Posted: Thursday, 10 October 2024 @ 11:41
There is some very useful analysis on removal of executors in the recent case of Lane v Lane.2024 EWHC 275 (Ch). (Judge, Jonathan Hilliard KC sitting as Deputy Judge of the High Court)
"The legal test is s.50 of the Administration of Justice Act 1985 which gives the Court the power in its discretion to appoint a person to act as personal representative in place of the existing personal representative. In the same way that the supervisory jurisdiction of the Court in relation to trusts is exercised to further the interests of the trust in question as a whole, so the touchstone under s.50 of the Administration of Justice Act is what is in the interests of the beneficiaries of the estate as a whole.
Those principles were set out in Letterstedt v Broers (1884) 9 AC 371 (PC) in the trust context and in Thomas & Agnes Carvell Foundation v Carvell [2008] Ch 395 Lewison J (as he then was) accepted that the same principles applied under s.50.
While the cases helpfully summarise the key criteria to which the Court should have regard, there is as Chief Master Marsh emphasised in his 2020 annual lecture to the Association of Contentious Trust and Probate Specialists- a danger that lists of criteria obscure the essential simplicity of the test in this area.
The Court is is examining what it considers is in the interests of the beneficiaries as a whole to decide whether and how to exercise its s.50 powers.
It was submitted that it was necessary to show misconduct that endangered the trust property. That is not the case. To take one example, even without misconduct, one can reach a point applying the general touchstone where the breakdown of the relationship between the executor and beneficiary means that the due administration of the estate is unlikely to be achieved expeditiously and the personal representative should be removed.
If, for whatever reason, it has become impossible or difficult for the administration to be completed by an existing personal representative, then an order for their removal will usually follow.
Of course, as stated in Carvell by reference to Letterstedt, friction or hostility is on its own not enough.
Rather one must enquire as to what effect if any it is having on the administration of the estate. As Williams puts it, the overriding consideration is whether the administration of the estate is being properly carried out or, putting it another way, the welfare of the beneficiaries."
In addition, of note in the case was the approach was taken by the Judge to (lack) of financial information provided by the Executor.
"I would have expected to have been provided with an up-to-date account of the estate and its assets by the Executrix, but none was provided....I would have expected an executrix with her lawyers dealing with the administration of the estate to be able to explain what the current state of the estate is, particularly faced with an action for her removal on the grounds that the estate was not being administered properly and in circumstances where the Claimant had stated in her evidence that no adequate estate accounts had been provided and that the Executrix should explain precisely the assets and liabilities of the estate."
Effectively Executors are under more financial scrutinty.