemnified for costs as they unreasonably resisted removal despite conflicts of interest.

Fourth Defendant and Con's Children’s Arguments

• Opposed the removal of the Executors, arguing there was no justifiable legal basis for their removal.
• Maintained that the Executors should remain in place in accordance with the deceased's wishes.
• Contended that the Claimant was not the successful party as she failed to establish most allegations and did not secure appointment of the initially requested administrator.
• Argued the Executors’ costs should be borne by the estate, not by Con and Con's Children.

Executors' Arguments

• Asserted entitlement to indemnity from the estate for costs reasonably incurred in defending the claim.
• Contended that they acted reasonably in resisting removal and should not be personally liable for costs absent egregious misconduct.
• Argued that their neutral stance after 24 February 2017 justified indemnity for costs during that period.
• Maintained that Con and Con's Children bore no responsibility for their decisions and thus should not be ordered to pay Executors' costs.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Larke v Nugus [2000] WTLR 1033	Solicitors must respond to reasonable requests for information regarding testamentary capacity and undue influence.	Recognised the correspondence requesting information from Executors as a proper step in assessing validity of the will.
Jones v. Longley [2015] EWHC 3362 (Ch)	Executors’ entitlement to indemnity for costs and conditions under which they may be deprived of it.	Adopted the principle that executors are entitled to indemnity unless they act unreasonably in resisting removal.
Kain v Hutton [2008] NZSC 61	Trustees’ right to indemnity and circumstances affecting liability for costs.	Accepted that trustees acting honestly and reasonably should be indemnified; unreasonable conduct may lead to personal cost liability.
BA v. Verite Trust Company Ltd [2008] JRC 150	Unreasonable opposition to removal of trustees leads to costs order against them and loss of indemnity.	Supported removal of Executors’ indemnity and ordering them to pay costs due to unreasonable resistance.
Hospira UK Ltd. v. Novartis AG [2013] EWHC 886 (Pat)	Guidance on costs orders, including issue-based costs and “suitably exceptional” circumstances.	Applied the three-question test to determine appropriateness of costs orders against parties.
Fox v Foundation Piling Ltd [2011] EWCA Civ 790	Costs principles where claimant wins on some issues and loses on others.	Confirmed that partial success does not normally justify depriving claimant of costs.
G. v G. (Minors: Custody Appeal) [1985] 1 WLR 647 (HL)	Standards for appellate interference with discretionary costs decisions.	Emphasised wide discretion and caution in overturning trial judge’s costs decisions.
AEI Rediffusion Music Ltd v Phonographic Performance Ltd [1999] 1 WLR 1507	Appellate review of costs discretion and requirement for reasonable balancing of factors.	Supported the principle that appellate courts should not lightly interfere with costs decisions.
Budgen v Andrew Gardner Partnership [2002] EWCA Civ 1125	Recognition that even winners often lose on some issues; costs orders should reflect this.	Supported the approach that partial losses do not usually affect overall costs entitlement.
Travellers' Casualty v Sun Life [2006] EWHC 2885 (Comm)	Consideration of issue-based costs orders and conduct in litigation.	Confirmed that unsuccessful points may justify costs consequences if unreasonably taken.
Passingham v Sherborn (1846) 50 ER 407	Costs consequences for trustees resisting removal without reasonable cause.	Illustrated that trustees acting reasonably in resisting removal are entitled to costs.
Attorney-General v Murdoch (1856) 69 ER 910	Trustees’ conduct affecting costs orders on removal applications.	Demonstrated that improper conduct can lead to costs orders against trustees.
Re Skinner [1904] 1 Ch 289	Costs orders against trustees for gross neglect or wholly indefensible conduct.	Applied threshold for depriving trustees of costs indemnity based on conduct.
Hunter v Hunter [1938] NZLR 520	Discretion to deprive trustees of costs or order them to pay costs when resisting removal.	Confirmed that costs consequences depend on case-specific circumstances.
Assicurazioni Generali SpA v Arab Insurance Group [2003] 1 WLR 577	Standards for appellate review of discretionary decisions.	Reinforced the principle that appellate interference requires error of principle or unreasonable decision.
Piglowska v Piglowski [1999] 1 WLR 1360	Appellate deference to trial judge’s discretion, including costs decisions.	Emphasised respect for trial judge’s assessment absent clear error.

Court's Reasoning and Analysis

The court undertook a detailed factual and legal analysis of the allegations raised by the Claimant and the conduct of the Executors. It applied a test to each allegation to determine whether there was a sufficient evidential basis to justify investigation by an independent administrator. Most allegations were found lacking sufficient evidence or were dismissed, but a few concerning family chattels and related transactions justified the appointment of an independent administrator.

The court recognized the Executors’ conflicts of interest arising from their professional relationships and involvement in transactions under scrutiny, concluding that their removal was necessary to protect the estate and beneficiaries. The court emphasized that removal is a drastic step but justified here due to conflicts and potential risk to the estate.

Regarding costs, the court applied established principles: executors are generally entitled to indemnity for costs properly incurred unless they acted unreasonably in resisting removal. The court found the Executors acted unreasonably by opposing removal despite clear conflicts known since 2011 and should have adopted a neutral stance earlier. Consequently, the Executors were ordered to pay the Claimant’s costs for the initial period and were denied indemnity from the estate for those costs.

For the subsequent period after the Executors adopted a neutral stance, the court held the Executors were not entitled to indemnity from the estate but that Con and Con's Children, who opposed removal throughout, should pay the Executors' costs incurred during that period. The court rejected arguments that the Executors’ neutral position justified estate indemnity for those costs, noting the ongoing opposition by Con and Con's Children was the cause of continued litigation.

The court carefully considered the Claimant’s partial success and the interconnected nature of the allegations, concluding that the Claimant was the successful party overall for costs purposes, despite losing on many issues. The court also addressed the scope of appeal on costs orders, emphasizing the wide discretion of the trial judge and the high threshold for interference on appeal.

Holding and Implications

The court ALLOWED IN PART AND DISMISSED IN PART the appeals against the Costs Order.

The key holdings are:

• The Claimant was the successful party for the purposes of costs, having secured the removal of the Executors and appointment of an independent administrator.
• The Executors acted unreasonably in resisting removal and are ordered to pay the Claimant’s costs for the period up to 24 February 2017 and are denied indemnity from the estate for those costs.
• The Executors are entitled to indemnity from the estate for costs reasonably incurred after adopting a neutral stance from 24 February 2017; however, Con and Con's Children must pay the Executors’ costs for that period due to their opposition to removal.
• Costs orders against Con and Con's Children include costs incurred before they were formally joined as defendants, due to their active opposition and involvement.

No new legal precedent was set; the decision applies established principles on executors’ removal, costs, and indemnity, emphasizing the importance of neutrality by executors in contested will disputes and the consequences of unreasonably resisting removal.