Goodwin v Avison & Others  EWHC 2356 (Ch)
The High Court has provided a helpful restatement of the costs principles engaged where a will challenge is abandoned mid-trial. In essence, two costs principles apply: (1) if the Testator's conduct has led to the litigation, an unsuccessful party should get their costs out of the estate and (2) if there were reasonable grounds for challenging the will, then each party should bear their own costs. If neither principle applies, the likely outcome is that unsuccessful party should pay its and the successful party's costs. The challenge for a trial judge is that that assessment of (1) and/or (2) occurs having only part heard the evidence. In this case, HHJ Davis-White QC (sitting as a High Court Judge) was satisfied that the unsuccessful Defendants must pay their own and the Claimant's costs.
Thomas Goodwin ("the Testator"), was found by the Judge to be a 'wily' Yorkshireman, who made promises he did not keep and told people things they wanted to hear. He was a successful businessman, whose estate was worth between £3-£4 million, including a number of farms.
The Testator had protracted and bitter breakdowns in his relationships, including with his son, Gary (“the Claimant”) and one of his daughters, Jacqueline (D1), which in the latter case had led to compromised proprietary estoppel proceedings in the Testator's lifetime.
In 2017, the Testator decided to make a new will ("the 2017 Will"), which he initially did by amending an existing will with the help of the Claimant's then girlfriend Ms Grime, which was later formalised and executed with the help of solicitors.
The claim was issued in May 2019 to pronounce the 2017 Will in solemn form but resisted by D1 who counterclaimed on the basis of (a) lack of due execution; (b) lack of knowledge and approval and (c) undue influence exerted by the Claimant and Ms Grime.
The remaining Defendants, D2-D5, were the children of D1. D2 initially did not admit due execution and required the 2017 Will be proved in solemn form, relying on CPR 57.5(5). D3-D5 adopted the defence and counterclaim of D1.
Following the report of a jointly instructed handwriting expert in March 2019, the Defendants abandoned their challenge to valid execution. However, D4 then decided to act in person, and in August 2020 was given permission by the trial judge to withdraw from this admission.
The position of the Defendants was thus different when the matter reached trial in August 2021.
On the sixth day of trial, the Judge was informed that the Defendants no longer challenged the 2017 Will. The Judge gave a short ex tempore judgment, stating he was satisfied that the terms of a consent order drafted by the parties were appropriate, and then gave a separate written judgment following costs submissions.
The Judge summarised the general principles for probate cists :
- The starting point is that the court has a discretion as to whether costs are payable by one party to another or from the estate (Mitchell and Mitchell v Gard and Kingwell (1863) 3 SW & Tr 275 and CPR 44.2(1))
- That discretion is not unfettered and must be exercised in accordance with established principles.
- Those principles are open-textured and depend on the circumstances of the case – in different cases application of the same principles produce different results.
- The notion that the costs of an unsuccessful party will generally be ordered to be paid out of the estate in probate claims is incorrect (Kostic v Chaplin  EWHC 2909 (Ch)).
- The principle of costs following the event can be readily departed from to encourage litigants to be more selective as to the points they make.
- In exercising the court's discretion as to costs, the court must consider the factors at CPR 44.2(4) and (5), including the conduct of the parties, whether a party has been wholly or partially successful, and any admissible offers to settle.
- Conduct includes pre-action conduct, whether it was reasonable to pursue or defend issues, the manner in which the party has pursued or defended a claim, and whether a successful claimant has exaggerated their claim.
- Where a party has alleged fraud and has lost or withdrawn, they will generally not just be the subject of an adverse cost order but an order for costs on the indemnity basis (Clutterbuck v HSBC plc  EWHC 3233 (Ch)).
- Where a party withdraws an allegation of fraud, the other party has been deprived of the opportunity to publicly vindicate their position, making an order for indemnity costs the just result (PJSC Aeroflot v Leeds  EWHC 1735 (Ch)).
Against the backdrop of these general principles, the court will have two probate specific costs principles in mind:
- There is a case for the costs to come out of the estate if the Testator's conduct has really been the cause of the litigation; or
- If a party has reasonable grounds for disputing the will, then each side should bear their own costs.
The first probate costs principle is limited in extent , and the Judge endorsed the view of Hodson LJ, in Re Cutcliffe's Estate  P.6, at 19:
'While it would not be possible to limit the circumstances in which a Testator is said to have promoted litigation by leaving his own affairs in confusion, I cannot think it should extend to a case where a Testator by his words, either written or spoken, has misled other people, and perhaps inspired false hopes in their bosoms that they may benefit after his death. It does not seem to me that the judges who, in the past, have laid down the practice that costs should be allowed out of the estate where the fault of the Testator has led to the litigation, had in mind such a situation as that.'
As to the second principle, the Judge emphasised that 'reasonableness' in 'reasonable grounds' must be stressed , endorsing the view of Sir James Hannen in Davies v Gregory (1873) LR 3 P&D 28, at 33:
'Where the facts show that neither the Testator nor the persons interested in the residue have been to blame, but where the opponents of the will have been lead reasonably to the bona fide belief that there was good ground for impeaching the will, there will be no order as to costs. Of course the opponents must have taken all proper steps to inform themselves as to the facts of the case, but if, having done so, they bona fide believe in the existence of a state of things which, if it did exist, would justify litigation, then, although no blame should attach to the Testator or to the executors and persons interested in the residue, each party must bear his own costs.'
Reasonable grounds is not automatically met where the claim survives the strike out test .
In a case like this, where a party alleges both undue influence and lack of knowledge and approval, the default position is that the unsuccessful party will pay the costs of both issues, though the court's discretion does extend to making a split costs order covering each issue .
Application of principles to the facts
The Judge concluded that on all of the three issues raised by the different Defendants, none could be said to be the caused by the Testator, nor were there reasonable grounds for litigating the issues .
Whilst many points were made and relied upon by the Defendants' counsel,  – , a few are illustrative:
- For example, the Testator did not cause the litigation by asking Ms Grime to amend the terms of an existing will when he had previously relied on solicitors . Neither did the finding that the Testator had misled people or inspired false hopes in them, as in Re Cutcliffe's Estate, mean that the Testator had caused the litigation .
- As to the reasonableness of the grounds for litigating the issues, in D4's claim for lack of due execution, there was nothing suspicious in the attesting witnesses refusing voluntarily to attend court to give evidence , nor the Testator's wife not recording his visiting the attesting witnesses in her diary .
- A particular challenge for the Defendants was that the Judge found they could not rely on what the Testator had said to family members following the breakdown of his relationship with the Claimant when the Judge had not heard evidence on that point .
- As to the lack of knowledge and approval claim, the Judge concluded that even if he was wrong on the application of the two probate costs principles, applying re Cutfliffe's Estate meant that a failed undue influence claim meant a complete liability for the costs of both issues .
The Judge concluded that the Defendants should pay their costs and the costs of the Claimant :
'Standing back from the detail, it might be thought somewhat surprising in circumstances where (1) a case is effectively withdrawn or abandoned by defendants and (2) that case is effectively one of an allegation of fraud on the part of the claimant and his then girlfriend..., that the defendants should have their costs paid from the estate or not have to pay the claimant's legal costs in vindicating the will. This, however, was the submission of the defendants.'
Take away for practitioners
The case is a helpful reminder of the costs principles involved in a will challenge generally and in the specific circumstances where a challenge is abandoned mid-trial:
- Practitioners must satisfy themselves at an early opportunity as to whether the cause of the litigation can properly be laid at the door of the Testator, or alternatively, whether there are reasonable grounds (above the test for stike-out) for challenging the will. A proper analysis of these points at the outset of a contemplated will challenge may discourage speculative litigation resting on the false premise that a litigant chancing their arm in a will challenge will always get their costs paid for out of the estate.
- In circumstances where a will challenge is abandoned mid-trial, the unsuccessful party cannot rely on evidence which has not been heard or cross-examined on, to establish 'reasonable grounds' . In certain rare circumstances, where a party is considering an attempt at settlement mid-trial, this may militate in favour of hearing all evidence before making a settlement offer.
- Whilst courts do have a discretion to split costs where both undue influence and lack of knowledge and approval are raised, following Re Cutcliffe's Estate, the court is likely to make a total order for costs where a party fails on undue influence.
- Parties relying on CPR 57.7(5), (i.e. where a defendant gives notice in their pleadings that they will not raise a positive case, but require the will to be proved in solemn form and will cross-examine the attesting witnesses of the will) must do so in substance, not just in form. In this case, the Judge concluded that D2's 'witness statement clearly sets out a very positive case indeed that the 2017 will is invalid' and therefore did not warrant costs protection under CPR 57.7(5)(b). 
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.