What are the executors’ duties as regards distribution of an estate in circumstances where there is a likelihood that claims will be made against the estate in the future? This was the exact question the court had to answer in the case of Re the estate of Studdert (deceased) King and another (as personal representatives of the deceased) v Bewick and others (as trustees of the EAC Educational Trust) .
Mr Stubbert died, aged 78 on 9 August 2017. By his will dated 3 February 2016 he appointed the partners of Nockolds solicitors and a third person as his executors. A grant of probate was issued to the executors on 10 January 2018.
For the purposes of the grant of probate, Mr Stubbert’s estate had a net value of £4,699,105.00. His will was clear in that it provided for a number of specific and pecuniary legacies to individuals and to church councils with the residuary of the estate being left to EAC Educational Trust (“EAC”). EAC is a registered charity. The trust was created by Stubbert on 17 July 1985. It aims and objectives are to relieve poverty and to advance education for the benefit of the public and particularly among the families of clergy of the Church of England, single parent families and other poor families.
The trustees of the EAC (who were defendants to the proceedings) very much wanted to benefit from the bequest made by Mr Stubbert but agreed not to take any part in the proceedings and to leave it to the court’s discretion as to the outcome of the claim.
What was the difficulty?
The difficulty was that Mr Stubbert was a convicted paedophile. As such, the personal representatives recognised that there may be claims against the estate from survivors of historic abuse in the future. As such, they sought the Court’s guidance on their duties as regards personal representatives.
Proceedings were issued by the personal representatives on 27 September 2017. By those proceedings they sought directions as regards distribution of Mr Stubbert’s estate.
What are the personal representatives’ obligations?
The obligation placed on the personal representatives is to ascertain the debts and liabilities of the deceased and arrange for their payment in the due course of administration of the estate. If they fail to fulfil their obligations they may be personally liable.
In addition, however, Section 1(1) of the Law Reform (Miscellaneous Provisions) Act 1934 provides that “… on the death of any person after the commencement of this Act all causes of action subsisting against or vested in him shall survive against or, as the case may be, for the benefit, of his estate” (save for causes of action for defamation).
Section 27(2) of the Trustee Act 1925 (“the Act”) affords some protection to the personal representatives in that it provides they “… shall not … be liable to any person of whose claim the … personal representatives have not had notice …” provided they have advertised in the form required by the Act but it is unclear whether they would be treated as having had notice of a class of claims which they believe may exist in relation to which the identity of the possible claimants is unknown.
What did the court do?
Initially, the court directed the personal representatives to make enquiries and consider a number of avenues which might lead to survivors giving them an opportunity to make a claim.
Unfortunately, there was little material for the personal representatives to work with in order to ascertain the identity of survivors. They did place an advertisement in the media in the form required by the Act but the prospect of the advertisement being seen, let alone acted upon, was extremely slight. Indeed, despite the passing of nearly three years since Mr Stubbert’s death no claims had been intimated and the personal representatives remain unaware of the identity of any possible claimants.
In accordance with the court’s directions, the personal representatives also explored the possibility of setting up a website as a facility to allow potential claimants to contact the personal representatives. The evidence provided to the court in this regard did not warrant the setting up of the website (without further justification for it) and so the court then directed that personal representatives obtain expert advice from a lawyer with experience of dealing with claims made (and not made) by survivors of historical abuse.
The personal representatives instructed David Greenwood of Switalskis solicitors who produced a report dated 5 December 2019. Mr Greenwood has extensive experience of dealing with claims made by the victims of child sexual abuse and has been an executive member of the Association of Child Abuse Lawyers since 2001. In light of his report the court was satisfied that Mr Studdert had committed historic sexual assaults in England and Wales and outside the jurisdiction in Poland, Denmark and Italy.
As a result the court made an order declaring that the estate should not be distributed (save for the small amount to pecuniary legatees) until further order. Having regard to Mr Greenwood’s report the court declared that whilst no victims may come forward there needed to be a reasonable opportunity for claims to be made and a bar on distribution beyond the pecuniary legacies was proportionate for the time being. The court would not, at this stage, commit to how long that bar should remain in place but did give permission to the defendants to apply for the bar to be lifted.
In the meantime, the court also directed that the personal representatives should now take steps to create dedicated websites in English, Polish, Danish and Italian languages providing details of Mr Stubbert’s date of death, criminal convictions and a facility to allow any claimants to contact the personal representatives’ solicitors via the website as regards potential claims. The website should also include a copy of the court’s latest order.
In addition, the personal representatives were ordered to create entries on Twitter, Facebook and Wikipedia in all four languages to signpost any potential claimants towards the websites as created.
Lastly, the personal representatives were directed to give notice of the court’s order and Mr Stubbert’s criminal convictions to the Polish Embassy in London with an invitation to provide further information about the investigations that were being carried out.
It remains to be seen what emerges from the steps that the personal representatives were ordered to take, although clearly a bar on distribution of the estate should not remain in place indefinitely. Ultimately, the court will need to find a balance between the execution of the personal representatives’ duties to identify creditors of the estate and their duty to distribute the estate in accordance with the terms of the will. The matter will therefore be reviewed by the court again in a few months and in light of whatever response, if any, is received to the websites that have now been set up by the personal representatives’ solicitors.
Whilst the matter has not yet reached a final determination, this case illustrates the importance of ensuring that personal representatives seek guidance from the court as regards distribution of estates in circumstances where there are potential claims so as to ensure their personal liability is protected as well as the interests of beneficiaries generally.
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.