Removing or substituting personal representatives

  • Author : Anthony Allston
  • Date : January 2011

T he principles governing the removal or substitution of executors or administrators under section 50 of the Administration of Justice Act 1985 have been highlighted in no less than three recent cases, all decided in 2010. These, in chronological order, are Angus v Emmott1, Kershaw v Micklethwaite,2 and Alkin v Raymond3. Apart from the decision of Lewison J in Thomas & Agnes Carvel Foundationv Carvel4 in 2008, there had hitherto been very little guidance indicating how the court should exercise its discretionary power under this provision. In this article, after a brief reference to the statute and to procedure, it is intended to focus on the approach taken in these three cases and to summarise the main criteria on which applications to the court are likely to be determined.

Section 50(1) of the 1985 Act reads as follows:

1. Where an application relating to the estate of a deceased person is made to the High Court under this subsection by or on behalf of a personal representative of the deceased or a beneficiary of the estate the court may in its discretion –

ii. appoint a person (in this section called a substituted personal representative ) to act as a personal representative of the deceased in place of the existing personal representative or representatives of the deceased or any of them; or

iii. if there are two or more existing personal representatives of the deceased, terminate the appointment of one or more, but not all, of those persons

Therefore s.50(1) (a) will relate to a situation where it is intended to appoint a person or persons as a substitute for the existing personal representative or representatives, while s.50(1)(b) permits the removal of one or more personal representatives (with or without any substitution taking place), but there must always be at least one personal representative remaining.

Applications under the section are made to the Chancery Division usually by the Civil Procedure Rules (CPR) Part 8 claim form, or again they may be made by separate application in existing proceedings. The application may be made either by a personal representative or by a beneficiary, and all the existing personal representatives must be joined as parties, whether as claimants or defendants. A sealed copy of the grant must be filed with the claim form. The procedure is governed by CPR 57.13 and the Part 57 Practice Direction. A contested application is heard by a judge, with or without oral evidence. Where it is desired to appoint a substituted personal representative, the person being proposed must provide a consent in writing to act, and evidence of that individual’s suitability for the office must be filed.

Angus v Emmott

The first of the recent decisions to consider is Angus v Emmott, in which judgment was handed down by Mr Philip Snowden QC (sitting as a deputy High Court judge) on 3 February 2010. The background to the case was both remarkable and tragic. It concerned the estate of Anthony Steel, who died on 29 September 2007. In 1979 the deceased had been convicted of brutally attacking and murdering a young woman, Carol Wilkinson while she was walking to work. He had nevertheless always protested his innocence and after spending nearly 20 years in jail was released in 1998. A campaign to overturn his conviction led by an investigative journalist, Peter Hill, eventually resulted in the conviction being quashed by the Court of Appeal on 28 February 2003. The deceased successfully applied for compensation from the Home Office under the Criminal Justice Act 1988, but under this procedure the quantum of the award, which was likely to be very substantial, needed to be determined by a special Assessor. For this purpose a lengthy written submission had been prepared by counsel. At the time of the death of the deceased, this submission had not yet been forwarded to the Assessor, but the estate would in due course benefit from the compensation awarded.

Under his will the deceased had made modest pecuniary bequests to certain family members, including his sister and brother-in-law Mr and Mrs Emmott, who were the executors, along with the deceased’s partner Mrs Margaret Angus, with whom he had lived following the quashing of his conviction. She was the residuary beneficiary and stood to receive by far the largest part of the compensation. There was undoubtedly long-standing friction between the Emmotts and Mrs Angus, and most notably this included disagreement as to the content of the submission to the Assessor which as co-executors Mr and Mrs Emmott had refused to approve. Accordingly the application to the Court by Mrs Angus included not only the removal of the Emmotts as executors and their replacement by an independent solicitor executor, but also an application under CPR 64.2 for the Court to give directions regarding the disputed submission to the Assessor.

In respect of the application for removal of the Emmotts as executors, the judge was referred to the decision in Carvel, in which Lewison J had turned for guidance to the judgment of Lord Blackburn in Letterstedt v Broers5, a case familiar in the context of applications to remove trustees from office. Letterstedt was an appeal to the Privy Council, and concerned the equitable jurisdiction of the court to remove a trustee if circumstances required such an order. It had been common ground in Carvel that the same principles were applicable to the removal of a personal representative as to the removal of a trustee.

In Letterstedt, Lord Blackburn had quoted at p.385, a passage from Story’s Equity Jurisprudence s.1289:

‘But in cases of positive misconduct, courts of equity have no difficulty in interposing to remove trustees who have abused their trust; it is not indeed every mistake or neglect of duty, or inaccuracy of conduct of trustees, which will induce courts of equity to adopt such a course. But the acts or omissions must be such as to endanger the trust property or to shew a want of honesty, or a want of proper capacity to execute the duties, or a want of reasonable fidelity.’

Having quoted this passage Lord Blackburn went on to say at p.386:

‘It seems to their Lordships that the jurisdiction which a court of equity has no difficulty in exercising under the circumstances indicated by Story is merely ancillary to its principal duty, to see that the trusts are properly executed ... And therefore, though it should appear that the charges of misconduct were either not made out or were greatly exaggerated, so that the trustee was justified in resisting them, and the court might consider that in awarding cost, yet if satisfied that the continuance of the trustee would prevent the trusts being properly executed, the trustee might be removed. It must always be borne in mind that trustees exist for the benefit of those to whom the creator of the trust has given the trust estate.’

Lord Blackburn was therefore emphasising the primary point that the main concern would be the proper execution of the trust in the interests of the beneficiaries. With respect to situations of conflict between a trustee and beneficiaries he said:

‘...if it appears clear that the continuance of the trustee would be detrimental to the execution of the trusts, even if for no other reason than that human infirmity would prevent those beneficially interested, or those who act for them, from working in harmony with the trustee, and if there is no reason to the contrary from the intentions of the framer of the trust to give this trustee a benefit or otherwise, the trustee is always advised by his own counsel to resign, and does so. If, without any reasonable ground, he refused to do so, it seems to their Lordships that the court might think it proper to remove him....’

He qualified this by later adding:

‘It is quite true that friction or hostility between trustees and the immediate possessor of the trust estate is not of itself a reason for the removal of the trustees. But where the hostility is grounded on the mode in which the trust has been administered, where it has been caused wholly or partially by substantial overcharges against the trust estate, it is certainly not to be disregarded.’

In Angus Mr Snowden QC followed Lewison J’s adoption in Carvel of the principles set out in Letterstedt. He cited the comment by Lewison J that the overriding considerations were whether the trusts were being properly executed, and, as Lord Blackburn had put it, ‘the welfare of the beneficiaries’. At paragraphs [108] and [109] of his judgment Mr Snowden emphasised the point that the Letterstedt principles did not in any way limit the power of the court to replace personal representatives to cases of misconduct. In support of this he referred to an extract from Williams, Mortimer & Sunnucks – Executors, Administrators, and Probate, by J. R. Martyn and Nicholas Caddick (19th edn, London, Thomson/Sweet & Maxwell, 2007) at 60-14 and to a similar passage in Underhill & Hayton: Law of Trusts and Trustees, by D. Hayton, P. Matthews and Charles Mitchell (17th edn, London, LexisNexis/Butterworths, 2006) at 73.47 as to the position in relation to trustees, and the Canadian appeal case of Re Consiglio Trusts6, which provides an illustration of trustees being removed where the administration of a trust had become ‘impossible or improbable’ because of the animosity existing between the trustees.

It is relevant in this connection to bear in mind the observation of Lord Blackburn in Letterstedt (quoted above) that friction or hostility between trustees and the beneficiaries are not in themselves grounds for removing trustees, though it is clear that it does become a relevant consideration where relations between the trustees or personal representatives and beneficiaries, or indeed the trustees or personal representatives among themselves, are adversely affecting the proper administration of the estate. As will be seen these considerations were also an issue taken up by Newey J in Kershaw v Micklethwaite.

The judge in Angus took the view that there had been no misconduct on the part of the Emmotts, and he considered some of their objections to the written submission proposed to be sent to the Assessor to have had validity. Nevertheless he was of the view that a situation had been reached ‘....in which there is such a degree of animosity and distrust between the executors that the due administration of Mr Steel’s estate is unlikely to be achieved expeditiously in the interests of the beneficiaries unless some change is made’. He considered whether he should remove the Emmotts, leaving Mrs Angus as sole executor. Having regard to several factors, including the fact that Mrs Angus had herself played some part in the preparation of a statement of the deceased which formed a prominent part of the submission to the Assessor, and which had been criticised by her co-executors, he finally concluded that the safest and most appropriate course to ensure the administration of the estate in the interests of all beneficiaries would be to remove all current executors and replace them with a professional executor, who could take an independent view in progressing the assessment of the compensation claim. In the event Mrs Angus, recognising the good sense of this approach, voluntarily agreed with the appointment of a solicitor experienced in the administration of estates, whom she had already put forward as a possible co-executor with herself if the Emmotts were removed. That solicitor was therefore appointed as a substituted personal representative under s. 50(1)(a) of the Act.

Kershaw v Micklethwaite

On the day after judgment was handed down in Angus, Newey J gave judgment in Kershaw v Micklethwaite. The dispute in that case involved a claim by the son of the deceased that some or all of the three executors of her will should be removed. The testatrix had died in July 2008 and her named executors were her two daughters Mrs Micklethwaite and Mrs Barlow, and an accountant, Mr Humphreys. The son, who was a beneficiary but had been passed over by the deceased as a possible executor, raised a number of complaints about the executors and the manner in which they were administering the estate, contending that the executors should be removed from office under s.50 of the 1985 Act.

The list of objections by the Claimant included (i) the allegation that the Defendants had obtained probate valuations of a farm and some flats included in the estate which were too low (ii) that the executors had failed to keep him informed of the progress of the administration, including providing him with a promised monthly bulletin (iii) that they had failed to identify the extent of the estate properly, in that boundaries to a farm had not been ascertained, and that they had been unaware that the estate was entitled to certain other property assets and (iv) that there was potential for a conflict of interest in that Mrs Micklethwaite and Mrs Barlow might wish to acquire some of the property assets themselves. In addition to this list of complaints the Claimant pointed to the fact that the relationship between him and his executor sisters had broken down and he lacked confidence in their competence to deal with the estate. There had also, it appeared, been other litigation between the Claimant Mr Kershaw and his sister Mrs Micklethwaite in connection with her management of a family company.

The judge dealt in turn with each of the matters complained of and found either that they had no real foundation or were not such as to warrant removal of the executors. In approaching the matter Newey J also proceeded upon the principles elaborated by Lord Blackburn in the Letterstedt case, and which had been followed in Carvel. He firstly rejected the suggestion that an executor could be removed more readily than a trustee and thought that if anything the converse was true, on the basis that an executor might not be expected to exercise discretion to the same extent as a trustee, and his role was likely to be more transient .7 Apart from this, he referred in particular to part of Lord Blackburn’s citation from Story’s Equity Jurisprudence, to the effect that the court would not be induced to remove a trustee by ‘...every mistake or neglect of duty, or inaccuracy of conduct ...’ . He also echoed Lord Blackburn in stating that he did not consider that friction or hostility between an executor and a beneficiary was of itself a reason for removing the executor8. As the judge put it: ‘As I see it the poor relations between the parties need not and should not either prevent or impede substantially the administration of the estate.’

It is interesting to note that in finally rejecting the claim to replace the executors, the judge also placed emphasis on two further points. First, that it was right to take into consideration the fact that the executors had been appointed by the testatrix herself: ‘...a testator’s choice of executors is capable of being of relevance, if on no other basis than because the testator may be expected to have had knowledge of the characters, attitudes and relationships involved which a court will lack’.9 Secondly, he found a factor weighing against the removal of the executors was cost. Changing the existing personal representatives and appointing a fresh professional executor could be expected to increase the costs of administration significantly, to the detriment of the beneficiaries, including the Claimant.10

Alkin v Raymond & Whelan

On 7 May 2010, Mr A.G. Bompas QC, sitting as a deputy High Court judge handed down his judgment in the third of this trilogy of applications under s.50 of the 1985 Act. On this occasion the application was to remove the two executors of the will of Harry Alkin, a retired solicitor, who died in October 2008. The Claimants were his widow and his only daughter Mrs Nicole Price (also acting as litigation friend for the widow). The Defendant executors, Mr Raymond and Mr Whelan were both former business associates and friends of the deceased. In particular the deceased had engaged in several property development projects with Mr Whelan, who was a builder, and with his company, Hill & Whelan Ltd. One of the projects, in Worthing Road, Laindon, Essex, had not been fully completed at the time of the death of the deceased.

The estate amounted to some GBP2.34 million gross, and under the will was divided into two parts, the first constituting a discretionary trust for the benefit of a class of beneficiaries which included the widow and daughter, and the second being the residuary estate, which was held for the widow for life and then for the remaining discretionary beneficiaries. The deceased’s daughter, Mrs Price, had expressed herself to be deeply unhappy about the way the Defendants had administered her father’s estate. In support of this position she advanced a number of reasons why she claimed the two executors ought to be removed. Chief among these was an invoice (no.3453) that Mr Whelan had rendered in relation to the Worthing Road house-building project in which he and the deceased had been involved. The invoice was in the amount of GBP163,000. In addition, there were allegations, including (a) that the executors had inappropriately offered a loan to her former husband to enable him to pay school fees for their two children (as he was required to do under a court order) (b) that they had not made payments under the discretionary trust to the widow and (c) that Mr Whelan’s behaviour towards Mrs Price had been disrespectful, and inappropriately sexual in manner.

Before dealing with the factual basis and substance of the complaints, the judge considered the applicable principles under which executors could be removed. There was no dispute that the principles described by Lord Blackburn in Letterstedt should prevail, the main guide being ‘the welfare of the beneficiaries’. The judge declared that it was obvious that ‘acts or omissions on the part of trustees calculated to endanger the trust property, or which evidence want of honesty on their part or proper capacity to execute their duties or want of fidelity, may justify the removal of the trustees’.11 He accepted, as had been pointed out in Letterstedt,12 that there could be situations in which trustees could be removed even when they had been justified in resisting unfounded or unjustified charges of misconduct, but he also emphasised that in cases of friction or hostility between the trustees and ‘the possessor of the trust estate’ (i.e. the beneficiary or beneficiaries), where that friction had been generated by the beneficiaries themselves, then before removing the trustees ‘the Court would at least need to be satisfied that the friction or hostility was impeding the proper execution of the trusts’.13 Like Newey J in Kershaw, the judge was of the view that in exercising his discretion, considerable importance should be attached to the fact that the testator had chosen the executors: ‘....what is unquestionably relevant in deciding whether or not they should be removed is that Mr Alkin had chosen them in the first place to be his Executors and Trustees’.14 He was referred to the Australian case of Monty v Delmo15 ,where the Court had said: ‘.....the testator’s selection of executor should not lightly be set aside. It should not be disregarded except, at the least, for serious reason’.

After carefully examining the factual basis for Mrs Price’s allegations, the Court rejected all of them as being without substance, except that relating to the invoice for GBP163,000. For example, the Court found that the executors had not acted inappropriately in offering a loan to Mrs Price’s former husband in respect of payment of their children’s school fees, since this would spare the estate the burden of having to meet the fees if the husband did not. In relation to the allegation of impropriety on behalf of Mr Whelan exemplified by his sending her a gift of lingerie at Christmas, the judge described as ‘grotesque’ the criticism that she had found the gift embarrassing, when her evidence was that she had immediately tried on the lingerie, and sent him the text message: ‘perfect fit’.

Crucially, the outcome of the case depended on the judge’s view of the invoice sent by Mr Whelan, which was shown as a debt of the estate for GBP163,000 in the inheritance tax (IHT) return. The facts surrounding the invoice were subjected to close analysis.

The invoice had actually been sent on 30 October 2008, some days after the death of the deceased, though it was on its face dated 29 September 2008, prior to the death. It contained no proper narrative of the items in respect of which the payment was required, and was said to be for ‘extra’ works. The judge found that the invoice was inconsistent with other earlier invoices in respect of the building project, and that if genuine the debt it represented would have eliminated the previously projected profit. The judge was of the view that a ‘breakdown’ that had eventually been produced of the charges comprised in the invoice, had not only been prepared at a later date, but showed that the sum claimed was in reality attributable to a charge towards the overheads of Mr Whelan’s company. Although Mr Whelan claimed that the deceased had agreed to pay such overheads, on the evidence this was rejected by the Court, which decided that the invoice ‘was not a properly calculated bill for money due to Hill & Whelan Ltd’. The judge did not accept that anything like this sum was owed by the estate. He therefore decided that Mr Whelan should be removed as an executor stating:

‘He has stoutly sought to justify an invoice which does not bear scrutiny. In short he cannot be depended upon to administer the estate in the interests of the beneficiaries rather than his own.’ 16

Since the co-executor Mr Raymond had fully supported the case put forward by Mr Whelan in respect of the invoice and purported to be quite satisfied that these costs were genuine, the judge decided that he too would have to be replaced. He then appointed two replacements for the executors who had been removed, but not including Mrs Price, whom, he felt, would find it difficult to hold a reasonably objective balance between the competing claims on Mr Alkin’s estate.

Conclusions

All three cases have thrown more light on the principles derived from Lord Blackburn’s judgment in Letterstedt v Broers, which will govern applications under s.50 of the Administration of Justice Act 1985. These can be summarised as follows:

The paramount and guiding principle is whether the estate can be properly administered , or in Lord Blackburn’s words: ‘the welfare of the beneficiaries’.

The principles to be followed where removal of a personal representative is in issue, are the same as apply to a claim to remove a trustee.

The court is unlikely to order the removal of a personal representative unless a clear and compelling reason is shown to justify doing so. Applications based on insubstantial complaints or complaints which do not sufficiently affect administration will be rejected.

Misconduct of the personal representatives (e. g. evidencing a lack of honesty or competence) can obviously be a ground for their removal, but not every mistake or neglect of duty will provide good reason for removing them from office. The essential question will be whether the failing complained of is likely to prevent the proper administration of the estate.

Similarly, friction, hostility, or a breakdown in relations between personal representatives (either among themselves or between them and the beneficiaries of the estate) can be a good reason for removing the personal representatives. But to remove a representative on this ground it will again be necessary to show that the friction/hostility is detrimentally impacting on the proper administration of the estate; this is particularly so where the beneficiaries themselves have been responsible for the breakdown in relations.

A relevant factor in deciding whether to remove an executor is that the executor will have been the personal choice of the testator himself.

Other circumstances, such as the added costs which the estate would suffer if replacement personal representatives were appointed, might be a relevant consideration on the facts of a particular case.

Anthony Allston is a barrister practising at 3, Dr Johnson’s Buildings, Temple, London. The author acted for the Claimant in the Angus case

[2010] EWHC 154 (Ch); [2010] 1 WTLR 531
[2010] EWHC 506 (Ch)
[2010] WTLR 1117
[2007] EWHC 1314 (Ch); [2008] Ch 395
(1884) 9 App Cas 371
(1973) 36 DLR (3d) 658
Kershaw para [9]
Kershaw para [28]
Kershaw para [14]
Kershaw para [34]
Alkin [27]
(1884) 9 App Cas at 386
Alkin [31]
Alkin [35]
[1996] 1 VR 65
Alkin [152]

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