EWHC reduces successful claimants’ costs award because secondary claim failed

Monday, 14 August 2023
The England and Wales High Court (EWHC) has made a reduced costs award to the Colicci family even though the children won their dispute against their parents' estate earlier in 2023.
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The dispute concerned a deed executed in 2016 by the parents, Ernesto and Josephine Colicci, in which they promised to make wills leaving their family catering business to their children Robert and Rosanna Colicci (the claimants). At that point, Ernesto and Josephine had already divorced and Ernesto had remarried. Ultimately, he failed to comply with his promise. He made a new will leaving his shares to his second wife Nora Grinberg (the defendant).

When he died in 2021, Josephine and the claimants contested the new will and instead sought to enforce the 2016 deed. In May 2023, the England and Wales High Court agreed with them, holding that the 2016 deed was legally binding and had removed their freedom to dispose of their shares on death. It dismissed the defendant’s argument that the 2016 deed had been superseded by an agreement made between the shareholders the following year.

The claimants’ case had been based principally on the interpretation of this 2017 agreement, which they argued had left the 2016 deed still in force. This claim was upheld and won the case for them. However, in case they lost the interpretation claim, they had also brought an alternative claim for rectification of the 2017 agreement. In the event, the EWHC judge Mark Anderson ruled that he would have rejected the rectification claim if the interpretation claim had failed first. But the defendant, as executor of the estate, had had to defend both claims, which had substantially increased her own legal costs as well as those of the claimants.

When the EWHC later came to consider the question of costs, it made an order that relieved the defendant of having to pay the claimants' costs to the extent that they were increased by that issue. However, because of the significant overlap between the two issues, it was impossible to separate these costs out into discrete amounts. The court also considered the Civil Procedure Rules 1998, specifically 44.2(4)(b) on general rules on costs. However, it found that the rules apply only where there has been partial success by an otherwise unsuccessful party, whereas here the defendant's case had failed completely.

The EWHC resolved the dilemma by ruling that the claimants should receive only 40 per cent up of their GBP389,000 costs paid up until 23 March 2022, which was the date their Civil Procedure Rules Part 36 settlement offer expired. The defendant disputed that that offer was effective under Part 36, but the EWHC decided that it was.

However, the court also awarded all costs incurred after that date against the defendant on the indemnity basis and ordered her to make an interim payment on account of costs in the sum of GBP165,000 (Colicci v Grinberg (Costs) 2023 EWHC 2075 Ch).

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