The recent High Court case of Hudman V Morris provides a useful reminder of how the court approaches applications for the removal of executors.
The claim concerned the estate of Barry Leonard Morris (“Barry”) who died on 2 February 2019, aged 93. Barry had executed a will dated 10 April 2013 which provided for his residuary estate to be divided equally between his five children with two of the children, Alan and Sharon being appointed executors of his estate. Kim, one of the children had sadly died by the time of this hearing.
The claim was brought by Sharon seeking the removal of Alan as an executor pursuant to Section 50 of the Administration of Justice Act 1985 (“Section 50 proceedings”) or, alternatively, Section 116 of the Senior Courts Act 1981. Sharon was supported in her claim by her other two surviving siblings as well as Kim’s son, Aaron who inherited his father’s share under Barry’s will. Sharon sought the appointment of an independent administrator. She denied that there were any grounds for her to be removed but was willing to step down if Alan was removed. Alan disputed Sharon’s claim. He too sought the appointment of an independent administrator but to act with him with Sharon being removed.
As is usual in Section 50 proceedings, all evidence was in written format and there was no oral evidence heard at the final hearing. The evidence comprised witness statements from Sharon and Alan together with separate statements from both of their proposed independent administrators.
Prior to Barry’s death, Nigel Jones (“Nigel”) of law firm, JMC Law had been appointed by the court of protection as his deputy to manage his financial affairs with a previous power of attorney in Alan’s favour having been revoked. Following Barry’s death, Sharon and (eventually) Alan instructed Nigel to deal with the administration of Barry’s estate. In December 2019, however, Nigel terminated the firm’s retainer on the grounds that the instructions received from Alan and Sharon were contradictory – the differing instructions essentially centring around the draft estate accounts as prepared by Nigel and in particular, the inclusion of a sum of just under £3,000.00 as a debt, being expenses incurred by Roger, another of Barry’s children, following a trip to Australia to help deal with the administration of his uncle’s estate. The siblings’ uncle had died intestate in May 2014 and Roger maintained that his father had asked him to go to Australia to assist with his estate and to bring back some mementos and said that his father agreed to pay his expenses for doing so. This was supported, at least in part, by contemporaneous documentation and the court of protection had already made an order giving Nigel authority to reimburse Roger his expenses if “he considered it in Barry’s best interests to do so”.
Nigel did consider it in Barry’s best interests to do so but before he could make arrangements to reimburse the monies, Barry died. In the circumstances, Nigel advised the executors that it should be included in Barry’s estate accounts as a debt. Sharon agreed to this but Alan did not.
Sharon’s contention in the proceedings was by his words and conduct Alan had shown that he could not be expected to carry out the administration of the estate fairly, properly and effectively in the interests of all the beneficiaries. This was supported by further allegations regarding Alan’s hostility towards his siblings, allegations that his siblings could not be trusted, had tried to take advantage of Barry’s vulnerability for this own personal financial gain and tried to impose their own will on Barry, that Sharon had “more than likely” unduly influenced Barry into making his will and that Roger had bullied Barry.
The legal principles
The court’s powers under Section 50 are discretionary in nature. Each case turns on its own facts but there are some legal principals which the court considers to assist in determining whether or not to exercise its discretion. These principles were summarised by Chief Master Marsh in the case of Harris V Earwicker wherein he stated:
“i) it is unnecessary for the court to find wrongdoing or fault on the part of the personal representatives. The guiding principle is whether the administration of the estate is being carried out properly. …
ii) If there is wrongdoing or fault and it is material such as to endanger the estate the court is very likely to exercise its powers under Section 50. If, however, there may be some proper criticism of the personal representatives, but it is minor and will not affect the administration of the estate or its assets, it may well not be necessary to exercise the power.
iii) The wishes of the testator, … concerning the identity of the personal representatives is a factor to take into account.
iv) The wishes of the beneficiaries may also be relevant. I would add, however, that the beneficiaries … have no right to demand replacement and the court has to make a balanced judgment taking a broad view about what is in the interests of the beneficiaries as a whole…
v) The court needs to decide whether, in the absence of significant wrongdoing or fault, it has become impossible or difficult for the personal representatives to complete the administration of the estate… The court must review what has been done to administer the estate and what remains to be done. A breakdown of the relationship between some or all of the beneficiaries and the personal representatives will not without more justify their replacement. …
vi) The additional cost of replacing some or all of the personal representatives, … is a material consideration. The size of the estate and the scope and cost of the work which will be needed will have to be considered.”
In this case, Alan put forward 11 points in support of his case, all of which were considered by Master Clark and the more salient of which are discussed below.
The expenses claim
Sharon’s counsel submitted that over the years Alan had become fixated with the expenses claim and treated his own position as conclusive without recognising or understanding that there was a factual dispute which needed to be resolved in the course of the administration.
Alan’s counsel submitted that his objections were well-founded and contended that the proper course to resolve the dispute would be for Roger to issue a small claim against the estate and for Alan to represent the estate in that claim. The master disagreed. Roger was not a party to the claim and this course would not prevent a conflict between the executors as to how the claim should be resolved.
Alternatively, Alan’s counsel submitted that Sharon could have issued proceedings under Part 64 of the Civil Procedure Rules 1998 seeking directions regarding the payment of the expenses and joining both Alan and Roger to those proceedings. Once again, the master disagreed. The administration of an estate does not require litigation to be brought before the grant – executors have power under Section 15 of the Trustee Act 1925 to accept, reject or compromise claims against the estate; there is no need for this to be done before the grant.
Finally, Alan’s counsel submitted that the other four beneficiaries could simply have agreed to bear Alan’s share of the expenses between them at a “cost” of £141.80 each. In the master’s view, this cut both ways – Alan’s agreement to the expenses being paid would have reduced his entitlement in the estate by £567.00, a small sum in comparison to the costs of any type of court proceedings.
Having regard to all the circumstances, the master considered that Alan’s refusal to contemplate the inclusion of the expenses claim as a debt was both wrong and unreasonable and led directly to the deadlock in the administration of Barry’s estate. His conduct showed him putting his own personal views and interests above those of the estate.
Hostility to other beneficiaries
Whilst the master accepted that a poor relationship between the executor and beneficiary was not in itself sufficient to justify the executor’s removal, he accepted Sharon’s counsel’s submissions that Alan had shown sustained, overt and substantial hostility towards his siblings.
Alan’s counsel submitted that the material showed only that there was what he referred to as a difficult family dynamic. He invited the master to take a “robust” view in applying the criteria of whether Alan’s conduct justified concluding that continuing as an executor endangered the interests of the beneficiaries. He submitted that Alan’s conduct did not show that he was not capable of selling the house and distributing the estate.
The master did not accept these submissions. The evidence showed real and significant hostility by Alan towards his siblings. The master considered it significant that Alan’s counsel did not try to justify his hostility or suggest that it was appropriate. In the master’s judgment the level was such that Alan could not be trusted to act fairly and conscientiously and to administer the estate impartially in the interests of all the beneficiaries.
Alan’s conduct as the deceased’s attorney under and in relation to the power of attorney
Alan had, in recent years, been involved in a number of issues/disputes concerning the property and welfare of Barry. These were extensive including, for example, maintaining that Barry had capacity to grant the power of attorney in his favour in 2016 whilst repeatedly stating him as being “mentally ill” and unable to manage his affairs in 2014, executing the power of attorney without obtaining a medical assessment of Barry’s capacity to grant it and lengthy and fruitless correspondence with Nigel regarding Barry’s capacity, care requirements and well-being when Nigel was an independent professional and the relevant decisions had been his to make as Barry’s court appointed deputy.
Alan’s counsel submitted that his actions were not irrational and did not relate to his ability to administer the estate going forward. The master agreed that his views were not irrational but what cast doubt on his ability to administer the estate was his inability to accept Nigel’s decisions and move forward and his insistence on repeatedly trying to re-open these matters.
In the master’s view the correspondence also demonstrated Alan’s unbalanced and at times strident and discourteous approach to his siblings. Sharon’s counsel submitted, although Alan said in his witness statement that the basic problem was that Sharon could not recognise and accept that he might have a valid view which was different to hers, this was the problem that one saw with Alan himself. The master accepted Sharon’s counsel’s submissions that Alan could not be expected to display the reasonable, structured and objective approach to matters involving Barry’s estate and his siblings’ entitlements under the estate which was essential to the proper and effective administration of the estate.
Having regard to the above matters (and other more minor points) the master was satisfied that Alan’s conduct in relation to the expenses claim, his intense and ill-founded hostility towards his siblings and his conduct in relation to the power of attorney showed that the proper and effective administration of the estate was threatened by his continuance as an executor. Accordingly, he made an order removing both Sharon and Alan as executors and appointed Nia Wharry, Sharon’s proposed alternative administrator, as the substitute personal representative.
This case is a good example of where the court will step in and remove an executor in circumstances where the relationship between the executor and the beneficiaries has broken down. In this particular case, the breakdown of his relationship with his siblings coupled with Alan’s conduct, was sufficient to demonstrate that this would have adversely affected the administration of the estate and was thus sufficient to justify his removal.
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.