username

password

Hind CourtHarcourt Chambersimage of 4 Paper Buildings logoDNA Legal1 Garden CourtCoram ChambersGarden Courtsite by Zehuti

Home > Judgments > 2006 archive

Sherrington v Sherrington [2006] EWCA Civ 1784

Application for permission to appeal, with appeal to follow, costs orders arising from litigation under the Inheritance (Provision for Family and Dependants) Act 1975. Permission to appeal was granted.

The case was complicated by the length of the litigation and successive delays as the appellants attempted first to claim, out of time, under the 1975 Act and then pursued a probate claim which had the effect of putting the original action on hold. In this judgment Waller LJ decided that the appellants should receive 40% of the costs arising from the proceedings under the 1975 Act but that the defendant should receive all her costs arising from the probate claim.

________________

Case No: B4/2006/0725


Neutral Citation Number: [2006] EWCA Civ 1784
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE PRINCIPAL REGISTRY OF THE FAMILY DIVISION
Mr James Tillyard QC (sitting as a deputy High Court Judge)

Royal Courts of Justice
Strand, London, WC2A 2LL

Monday 29th December 2006
Before :

LORD JUSTICE WALLER
Vice-President of the Court of Appeal, Civil Division
LORD JUSTICE RIX
and
LORD JUSTICE MOORE-BICK
- - - - - - - - - - - - - - - - - - - - -
Between :

(1) Gloria Sherrington
(2) Ramon Sherrington Appellants/ Claimants
- and -
Yvonne Sherrington Respondent/ Defendant

(Transcript of the Handed Down Judgment of
WordWave International Ltd
A Merrill Communications Company
190 Fleet Street, London EC4A 2AG
Tel No: 020 7421 4040 Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
- - - - - - - - - - - - - - - - - - - - -

Mr Francis Barlow QC & Mr Toby Boutle (instructed by Messrs Dawson Cornwell) for the Appellants
Mr Nicholas Mostyn QC & Ms Rebecca Bailey-Harris (instructed by Messrs Goldkorn Mathias Gentle) for the Respondent

- - - - - - - - - - - - - - - - - - - - -
Judgment
As Approved by the Court

Crown Copyright ©



Lord Justice Waller, V-P :
1. This is the judgment of the court. This adjourned application for permission to appeal, with appeal to follow if permission is granted, arises out of failed proceedings under the Inheritance (Provision for Family and Dependants) Act 1975 (the "1975 Act"). There was also a claim to enforce what was said to be a contractual obligation to make financial provision for a divorced wife, that contract being said to be found in or evidenced by a consent order, a claim which was struck out. After failure of these two claims, the judge, Mr James Tillyard QC, sitting as a deputy High Court Judge, made a costs order awarding the defendant 25% of her overall costs. There is no appeal by the defendant against that order, but the claimants do seek to appeal, submitting that in respect to the 1975 Act proceedings the judge failed to give effect to his own ruling that, but for certain late concessions made by the defendant at the hearing, he would have granted the relief requested under the 1975 Act of permitting the claim to be brought out of time, which was the issue then before him. It is submitted therefore that the judge ought to have made an order giving the applicants their costs of the 1975 Act application. It is not disputed that the defendant ought to receive all her costs of what has been called the contractual claim.

2. The hearing was treated as an appeal, and we formally confirm permission as having been granted.

The parties and the proceedings
3. The appellants, Gloria and Ramon Sherrington, are respectively the first wife and son of Richard Sherrington, who unfortunately died in a car accident on 30 October 2001. He was a successful solicitor and businessman, and left a valuable estate. The respondent is his second wife, Yvonne Sherrington. I shall, as the judge did below, refer to the litigants as Gloria, Ramon and Yvonne respectively, and to Mr Sherrington as Richard.

4. Not long before his death, Richard made a will leaving everything to Yvonne and nothing to Gloria or their children (Ramon and his two elder sisters, Daliah and Donna). Following his death, there was a challenge to his will by his first family. On 2 May 2003 Gloria and Ramon issued these proceedings seeking relief under the 1975 Act. Those proceedings were out of time, because they ought to have been brought within six months of the grant of probate, which in this case occurred on 10 May 2002. They were therefore nearly six months out of time. However, under section 4 of the 1975 Act the court is able to grant permission to bring proceedings albeit out of time, and Gloria and Ramon therefore asked for that permission. Ramon, although now an adult, was still a minor at the time of his father's death.

5. A little later, on 2 July 2003, Daliah, Donna and Ramon brought separate proceedings for the revocation of the grant of probate and for a declaration that Richard died intestate. In the light of that challenge, the 1975 Act proceedings were by common consent put aside to await the outcome of the probate action. Despite initial success before Lightman J on 13 July 2004, that action failed in the court of appeal on 22 March 2005, when this court restored the grant of probate to Yvonne.

6. On 15 August 2005, Gloria and Ramon then applied for the application to extend time under the 1975 Act to be heard as a preliminary issue. On the same day Gloria alone applied to enforce the terms of a consent order dated 26 May 1999, which had been made on the occasion of her divorce from Richard (the "consent order"). It was that consent order which gave rise to the contractual claim.

7. In due course that preliminary issue, and Yvonne's application to strike out the contractual claim came before the judge for hearing on 27 and 28 February 2006. During that hearing, Mr Nicolas Mostyn QC, who was representing Yvonne as he does again on this appeal, informed the judge of certain concessions which she was willing to make and to have put in the form of undertakings to the court. In his reserved judgment, given on 17 March 2006, the judge said this:

"62. Mr Barlow [Mr Francis Barlow QC, who again represents Gloria and Ramon on this appeal] invites me to ignore the concessions that have been "wrung out of Yvonne during the course of this trial" – his words and not mine. The concessions referred to relate to the pension and the death benefit trust. The first concession came on the first morning of the hearing and it was that Yvonne was prepared to forthwith pay £766,219 to the pension trustees on account of the debt due from Barex Brokers Ltd, and the second concession came on the afternoon of the second day when she accepted the validity of the death benefit trust and undertook to notify the trustees that she wished to make no claim on the trust.

63. There is no doubt that both concessions came very late in the day and were motivated by this litigation. I can see no reason why they should not have been made some considerable while ago. However, whilst that may be relevant to the question of costs, the fact is these concessions do make a difference to the financial position of Gloria. It is something that is bound to be taken into account at any final hearing and so I cannot see any reason why I should ignore them when deciding whether Gloria has, or more accurately will have at trial, an arguable case. In my judgment I must consider the position in the light of the concessions that have been made…

130. If I had found that either Gloria or Ramon had a good claim against the estate, or indeed any claim, I would have exercised my discretion in their favour by granting permission. In my judgment it would have been the just and fair course to follow and it would have been unfair to prevent them from advancing their claim when the period of delay, whilst inexcusable, has caused no prejudice to Yvonne.

131. But of course I have found that they do not have an arguable case, and therefore I refuse permission to bring the application under the 1975 Act."

8. What did the judge mean when he said that Gloria and Ramon did not have an arguable case in the light of the concessions? Briefly, he meant this. Section 1 of the 1975 Act empowers the court to make an order to benefit a former wife or child of a deceased out of the deceased's net estate, where "the disposition of the deceased's estate effected by his will…is not such as to make reasonable financial provision for the applicant". Gloria claimed that reasonable financial provision in her case required a capital sum such as would provide her with an income to match that which the consent order would have given her had Richard survived. She said that that was some £86,000 per annum, made up of a maintenance payment of £50,000 per annum plus the value of other benefits. The judge considered that her claim was only arguable for the lower amount of £50,000, and that a capital sum of £1.2 million would provide for that. He then considered various sums which Yvonne submitted should be taken into account as having already accrued to Gloria from Richard's estate or as a result of his death, such as life policy payments, the survivorship half share of a property held jointly with Richard, etc. The judge accepted that in respect of all such matters, save Gloria's Fatal Accidents Act claim in the sum of £328,000, it was realistically arguable (even if not necessarily or even probably correct) that they did not have to be set off against her 1975 Act claim. That, however, left her still a long way short of reasonable financial provision. That was where Yvonne's two concessions came in. The judge calculated that the value of the first concession, in terms of the payment due to the trustees of her company pension (out of which it had been contemplated at the time of the divorce that Gloria would receive her maintenance payments following her 60th birthday on 2 April 2002) was with accumulated interest £763,128; and that the value of the second concession regarding her likely entitlement from the death benefit trust was £148,750. On these figures, it was unlikely that Gloria would lack what she reasonably needed, and therefore the judge refused in his discretion to permit her claim to go forward out of time. However, but for the two concessions, Gloria would still have been arguably some £900,000 short of safety, and in those circumstances the judge would have exercised his discretion to permit her claim to go forward out of time.

9. In Ramon's case, his arguable claim was put by the judge at £150,000, but in the light of Yvonne's second concession alone he would obtain £148,750 from his 25% share of the death benefit trust. For that reason, and that reason alone, the judge denied him permission to claim out of time.

10. There is no appeal from that judgment.

The costs judgment
11. Following the judge's judgment, there were submissions regarding costs. Mr Mostyn on behalf of Yvonne asked for costs on both applications. He referred to CPR Part 44.3(2)(a) ("The general rule is that the unsuccessful party will be ordered to pay the costs of the successful party") and addressed himself to the judge on the basis that Yvonne was the successful party on both applications. He anticipated the argument that Yvonne might lose some or all of her costs because of the lateness of her concessions by submitting that a figure of £710,000 as the value of the payment to be made to the pension trustees had been long agreed. He said that that sum had been put aside by Yvonne into a separate account in the name of the Barex Brokers Limited Trustees Pension Fund and had now grown to £768,000. As for the second concession, he submitted that Gloria and Ramon were always likely to benefit to the now acknowledged extent. He said:

"The metaphor might be made that what we were doing by our concessions was just hastening the setting of the concrete that was well on the way to setting in any event."

12. On behalf of Gloria and Ramon, however, Mr Barlow submitted that the concessions were very real and important. Whatever the position about the agreement of the £710,000, why had the money not been paid to the trustees? As to the death benefit trust, he pointed out correspondence in which the validity of the deed of appointment ("which we do not concede is valid") had been put in issue by Yvonne's solicitors. He reminded the judge of his conclusion at para 130 of his judgment that, but for these concessions, Gloria and Ramon would have had leave to bring their 1975 Act claim. He conceded Gloria's liability in costs for her contractual claim.

13. At the conclusion of the argument, the judge asked Mr Mostyn whether, "If I were to take the view that they [Gloria and Ramon] should not pay all of your costs in relation to these proceedings", it would make sense to rule on a percentage figure across the board, rather than splitting his order in relation to the two applications. Mr Mostyn said he had no objection.

14. The judge steered a course between the two sets of submissions. He ordered Gloria and Ramon to pay 25% of Yvonne's costs in relation to both applications. He reasoned the matter thus:

"2. I have found in my judgment that, but for the concessions made by Yvonne during the trial, I would have permitted the claim under the Inheritance (Provisions for Family and Dependants) Act to proceed notwithstanding that it was out of time. I have also found no reasonable explanation for those concessions being made so late in the day and no reasonable explanation for them not having been made earlier. In my judgment they could and should have been, and that is a reflection on the manner in which Yvonne has defended the claim. It also leads me to the conclusion that it was reasonable to a degree for Gloria and Ramon to pursue their claim under the Inheritance Act to trial.

3. It is right to say since although they have succeeded on a number of issues in this case, it did not affect the ultimate outcome of the trial. Certainly Gloria and Ramon lost the second application altogether, and Yvonne is entitled to her costs in relation to that. But it is a relatively small part of the overall claim…

5. In my judgment there was a real need for a more constructive approach and more constructive negotiation on the part of both parties in this case from an early stage in order to try and reach a sensible agreement…

6. I have come to the conclusion that there was some real justification in pursuing this matter to trial. Nevertheless, there can be no doubt that at the end of the day I have come to the conclusion that there is not an arguable case and the applicants have been unsuccessful. At the end of the day and having regard to all the matters that I have set out in my judgment and those matters I have just referred to in expressing my views as to conduct, I think the just result as to costs is that Ramon and Gloria should pay 25 per cent of the overall costs of this litigation…"

15. When subsequently Mr Barlow asked for permission to appeal on the question of costs, saying that his clients had had no alternative but to pursue their application, the judge refused, adding this:

"I accept that entirely – well, I do not accept that entirely. I accept that is a relevant factor for me to take into account, Mr Barlow, but, as I have indicated I hope in relation to my judgment on costs, had each of the parties concentrated their minds on the ultimate outcome of this case, those are concessions that could have been actively sought, and so rather than simply allow it to go in the course of negotiations, they could have been actively sought and if it was thought that that would lead to a conclusion of these proceedings, no doubt that would have happened, and so I have not found your clients to be faultless in the conduct of these proceedings, but nor have I found Yvonne's conduct to be faultless either, and so I expand upon what I have said so that it is perfectly clear to you and to anybody else that should have regard to the way in which I have exercised my direction, those are the matters I had in mind."

The submissions on this appeal
16. On this appeal the parties have repeated the submissions they made before the judge, in the awareness of course that he had already exercised his discretion by making the order under appeal. Mr Mostyn, however, has gone further, picking up a point made by Neuberger LJ when adjourning this matter, who speculated that the judge may have had in mind that Gloria and Ramon in seeking an extension of time were "at mercy". Mr Mostyn also heavily relied on a virtual respondent's notice in order to seek to argue that the judge had been too generous to Gloria and Ramon in his main judgment.

17. Thus on behalf of Gloria and Ramon, Mr Barlow has emphasised that but for Yvonne's concessions in the course of the hearing, their 1975 Act application would have succeeded. He submitted moreover that such potential success reflected success not only in an interlocutory preliminary issue relating to the right to bring those proceedings out of time, but also success in substance as well, as it were at final trial, because those concessions had amounted on the judge's figures to substantive relief worth some £0.9 million in the case of Gloria and nearly £150,000 in the case of Ramon. As for the judge's criticism (in that passage drawn forth after his decision on costs, in dealing with the request for permission to appeal on costs), he was in error, possibly because he had never raised with counsel any such concerns. If he had done, Mr Barlow would have pointed out to him, as he did to us, that there had been two very serious attempts by Gloria and Ramon to mediate with Yvonne, once before the trial before Lightman J and once again in between that trial and the appeal, and that such attempts, which had concluded in mediation hearings, had embraced all issues, including those under the 1975 Act. In any event, what more could the appellants have done? They had asked Yvonne for relief, but had been denied. The solution lay in her hands, not in theirs – save for the step which they had been forced to take and pursue to a hearing, that of invoking the assistance of the court. The judge had therefore made two errors: first, he had treated Gloria and Ramon as though they had lost, when in fact they had won; secondly, he had wrongly blamed them for not pursuing their rights actively through negotiation.

18. On behalf of Yvonne, however, Mr Mostyn submitted that the judge's discretion should be respected. Gloria and Ramon had gained no more than they already in effect had – or could have had by requiring Gloria's co-trustees to join in an action against Barex. The figures relating to the pension fund had already been agreed. Yvonne had set the sum aside in a separate account. It was for the Barex company to pay, and if it would not, the trustees could make it pay, and Gloria as a beneficiary could force them to do so. It was a matter of summary judgment. Similarly in relation to the death benefit trust, there was no real dispute, and it was foolish to think that Yvonne, for all that she was a beneficiary too, would stand in the way of fair distributions to Gloria and her children, or could unfairly influence the trustees. The concessions therefore merely put form on substance. Moreover, the judge was fully entitled to take account of the absence of constructive negotiation on the part of the applicants as relevant conduct under CPR Part 44.3(4). Over the course of the two day hearing he could clearly come to an informed conclusion on such a topic, and it was not for Gloria and Ramon to re-visit this issue on appeal. Thirdly, as applicants who were out of time and at mercy, whose delay from December 2002 to May 2003 was held to be inexcusable, they should not be thought as being entitled to any costs even had they succeeded in obtaining the court's permission to proceed. The judge would have been justified in making no order in their favour. As it was, their application had been unsuccessful, and, quite apart from Yvonne's concessions, Gloria had failed to persuade the judge in any event that she had an arguable claim for more than the capital needed for an income of £50,000 per year.

19. In sum, Mr Mostyn submitted, the judge's order could be looked at in this way. As for the 1975 Act application, both in terms of outcome and in terms of conduct, it was a draw. The judge could properly have said, and presumably considered, that the proper order was no order as to costs on either side. That left Gloria's contractual claim, which had failed and in respect of which Yvonne was plainly entitled to her costs (as was never disputed). In such circumstances, the simplest thing was to award Yvonne 25% of her overall costs. That gave effect to the judge's view that the contractual claim was "a relatively small part of the overall claim". That was preferable to making an order which might require the costs judge to assess the costs of the two applications separately.

20. Two more or less technical points were raised before us which appear to have been overlooked in submissions before the judge. The first relates to Ramon as a separate litigant. The judge's order takes no account of the fact that he was not a party to Gloria's failed contractual claim. At present he has been made liable, however, for 25% of her overall costs. That would not be consistent with Mr Mostyn's rationalisation of the judge's order. Mr Mostyn submits, however, that no one objected before the judge about the idea, raised by him, of striking one percentage figure across both applications; and in any event the substance of the matter was that Ramon's costs were paid by his mother.

21. The second relates to new information from the parties regarding the breakdown of their costs over the two applications. We are now told that Yvonne's contractual claim costs have been put forward as 41.25% of her overall costs, namely almost as large as her 1975 Act application costs. The figures are apparently some £80,000 overall, split as to £33,000 for the contractual claim and £47,000 for the 1975 Act application. Mr Barlow submits that the former figure is unreasonable, and ought to be no more than some 10% of the overall costs incurred. Mr Mostyn submits that the effect of the consent order raised a difficult question of law which needed extensive research. On the other hand, Gloria's and Ramon's costs, as we are informed by Mr Barlow, are much larger than Yvonne's. They amount to nearly £199,000, all but £7,276.88 of which is ascribed to the 1975 Act application. Mr Barlow says that separate files were opened in respect of the two claims, so that these figures are accurate, not only absolutely but relatively too. Mr Mostyn says that the much larger costs incurred by Gloria and Ramon are themselves unreasonable. Unfortunately, there appears material here which is capable of leading to further disputes between the parties, even on the judge's overall percentage figure. The judge was not assisted at the costs hearing, as he might well have been, by these figures, or even approximations of them.

A respondent's notice?
22. Mr Mostyn's main concern (see his skeleton argument) was to submit that in any event the judge had erred in favour of the appellants on their 1975 Act preliminary issue by adopting too favourable a test and being prepared to accept that various items coming to Gloria as a result of Richard's death need not for present purposes be set off against her potential 1975 Act recovery. If those items had been set off, which Mr Mostyn suggests that on balance they should have been, then it would have been seen that Gloria and Ramon lacked an arguable claim for permission to present their application out of time irrespective of the outcome of Gloria's pension entitlement or Gloria's and Ramon's interest in the death benefit trust. They were in any event reasonably provided for.

23. Thus Mr Mostyn submitted that "Were permission to appeal to be granted, Yvonne would wish to file a respondent's notice seeking to uphold the judge's costs decision on further or alternative grounds."

24. We have no doubt, however, that such an approach to the question of the judge's costs discretion is not permissible. His substantive judgment is not being appealed by either side. It therefore stands, for better or for worse, as it is. That was the basis upon which he exercised his discretion as to costs, and no other. It would therefore be wrong in principle to permit a party to a costs' appeal to make submissions on costs on some alternative basis as to the substantive merits. It is quite unlike the position where one party appeals a judgment on its merits, and the respondent is then entitled to seek to support it, even without needing further permission, on further grounds: cf Cie Noga d'Importation et d'Exportation SA v. Australia and New Zealand Banking Group Ltd [2002] EWCA Civ 1142, [2003] 1 WLR 307. If Mr Mostyn were to be entitled to argue the merits of the underlying decision, Mr Barlow would have to be given a like opportunity and an appeal on costs would then become a full blown appeal on the merits.

Discussion
25. There is no need to emphasise yet again this court's reluctance to review discretionary costs orders made by trial judges who are necessarily in the best position to consider how their disposition will do justice to all those aspects of a case – the substantive outcome, the procedural history, and the conduct of the parties – which inform a costs decision. It will only be where something has gone plainly wrong, so that the interests of justice are truly seen to be involved, that this court can be justified in interfering.

26. Has the judge erred in this case in that sense? We think he has. Although he was conscious in giving his main judgment, and again when dealing with costs, that "but for the concessions made by Yvonne during the trial, I would have permitted the claim…I have also found no reasonable explanation for those concessions being made so late in the day" (to quote again from para 2 of his costs judgment), he nevertheless still regarded Gloria and Ramon as the substantive losers. (We are confining ourselves for the moment to the 1975 Act claim.) This is somewhat surprising, and therefore we have been especially cautious and diffident in coming to this conclusion, but we think it is the necessary inference from what he went on to say. Thus, while noting that Gloria and Ramon had succeeded on a number of issues, he emphasised that that "did not affect the ultimate outcome of the trial" (para 3). Above all, he said in his final paragraph that, although there was some real justification in pursuing the matter to trial, "Nevertheless, there can be no doubt that at the end of the day I have come to the conclusion that there is not an arguable case and the applicants have been unsuccessful" (para 6). That was only the formal result, not the substantive result. The truth is that, by reason of Yvonne's concessions, which were reflected in the judge's order as undertakings, the substantive result was a victory for Gloria and Ramon. They failed to get permission to apply out of time only, on the judge's findings, because, by reason of Yvonne's concessions, they had no need for that permission. They had no need for that permission, because Yvonne, by her undertakings had given them a large part (admittedly not all) of what they had been asking for. To that extent, their application for permission, a merely preliminary issue, was victory at final trial. An analogy is where an interim injunction is refused because a permanent undertaking is given.

27. If the judge had clearly seen that Yvonne's late concessions gave a substantial (admittedly not complete) victory to Gloria and Ramon, we do not think that he would have gone on to express himself as he did. He would not have said that, although they had won some points, they had lost overall. He would have said that, although they had lost some points, they had won overall. Nor would he have said, in his final conclusion, that although they had real justification for suing, they had been unsuccessful. He would have said that, although they had put their case too high, they were substantially successful.

28. We therefore think that the judge erred in this important respect. He had to decide who had been the substantive victors, and he persuaded himself that Yvonne had been.

29. He then went on to emphasise however, the faults in Yvonne's conduct. They needed to be emphasised for the very reason that he was presenting Yvonne as the overall winner. He had opened his judgment by reminding himself of the general rule "that the unsuccessful party should be ordered to pay the costs of the successful party" (para 1). He closed his judgment by reverting to Yvonne's conduct because he was not going to award her all her costs. He only awarded her 25% of her costs, even though she had without question won on the contractual claim.

30. It was only when he was pressed to give permission to appeal on costs that the judge also emphasised Gloria's and Ramon's conduct as well. So far he had said nothing about that, save that they had some real justification for bringing their claim. Of course, we fully accept that he had in his mind what he said about their conduct. But the fact still remains that the reason why he had previously emphasised Yvonne's disappointing conduct rather than Gloria's and Ramon's is because he was justifying a less than generous order for costs in favour of the (as it were) successful party.

31. As for Gloria's and Ramon's conduct, described as "not…faultless" because the concessions had not been "actively sought": this is, we think, a different point from that which Mr Mostyn made to the judge, and again to us, that the concessions were not real or important, because in effect the judge did not accept that submission, either in his original costs judgment, or even in his later remarks. On the contrary, he said that there was some real justification in the claim. In any event, the documents before us show that requests had been made for payment of the funds due to the pension fund from Barex: see for instance the letter sent by Gloria's co-trustee (Fairmount Trustee Service Limited) to Yvonne dated 5 May 2005 ("The purpose of this letter is to make a further formal request for payment of the balance of the funds due…"), or their letter dated 25 July 2005 threatening legal proceedings. The latter called forth a reply from Yvonne's solicitors dated 2 August 2005 in which further information was requested before consideration would be given to "what, if anything, may be due"; and the same letter put in issue the validity of the trustees' deed of appointment. Fairmount's reply was to protest at the unsatisfactory nature of that answer and to say that without either a proper explanation of why the funds were not forthcoming, or the funds themselves, the trustees would commence proceedings. Yvonne's solicitors replied again on 11 August 2005: to complain that the institution of proceedings would be premature. Mr Mostyn now complains that the obvious solution to any difficulty (he denies any) was for the trustees to sue Barex.

32. Instead of pressing the trustees for the commencement of entirely new proceedings, Gloria and Ramon sought to activate their existing 1975 Act application: hence their 15 August 2005 application for a preliminary issue in that application. On 14 December 2005 Yvonne made a witness statement, agreeing Gloria's pension entitlement at £710,000 (based on a pension fund of £1,550,000). Nothing, however, was said about paying any moneys to the pension trust to enable such an entitlement or the death benefit trust to be put sufficiently in funds; nothing was said about the money put into the Barex account (under Yvonne's sole signature; all that only emerged subsequently to the proceedings); and nothing was said to allay any concerns about benefits payable under the death benefit trust. It was only on the eve of the hearing before the judge that the "Position Paper" put in on Yvonne's behalf said that it was disputed that Yvonne refused to transfer funds to the pension fund and that "Gloria will unquestionably receive what she is entitled to". Indeed, it was suggested that Gloria's entitlement under the Barex pension would amount to some £1.25 million. It was said that Ramon had no claim at all under the 1975 Act.

33. As for negotiations between the parties, the judge does not appear to have enquired into such matters. In fact mediations had taken place. Of course, they lie behind the screen of without prejudice privilege. No one knows or is entitled to know why those mediations failed. In theory, either party could have been recalcitrant. It seems hard, however, to blame the applicants.

34. Mr Mostyn's most persuasive argument was to the effect, outlined above, that the judge was effectively saying, as to the 1975 Act claim, that both parties were equally at fault: thus no order for costs on that account. However, he does not say so, as he so easily could. He appears to regard Yvonne as the winner, albeit with much to say against her.

35. There remains the difficulty about Ramon, which dropped out of sight at the conclusion of the proceedings before the judge. Ramon was not concerned with his mother's pension, but he was concerned with his entitlement to a share of the death benefit trust, and those funds were only finally secured by the payment which Yvonne undertook to make to the pension fund trustees, by her dropping of any attack on the validity of the deed of appointment, and by standing aside herself as a potential beneficiary.

36. In these circumstances, we are satisfied that the judge erred, and did so sufficiently plainly that it becomes necessary for this court to exercise its own discretion in the interests of justice. We would regard Gloria and Ramon as the substantive winners of their 1975 Act application, albeit on a less broad ground, and for less reward, than that for which they, in particular Gloria, contended. Their reward, however, was in Yvonne's undertakings, and was real enough. If the judge had merely found that he was prepared to allow a claim to go forward despite being out of time, on the basis that otherwise "inexcusable" delay was excused by the absence of prejudice on the other side, then he could well have said that costs were to be in the cause: the ultimate costs would be determined by the merits outcome. As it was, however, by saying that the undertakings gave the applicants all that they were arguably entitled to, the judge had dispensed with any further cause. He therefore had to make a final disposition of the costs, as now does this court.

37. If account were merely taken of the inexcusable delay and the extent to which Gloria's and Ramon's claims, taken at their highest, respectively failed and succeeded, we would have awarded them 60% of their costs of the 1975 Act claim. Once it is realised that Yvonne's concessions and undertakings amounted, pro tanto, to a substantive albeit partial victory on the part of Gloria and Ramon, then it is not necessary to examine Yvonne's "conduct" further. The concessions came just in time to affect the judge's disposition, but too late to avoid litigation down to the hearing itself. It may be, but it is unnecessary to decide, that the failure to pay what had been acknowledged in terms at any rate of the pension entitlement might have been an attempt to put pressure on Gloria by keeping the funds where they were rather than in the pension fund.

38. However, there was obviously a further element about the case which worried the judge. He plainly thought that, if the claim had been more narrowly focused by the applicants, there was a decent chance that it might have been avoided altogether. This went not so much to the general negotiations which had been conducted at an earlier stage by means of mediation, but to the issues which had given rise to the immediate litigation before him. On the material before the court, we think that the judge's instincts ought to be respected. The fact is that, if Gloria and Ramon's claims had been limited to the area of their ultimate success, Yvonne for her part might have been more forthcoming, and the whole litigation might have been avoided. It is not easy to rationalise this instinct, but we think it would be unjust to ignore it. We therefore conclude that our final disposition should be that Gloria and Ramon should receive 40% of the costs of their 1975 Act application, and that Yvonne should receive the whole of her costs of the contractual claim.

39. Finally, we would express the hope that this appeal does not spark off a new round of litigation over the assessment of these costs. If the judge's order had had the effect that he hoped it would, of rendering it unnecessary to distinguish between the costs of each application, then that would itself have been a further factor pushing us to try, if it was at all possible, to maintain his order. As it is, for reasons about which he could not have known, the parties' allocation of their costs over the two applications and the assessment disputes to which their figures have given rise made any very simple solution harder to reach. We can only say that the parties should be warned that continued litigation will further erode the substance of what Richard has left behind him. It is time to end this litigation, not with victory or defeat, but with agreement.