Removing Personal Representatives

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Where there is friction between personal representatives, or between a beneficiary and a personal representative, either side may apply to the Court under section 50 of the Administration of Justice Act 1950 for their removal or substitution. This is what happened in the cases of Alkin & anr v Raymond & anr (Chancery Division) [2010] WTRL 1150 (“the Alkin Case”) and Dobson v Heyman [2010] WTLR 1151 (“the Dobson Case”).

 

The Facts

In Alkin the claimants were the deceased’s wife (W) and daughter (C). The executors were R and P. P was a builder who worked with H property developing. The Will left:

• A legacy to the trustees to the value of the NRB to be held on discretionary trust for W, C, C’s children and other issue and Jewish Care (a charity); and

• The residuary estate on trust for W for life and thereafter the other discretionary beneficiaries.

 

In the course of administration both executors authorised the payment by the estate of an invoice from P’s company for a large sum in respect of ‘extra works’ on an existing development project.

 

C also alleged that P had behaved improperly towards her.

 

C’s relationship with the executors broke down and in June 2009 she applied to remove and replace them.  Included in evidence was a letter from P to C which suggested she must meet all IHT payable due to PETS made in the deceased’s lifetime.  It was asserted that this was evidence of hostile attitude towards C.

 

In the Dobson Case the appellant was the sole proving executor of the estate. The principal asset was a house worth £190,000 and the deceased had created life interest trusts over the property for the benefit of his sister and the appellant. However, the appellant’s life interest was determinable on the death of the sister, at which point the house was to be sold and proceeds split between the granddaughter (who was the claimant) and the appellant.

 

The claimant instructed solicitors, who wrote to the appellant requesting information in relation to the estate in early 2006. In the absence of a satisfactory response, in mid 2007 the claimant commenced proceedings for the executor’s removal.

 

In response the appellant wrote a letter to court explaining the steps he had taken as executor.  It was evident that he was acting without professional advice.

 

The Courts’ decisions

In the Alkin case it was held that P should cease to be an executor and R should also be removed as he chose to stand with P.  Two independent executors were appointed.

 

In reaching its decision the Court commented that trustees might be removed even where they have been justified in resisting unfounded or exaggerated charges of misconduct.

 

It also held that friction or hostility between trustees and the immediate possessor of the trust estate was not itself reason for the removal of the trustees. Where the friction or hostility was with someone who was merely a discretionary beneficiary, it would be relevant to form a judgment of the ability of the trustees to give proper consideration to the claims of that beneficiary, as well as the other beneficiaries.

 

It was a significant factor that the defendants had been chosen by T and this was not to be lightly put aside. 

 

However, the Court held that the invoice submitted by P’s company and paid by the executors was not a properly calculated bill and accordingly P could no longer be depended on to act in the interests of the beneficiaries rather than his own. R was unable to give a satisfactory explanation as to what he did to satisfy himself that the invoice was proper before authorising its payment and the Court held there was no basis for distinguishing him from P.

 

At the initial hearing in the Dobson case the Judge ordered the removal of the appellant as executor. The appellant appealed. On appeal it was held that, aside from allegations about conduct (that were disregarded), this was not a case of positive misconduct but the overriding consideration of the court was whether the trusts were being property executed for the good of the beneficiaries.  It was fair for the court to take a pragmatic view with regard to the beneficiaries’ views and the interests of the estate.

 

It was clear the appellant did not know what his duties were and there was friction between the parties.  In light of the value of the estate and the need to reduce the burden of costs there was therefore reason to dismiss the appeal.

Comment

Both these cases provide interesting guidance on the circumstances where the Court will take the step of removing an executor. It is clear from the decisions that, whilst this is not a step that will be taken lightly, where the executor is no longer considered to be acting in the interest of the beneficiaries or the estate, the Court will step in.

 

Russell Simpson

Cripps Harries Hall LLP

October 2010