Lucilla Mary Belson & Ors v Timothy Belson & Ors

1. The remaining costs in issue in this claim are the costs of the claim from 5 September 2023, the date of the consent order of Deputy Master Jefferis (“the Consent Order”), which provided that the first defendant pay the costs of the claim to the date of that order. Legal principles

2. The court’s decision as to costs is a discretionary one. However, the general rule is that the unsuccessful party pays the successful party’s costs: CPR 44.2(2)(a). The court retains a discretion to make a “different order”: CPR 44.2(2)(a).

3. CPR 44.2(4) directs the court to have regard to all the circumstances, including: “(a) the conduct of all the parties; (b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and (c) any admissible offer to settle made by a party which is drawn to the court’s attention, and which is not an offer to which costs consequences under Part 36 apply.”

4. CPR 44.2(5) provides that the conduct of the parties includes – “(a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction – Pre-Action Conduct or any relevant pre-action protocol; (b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue; (c) the manner in which a party has pursued or defended its case or a particular allegation or issue; and (d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim.” Analysis and conclusions Whether the claimants are the successful party

5. In this case, the claimants succeeded in obtaining an order for an account, namely the Consent Order. The starting point therefore is that the costs of taking the account are to be paid by the accounting party. Instances when this might not be appropriate include if no (or minimal) sums were found to be payable on the taking of the account, or if the receiving party recovered less than the amount offered by the accounting party. Neither is the case here.

6. In addition, the first defendant’s position throughout the taking of the Accounts has been that no further sums were payable by him, and that he was owed money on the Accounts: (1) the first defendant’s written submissions dated 11 October 2024: “it is the case that, far from owing money, it is the case that [the first defendant] is himself owed money” (2) the first defendant’s written submissions dated 17 October 2024: “if, as [the first defendant] maintains, the taking of these accounts will result in him being owed money rather than the other way round …”

7. This was also his position in his revised accounting schedules prepared in April 2025, with additional items sought to be added in purple font: (1) Account A - stated that he was owed £30,139.30; (2) Account B -stated he was owed £35,382; (3) Account C - stated that he was owed £14,671.92.

8. The outcome of the taking of the Accounts was that the first defendant was found liable to make payments on all of them. It is in my judgment clear that the claimants are the successful parties. Conduct

9. The first defendant’s submissions did not engage with the question of who was the successful party in the claim. He submitted that costs liability should be determined exclusively by reference to the positions taken by the parties in the lead up to and in the conduct of the proceedings, and in particular, by two factors: (1) the claimants’ failure to engage with his proposals for settlement and/or mediation; (2) the claimants' failure to recover more than offered in their own WPSATC offers.

10. I reject that approach, as unsupported by CPR 44.2. Nonetheless, I consider whether the factors relied upon by the first defendant justify departing from the general rule. Settlement and/or mediation proposals

11. The first defendant’s written submissions refer to over 20 attempts to induce the claimants to either mediate or engage in meetings, to seek resolutions of the issues between the parties. I have reviewed the relevant correspondence by reference to the schedule provided by the first defendant. (In fact, there are 15 letters/emails, some of which contain more than one reference to meeting or mediation.)

12. The first point to be made is that as a fiduciary, the first defendant was obliged, as he ultimately accepted when he agreed to the Consent Order, to account for his dealings with the property and money held by him in that capacity. Providing an account comprises two parts: (1) a clear explanation in tabular form of sums received (their amount and nature) and sums paid or expended (their amount and nature); (2) documents evidencing the receipts and payments; or where there are no documents, an explanation as to why the transaction was justified. Only once this has been done and the claimants have served their Notice of Objections would the issues between the parties have become apparent.

13. The first 9 proposals which the first defendant relies upon (31 January 2021 to 21 October 2022) predate the Consent Order. They suggested a physical or Zoom meeting between him and the claimants. The claimants’ response was to require the accounts to which they were entitled. I do not consider this to be unreasonable, nor to provide a basis for depriving them of costs.

14. In October 2022, the first defendant instructed Premier Solicitors. Between 3 February 2023 and 20 July 2023, they proposed a stay for mediation or a facilitated face-to-face meeting on 4 occasions. The claimants’ response in their letter dated 9 February 2023 was that they needed reliable figures and evidence to back them up; and this remained their position until the Consent Order. The Consent Order itself, including the fact that the first defendant agreed to pay the costs of the claim to the date of that order, shows that the claimants’ position was fully justified.

15. Following the Consent Order, the first defendant filed his witness statement dated 6 October 2022, exhibiting what he claimed were the Accounts and all supporting documents. The claimants’ solicitor’s witness statement dated 3 November 2023 (and a letter of the same date) set out how these were inadequate (and consequently did not comply with the Consent Order); (1) Account A was not a single clear account, but 3 separate spreadsheets; (2) Account B was obviously incomplete; (3) Account C was inadequate and incomplete, and exhibited only one invoice in respect of claimed expenditure; (4) Account D was not provided.

16. On 7 November 2023, the first defendant’s solicitors accepted this when they wrote: “our client is making every effort to uphold the provisions of the Consent Order, all payments have been made to date and he is confident that he will be able to provide the balance of the verification to balance the accounts.”

17. On 29 November 2023 the first defendant’s solicitors provided more information and documents, asserting that he had shown an overspend of £12,000.00 on account A and just under £5,000.00 on “Johns account”. That letter suggested that the parties were at the stage where any difference in accounting could be dealt with by mediation. The claimants’ solicitors replied on 12 January 2024 in a lengthy letter setting out the remaining inadequacies in the Accounts, and concluding: “Our clients would be willing to consider mediation once your client has met his accounting obligations. We strongly suspect that if he did so, however, then the cost of mediation could be avoided because your client's accounts would provide the necessary answers.”

18. On 19 January 2024 the first defendant’s solicitors provided further bank statements, and asserted that all relevant documents that were available had been provided. They again offered mediation. The claimants’ solicitors’ response of 9 February 2024 set out their analysis and queries arising in respect of the bank statements, and that the proposal for mediation was unrealistic bearing in mind the outstanding steps that the first defendant needed to take to provide accurate accounts.

19. Again, I do not consider the claimants’ stance to be unreasonable or one which would justify depriving them of their costs.

20. In February 2024, Premier Solicitors ceased to act for the first defendant, and he instructed direct access counsel, Timothy Higginson, with conduct of the litigation. No further offers to mediate were made.

21. On 3 June 2024, the first defendant’s counsel stated that: “the processes of providing such accounts as will vindicate satisfactorily the performance of our client […] is continuing ” (emphasis added)

22. Again, this was effectively a concession that the Accounts provided to date were not adequate or adequately verified.

23. In the factual circumstances set out above, I therefore reject the first defendant's submission that the claimant adopted an intransigent position in response to the first defendant's proposals to meet and/or mediate. Accordingly, they are not to be deprived of their costs for that reason. Without Prejudice Save As to Costs (WPSATC) offers

24. The first defendant also relied upon the claimants’ failure to recover more than had been offered in their WPSATC offers. As to this, I accept the claimants’ submission that appropriate comparison between the offers and the outcome must exclude costs, in order to compare like with like. When that is done, the analysis set out in the claimants’ counsel’s reply submissions, which I accept, shows a substantial level of recovery: Timing Offer Recovery as compared to offer Percentage recovery 1 st offer (23.09.22) Pre-action Sums to be distributed (other than to D1): £72,875 Sum to paid to will trust (including the £91,500 D1 had “invested”): £100,000 Total: £172,875 After the offer D1 paid or was ordered to pay (under the 05.09.23 Order) the following sums : Sums to be distributed (other than to D1): £16,568 Sum paid to will trust - £94,000 Total: £110,568.02 D1 was then ordered (under the 16.09.25 Order) to pay the following sums : Sums to be distributed (other than to D1) (C) - £28,828.52 Payment on Account (B) - £999.05 Payment on Account (D) - £1,686.44 Total: £31,514.01 Grand Total: £142,082.03 82.2% (£142,082.03 as a percentage of £172,875). 2 nd offer (08.02.24) Prepared using the information D1 had made available to Cs by February 2024. Interest payments £2,174.54 Sums to be distributed (other than to D1) (C) £50,250.75 Payment on account B: £2,500 Payment on account D: £3,500 Total: £58,425.29 16.09.25 Order Sums to be distributed (other than to D1) (C) - £28,828.52 Payment on Account (B) - £999.05 Payment on Account (D) - £1,686.44 Total: £31,514.01 53.9% (£31,514.01 as a percentage of £58,425.29) 3 rd offer (17.03.25) Before D1’s application to adduce the ‘purple text’ accounts Sums to be distributed (other than to D1) (C) - £32,003.10 Payment on account B - £2,882.96 Payment on account D - £3,668.38 Total: £38,554.44 16.09.25 Order Sums to be distributed (other than to D1) (C) £28,828.52 Payment on Account (B) - £999.05 Payment on Account (D) - £1,686.44 Total: £31,514.01 81.7% (£31,514.01 as a percentage of £38,554.44)

25. In addition, on the second day of the disposal hearing (on the first defendant’s informal application), the period of the account of his dealings with his mother's assets during her lifetime (Account A) was extended. This meant that the first defendant was given credit on that account for specified categories of expenditure (amounting to about £29,000) incurred before the accounting period provided for by the Consent Order. The claimants are not therefore to be criticised for their offers not making provision for these further sums, when they could not reasonably have anticipated their inclusion in the Accounts.

26. The first defendant did not make any counter-offers in response to the claimants’ offers. His submissions sought to justify this by the high level of the claimants’ offers. However, in circumstances where he did not make any settlement proposals, the claimants did not in my judgement act unreasonably in proceeding to a disposal hearing.

27. I do not therefore consider that the claimants’ conduct provides any basis for departing from the general rule. I will therefore order that the first defendant is personally to pay the claimants’ costs of the claim from 5 September 2023 onwards (except to the extent that orders for costs have already been made). For the avoidance of doubt, I will also order that he is not entitled to indemnify himself in respect of those costs from the estate of the deceased, or any of the other funds which he held as fiduciary. Basis of assessment

28. The claimants submitted that their costs should assessed on the indemnity basis. The first defendant did not make any submissions as to the basis of assessment. Legal principles

29. For present purposes, it is sufficient to refer to paragraph 44.3.8 of the 2025 White Book: “In Excelsior Commercial and Industrial Holdings Ltd [2002] EWCA Civ 879 ; [2002] C.P. Rep. 67, CA, the Court of Appeal … declined to give detailed guidance as to the principles to be applied by judges intending to make orders for costs on the indemnity basis, taking the view that they should not strive to replace the language of the rules with other phrases and that the matter should be left so far as possible to the discretion of judges at first instance (at [38] per Waller LJ). The Court held that the making of a costs order on the indemnity basis would be appropriate in circumstances where: (1) the conduct of the parties or (2) other particular circumstances of the case (or both) was such as to take the situation “ out of the norm ” in a way which justifies an order for indemnity costs (at [31] per Lord Woolf LCJ and [39] per Waller LJ).” Analysis and conclusions

30. Both sides agreed that the costs incurred in this part of the claim were disproportionate to the sums at stake. Certainly, the court time spent was disproportionate: the disposal hearing took 3 days of court time: 18 October 2024, 21 May 2025 and 13 June 2025 (plus pre-reading time). Half a day of this time (the morning of 21 May 2025) was taken up with the first defendant’s belated informal application to extend the ambit of Accounts A and B, and to rely upon additional documents and revised calculations in relation to those accounts. The total court time was disproportionate to the sum recovered by the claimants (£31,514.01), and to the sums offered by the claimants: about £58,000 in February 2024 and about £38,000 in March 2025.

31. Both sides also sought to place the blame for the disproportionate level of costs on the other side. I am satisfied that the first defendant’s conduct was primarily responsible for the increased costs: (1) his failure to produce clear and complete schedules; (2) his piecemeal production of the supporting documents required to verify the accounts; (3) his oral application at the hearing on 21 May 2025 (referred to above) to broaden the scope of the accounts and introduce further documentary evidence; (4) his counsel’s repeated attempts to reopen points which had already been decided by the court; (5) his criticisms of and attempts to obtain irrelevant documents from the first claimant. I do not however consider that this conduct was sufficiently unreasonable to make it “out of the norm”.

32. The claimants also submitted that the fact if the standard basis were ordered, they would not recover the costs incurred by them insofar as they were disproportionately incurred, justified those costs being assessed on the indemnity basis, since the disproportionality resulted from the first defendant’s conduct. I do not accept this submission. The fact that disproportionate costs will not be recovered is a consequence of the indemnity basis not being appropriate. It cannot in my judgment be a reason of itself for ordering that basis.

33. I will also, as required by CPR 44.2(8), order the first defendant to pay a reasonable sum on account of the costs ordered, as the first defendant has not submitted that there is any good reason not to do so.

34. The parties should file a draft order (agreed, if possible) reflecting this judgment, and setting out a timetable for: (1) the claimants to file an up to date costs schedule and brief submissions as the amount to be ordered as a payment on account of those costs, and the date for that payment to be made; (2) the first defendant to file his submissions as the amount and date of the payment on account.