Removal of Executor
WSPA, BUAV and Advocates for Animals v Bowman (Unreported) January 2008
In response to the residuary beneficiaries' enquiries, B provided a copy of the will purportedly signed by L confirming that she wanted to retain her right to live at G's property. B also claimed that G gave him her new sports car shortly before her death.
It appeared that B was living in the property. B said that he intended to administer the estate in accordance with G's wishes which were not necessarily those expressed in the will. He failed to provide complete information about the estate administration. He provided a valuation for the property which was some £100,000 lower than an independent valuation obtained by the charities. The charities' solicitor visited L and it was apparent that L had lived in sheltered accommodation for several years and she had no intention of living in the property.
The charities applied to the High Court for the removal of B. Master Price confirmed that, in exercising its discretion, the court should give considerable weight to the wishes of the beneficiaries. It is not necessary for there to be any fault or wrongdoing on the part of the executor. Instead the court must consider what is expedient to the administration of an estate in the context of each individual application.
Master Price ordered that B should be removed as executor and replaced by an independent professional executor stating to B that he “should have backed down at an early stage”.
In light of the charities' warning B (on no less than seven occasions) that they would seek costs of the application against B personally if he did not stand down voluntarily, Master Price ordered that B pay the charities' costs including a payment on account of £6,000. Master Price also refused permission to appeal.
This was an application relating to a property bought by Mr Tackaberry (D). The application was brought by D's grandsons (C) who were named as executors of their respective fathers' estates. The first defendant was the sole executor of D's estate.
C claimed that D held the property on trust for himself and seven of his nine siblings “as were living and if more than one in equal shares” and alternatively on trust for himself and seven of his nine siblings “in equal shares”.
The judge held that C failed to discharge the burden of proof to show that D held the property on either of the trusts set out above for the following reasons.
- (i) The property was bought in D's sole name so the burden of proof rested on C.
- (ii) D provided the whole of the purchase price either from his own money or from family loans which were repaid. At the time of purchase D was in full time employment and there was nothing to suggest that he could not have repaid the loans from his own resources.
- (iii) There was evidence of an agreement by D that any of his siblings would be entitled to an interest in the property.
- (iv) D dealt with the auctioneers selling the property and the solicitors treated D as their client who was acting on the purchase.
- (v) There was insufficient evidence to show who the intended beneficiaries of the alleged trust would be.
- (vi) D's conduct in relation to the property was inconsistent with the existence of a trust, for example leaving the property in his will to four of his siblings who on C's case were already entitled to it jointly with D.
- (vii) The fact the property was used as an assembly point for the family did not assist C's case.
- (viii) There was no evidence that any of the siblings acted to their detriment in reliance on any agreement with D that they would have an interest in the property.
- (ix) There was a delay in bringing the proceedings about 20 years after D's death when the existence of D's second will giving the property to his carer came to the family's attention.
The claimant (C) had been in a relationship with the deceased (D) for 12 years. C did not receive any provision under D's will. The executors made an application for possession of the flat that C shared with D (Flat 8). C applied for a declaration that she had a beneficial interest in the flat that she shared with D (the legal title was in D's name) and for reasonable provision from D's estate pursuant to the Propriety Estoppel and Claim under Inheritance (Provision for Family and Dependants) Act 1975.
In order for C's proprietary estoppel claim to succeed she had to show evidence of: an agreement or an assurance by D that the property was to be shared beneficially; reliance by C on that assurance; and detriment suffered by C as a result of relying on that assurance.
The judge concluded C's evidence that D had said that she could live in his home and have a roof over her head was insufficient to establish an agreement in relation to the property and so C was unable to establish a claim to a beneficial interest in Flat 8.
The estate was valued at £2.2m. Under the will, D's ex-wife and son were appointed as executors. After legacies of £75,000 to each of D's siblings the residue passed to D's son. C's claim was as a cohabitee. The judge considered C's needs and resources as well those of all the beneficiaries under the will. C's resources included a share of D's pension policy providing an annual income of £20,000, a car and a half share in an apartment in Spain valued at between £110,000 to £200,000. C's liabilities were the mortgage on Flat 8 and all her outgoings, which were estimated at just over £38,000.
The judge was satisfied that there was a shortfall of about £18,000 between C's income and her outgoings which was not met by C's interest in the Spanish apartment; accordingly the will did not make reasonable provision for C's maintenance.
The judge ordered the transfer of Flat 8 into C's name mortgage-free plus £200,000 which, when added to the pension policy of £395,000 and the £110,000 interest in the Spanish property, would yield an annual income of between £30,000 to £40,000.
All parties were responsible for their own costs.
In Hartshorne v Gardner, the judge (Sonia Proudman QC) had the invidious task of deciding where the deceased, who had died in a road accident and whose body remained under the authority of the coroner, should be buried. The claimant (C), the deceased's father, contended that Kington, where the deceased had come to make his home in the last year of his life, was the most appropriate location for the interment; on the other hand, the deceased's mother (D) contended that the deceased ought to be buried in Worcester, where he was brought up and where C and D both lived.
Ordinarily the problem would not arise because of the general rule that “the person entitled to the grant of administration ha[s] the duty and the right to make the funeral arrangements”, although the court may still be able to override a personal representative's decision (see, eg University Hospital Lewisham NHS Trust v Hamuth [2006] EWHC 1609 (Ch), [2006] All ER (D) 145 (Jan) at para 16). However, the general rule did not assist in the present case because both C and D were equally entitled to a grant of administration.
The judge recognised that “the most important consideration is that the body be disposed of with all proper respect and decency and, if possible, without further delay”. Subject to that, two sorts of factors were relevant in a case such as the present: (i) those that do, or might be expected ,to reflect the wishes of the deceased himself and (ii) the reasonable wishes and requirements of the family and friends he leaves behind. The first element of the first factor was of little assistance, because the deceased (who was aged just 44) had had no reason to contemplate his death or the arrangements he might want. Therefore the judge considered the case on what might be expected to reflect his wishes, as well as the wishes of those left behind.
According to the judge “virtually all the evidence” pointed in favour of C's contention of Kington: although the fact that his mother (with whom the deceased had, in the last years of his life, at best a tangential relationship) would face difficulties in travelling the 50 miles from Worcester to Kington was “a weighty factor”, it was outweighed by the fact that the deceased had made his home for most of the last eight years of his life in Kington and that was also where his brother, with whom he was close, and his fiancée lived, as well as where his father wished him to be buried.
G died in 2001 leaving four adult sons and their mother, his widow (S). Prior to his death, G had operated as sole trader a scrap metal and vehicle recovery business from two sites in Ipswich. G's will provided for a trust for sale of the family home (which was in G's sole name and worth around £340,000), albeit subject to S's right to live there during her life; an absolute gift of the goodwill of the business to his sons; and for the remainder of his estate (including all other business assets, such as premises and plant/machinery) to be held on trust for his wife and sons in equal shares.
S, who had been G's wife and partner for over 20 years, contended that the will failed to make reasonable financial provision for her and applied for such provision to be made.
The first problem was valuing the estate. Since G's death in 2001, the personal representatives had permitted the sons to carry on operating the business, in which they had all worked from an early age (at the expense of their own formal education), without reference to the fact that it was now comprised in the estate.
Furthermore the sons had, by their own hard word and skill, significantly developed the business, replacing plant/machinery and pushing up profits significantly, and had even gone as far as incorporating it.
However, a strange feature of the case was that, despite their relatively significant value, neither party had obtained or sought to adduce any evidence of the value of the business and the business assets. This was a cause of some concern for the judge.
However, conscious of the parties' desire to have matters resolved without further expense and at their invitation, he proceeded “with some real trepidation” to resolve the issue on a “somewhat crude” and “broad brush” basis. Taking into account the inherent value of the goodwill of the business, but allowing a fairly generous allowance for the sons' efforts, hard work and skill since the deceased's death, he arrived at a figure of between £600,00–800,000. This meant a notional valuation of the estate at between £1.15m and £1.35m. On that basis, and perhaps unsurprisingly, the judge (Paul Chaisty QC) had “no hesitation in concluding that [G's] will failed to make reasonable financial provision for his wife and partner of over 20 years and mother of his four sons”.
The judge then had to decide what provision should be made, in the light of the myriad factors outlined in s 3 of the 1975 Act. Interestingly, in addition to all the usual factors—such as S's financial needs, her contribution to the family's welfare, and the sons' needs—the judge held that a further relevant factor in this particular case (see s 3(5) of the 1975 Act) was “the impact of any order [on] the continuation of the business” and “the difficult circumstances which prevail in extricating the estate's interest in the current business”.
The parties agreed that a “clean break” by way of lump sum was the most appropriate. On that basis, the judge awarded S the matrimonial home absolutely and a lump sum of £410,000 (ie enough to provide what he had found to be S's reasonable needs of £25,000 per annum). That amounted to a total of £750,000, ie more than half the estate.
A recent Law Society survey shows practitioners support the society's view on the European Commission Succession and Wills green paper process: the government should actively lobby on any proposals coming out of Europe in this area.
Firm proposals from the Commission are expected in 2009, to be implemented Europe-wide. This will affect UK practitioners whether or not the government opts in.
HMRC has updated its pages on non resident trusts in relation to liabilities to income tax and capital gains tax (CGT). Although the trustee residence rules are set out, there is no further guidance on the issues regarding foreign professional trustees.
There is a list of telephone numbers for enquiries on specific aspects such as CGT, transfer of assets abroad and foreign estates at www.hmrc.gov.uk/cnr/nr_trusts.htm.
