Maria Clyne (as Executrix of the Estate of Patrick Conlon) -v- Kevin Conlon  EWHC 2444 (Ch)
Maurice Rifat successfully obtained Beddoe’s protection on behalf of the claimant executrix
The claimant’s deceased uncle had a made a Will in 2016 appointing her as executrix and naming his three sons and the claimant each as 25% beneficiaries of the estate. Probate was granted in 2018. The estate comprised in the main of the deceased’s two London properties. In about 2019 the eldest son, expressed his intention to claim a beneficial interest in the properties, arising from an express or resulting trust based upon a historic joint-venture to develop properties he had embarked on with the deceased from the mid-1980’s onwards. In February 2021 the defendant issued the main claim in which he claimed at least a 50% interest in one property and 100% in the other. The main claim was not issued against the beneficiaries, it was only issued as against the claimant as executrix. In April 2021 this Part 8 Claim for Beddoe’s protection was issued against him by the claimant executrix. Two of the four beneficiaries, including the defendant, opposed the claimant’s claim, while the other two beneficiaries, which included the claimant in her individual capacity, supported it. The claimant executrix filed and served a defence in the main claim as no extension of time was granted by the defendant pending her Beddoe application.
Master Clark reviewed the law and commentary and in particular the cases of Re Evans  1 WLR 101 and Alsop Wilkinson v Neary  1 WLR 1220. She confirmed the principle that a Beddoe application was essentially a matter for the discretion of the Court, dependent on its own facts.
In deciding whether it would be right to make an order that the executrix be indemnified as to the costs of the claim, the Master considered the following factors:
- the merits of the main claim;
- whether the executrix had acted reasonably in defending the claim to date;
- whether by continuing to defend the claim she would be acting reasonably;
- the risk of injustice to the defendant if the order is granted;
- the risk of injustice to the executrix if the order is not granted;
- whether there are other ways of managing the risk of injustice to the parties.
There was sufficient merit in the main claim and it was impossible to form a view as to the likely outcome. Being sued only in her representative capacity, meant the claimant had acted reasonably in defending the main claim to date, which, if she had not, she would be open to a claim for breach of duty by the other beneficiaries. In a dispute between rival claimants to an interest in the estate or trust assets, where the parties are adult, sui juris and capable of deciding whether or not to fight at their own risk, Beddoe’s protection is normally inappropriate, as the costs of an unsuccessful defence of the main claim would be paid from the successful parties’ share, thus causing injustice (Re Evans and Alsop). However, it was accepted that the facts in this case were distinguishable in that the main claims in Re Evans and Alsop were for the entire estate by rival beneficiaries. As Nourse LJ put it in Re Evans, “the losers would have started by risking nothing and ended by losing nothing.” In the present case, which was in essence a third-party claim where the defendant sought to remove assets form the estate, the defendant would be in a better position as the property he sought an interest in, would not form part of the estate from which costs would be paid. Conversely, the Master was concerned at the potential injustice that would be suffered by the claimant executrix. If protection was not granted, she would be burdened with the entire risk of the defence, notwithstanding the other beneficiaries would benefit from its success. The Master found the risk of injustice for her was the greater, granted protection and ordered two-thirds of her costs to be paid by the defendant personally.
Applying for a pre-emptive costs’ order in representative litigation is about managing and balancing risk in respect of any injustice that may be suffered by the parties if such orders are made or refused. If personal representatives or trustees, without the sanction of the court, bring or defend proceedings brought against them in their representative capacity they may be held personally liable for the costs if they are unsuccessful and are considered to have acted unreasonably. They may, conversely, be held personally liable for having failed to pursue a good claim on behalf of or defend a bad claim against the estate. To protect themselves against this risk the representatives may seek the directions of the court by CPR rule 64 as to whether to defend or pursue litigation and to seek an indemnity from the estate for their costs of doing so: Re Beddoe, Downes v Cottam  1 Ch. 547, known as a Beddoe’s protection. If such a direction is obtained, the executor’s position is secure. If all the beneficiaries are competent and capable of deciding whether or not to pursue or defend a claim, and they are agreed as to the course they want the personal representative to take then the representatives are completely protected and there is no need or justification for seeking the directions of the court. However, where the beneficiaries of the estate are at odds, and indeed where the main claim against the estate is brought by one or more of the beneficiaries, the executor’s position is more precarious, and an application for Beddoe’s protection should always be seriously considered by advisors.