When disputes arise
If a beneficiary believes that an estate is not being properly administered, then it is possible for them to apply to the court to substitute or remove an executor or personal representative. However, we generally recommend that attempts are made to resolve the dispute at an early stage to avoid going to court if possible.
Court proceedings should always be viewed very much as a last resort. However there will be cases where the only way of of seeking to achieve a resolution will be by means of application to the court.
Applications to remove executors and personal representatives are either made before a grant of probate has been issued or after. Most applications to substitute or remove an executor or personal representative are made to the High Court under section 50 Administration of Justice Act 1985.This usually deals with the removal of executors and administrators after the grant of probate. An alternative procedure under section 116 Senior Courts Act 1981 can be used where the executor has not yet been appointed under a grant of probate and is made to the Probate Registry.
Section 50 states that:
“(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—
(a) appoint a person (in this section called a substituted personal representative) to act as personal representative of the deceased in place of the existing personal representative or representatives of the deceased or any of them; or
(b) 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.”
One of the leading cases on how to remove an executor remains the Privy Council decision in Letterstedt v Broers [1884] UKPC 1 in which the Privy Council confirmed that where the administration of the trust or estate is likely to be frustrated then an executor may be removed. However, the court will not generally remove an executor simply because there is some friction or hostility between the executors and beneficiaries.
In recent years, a number of decisions have provided useful guidance as to how the courts view and are likely to determine such applications.
Angus v Emmott [2010] EWHC 154 (Ch)
This case emphasised that while friction or hostility between personal representatives and beneficiaries is a relevant consideration, it is not, on its own, a reason to remove an executor or personal representative. It is only when the proper administration of the estate or the welfare of the beneficiaries is being adversely affected that removal will be considered.
The deceased had been wrongly convicted of murder and had spent two decades in prison. The main asset in the estate was the compensation award from the Home Office for wrongful conviction. The executors were the deceased’s lover, Mrs Angus, and the deceased’s sister and her husband, Mr and Mrs Emmott.
The judge stated that in this case “there is such a degree of animosity and distrust between the executors that due administration of the estate is unlikely to be achieved expeditiously in the interest of the beneficiaries unless some change is made.”
That change was to remove all of the executors, replacing them with a professional executor.
Kershaw v Micklethwaite [2010] EWHC 506 (Ch)
The judgment in this case was handed down a day after Angus v Emmott and reinforced the view that, to use the words of Newey J in the judgment:
“friction or hostility between an executor and a beneficiary is [not], of itself, a reason for removing the executor.”
This case involved complaints against the executors from the beneficiary that they had delayed in the administration of the estate, that there were potential conflicts of interest, that they had failed to value assets correctly, had failed to identify the boundaries of the land and that there had been a breakdown of relations between the parties. The court considered each argument in turn and dismissed every one finding that they either had no substance or they were not serious enough to warrant removal. Bad relations between the parties was simply not enough.
The court also took into account the fact that the personal representatives were appointed by the testator and so it was considered that she would have given serious thought to their appointment. Consequently, something very serious would have to happen to warrant their removal.
The judge also commented on the practical issue of costs, pointing out that changing the personal representatives would increase the administration costs significantly.
Alkin v Raymond and Whelan [2010] WTLR 1117
In this case the court ordered the removal of the executors because an invoice for £163,000. It was said to be a debt of the estate, payable to a company controlled by one the executors which did not hold up and was considered inconsistent with previous invoices. The court held that the invoice related to the overheads of the executor’s company and had not been approved by the deceased before his death.
This was held as serious enough to justify removal of, not only the executor in question, but also his co-executor who had supported the payment of the invoice.
Where there is clear evidence of misconduct, an application for removal should succeed, but again, friction and hostility alone are not enough.
As George Bombas QC said in the judgment:
“If the friction or hostility is generated by the behaviour of the beneficiary, the court will need more than the fact of friction or hostility. It will need to be satisfied that the friction or hostility was impeding the proper execution of the trusts and the welfare of the beneficiaries.”
Goodman v Goodman [2013] All ER 118
This case involved an appeal against a decision to remove an executor under section 50 Administration of Justice Act 1985. The rationale for the appeal was that the incorrect procedure had been used by the claimants. As this was an application to remove an executor before the grant had been obtained, it was argued that the procedure under section 116 Senior Courts Act 1981 should have been used.
The court upheld the first instance decision and found that an application to remove an executor under section 50 Administration of Justice can be made before a grant has been obtained.
Re Estate of Folkes [2017] EWHC 2559
In Folkes, the court ordered the removal of executors in circumstances where the executors had, during the deceased’s lifetime, helped the deceased make a number of transfers of assets at a time when he was suffering with dementia. As those transactions properly required investigation, with such investigation needing to be undertaken by the executors, it was considered inappropriate for the present executors to remain in that role as that would amount to a conflict of interest. They were therefore removed as executors and replaced by an independent solicitor.
Conclusion
These cases provide some helpful guidance. However, each case is different and heavily dependent on its own facts. What is apparent is that there must be clear and compelling reasons that would adversely affect the administration of the estate and the welfare of the beneficiaries. Bad relations alone will not usually be enough.
Clear evidence of misconduct, particularly in relation to financial matters, will strongly influence the decision of the court. Personal representatives owe an overriding duty to the estate. Where dishonesty or lack of good faith can be shown, then the court is likely to make an order that the personal representative is removed.
If you are considering making an application to remove an executor or personal representative or are facing such an application it is vital that you obtain expert legal advice as early as possible.
