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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Goodman v Goodman [2013] EWHC 758 (Ch) (18 January 2013)
URL: http://www.bailii.org/ew/cases/EWHC/Ch/2013/758.html
Cite as: [2013] WLR(D) 197, [2014] CH 186, [2013] WTLR 1181, [2013] 3 All ER 490, [2014] 1 Ch 186, [2013] EWHC 758 (Ch), [2013] 3 WLR 1551, [2014] 1 CH 186
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CHANCERY DIVISION
IN THE ESTATE OF EVERARD NICHOLAS GOODMAN DECEASED
7 Rolls Buildings Fetter Lane London EC4A 1NL |
||
B e f o r e :
____________________
| (1) MICHAEL PAUL GOODMAN | ||
| (2) DAVID JEREMY GOODMAN | ||
| (Executors of the late Everard Nicholas Goodman) | Appellants/Claimants | |
| - and - | ||
| (1) MINA GOODMAN | ||
| (2) SUZANNE JUDITH GOODMAN | ||
| (Executrixes of the late Everard Nicholas Goodman) | Respondents/Defendants |
____________________
8th Floor, 165 Fleet Street, London, EC4A 2DY
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(Official Shorthand Writers to the Court)
MR T MOWSCHENSON QC appeared on behalf of the First Defendant
MR R DEW appeared on behalf of the Second Defendant
____________________
Crown Copyright ©
- MR JUSTICE NEWEY: The question raised by this appeal is whether section 50 of the Administration of Justice Act 1985, which contains a power to replace or remove personal representatives, applies in relation to a person named as an executor in a will but who has not been granted probate.
- The case concerns the estate of Mr Everard Goodman, who died on 17 April 2011. Mr Goodman left a will dated 15 December 2010 in which he named the parties to the present proceedings as his executors. The claimants are Mr Goodman's sons, and the second defendant is his daughter. The first defendant is Mr Goodman's widow.
- Regrettably, relations between Mr Goodman's sons, on the one hand, and his widow and daughter, on the other, are very poor. Disagreements between them led to the issue of the proceedings that are before me on 6 March 2012. On 16 August 2012, the first defendant, who is a beneficiary under Mr Goodman's will as well as one of the executors named in it, issued an application in those proceedings for an independent professional to take over the administration of Mr Goodman's estate. The witness statement in support of the application explained that the application was made under section 50 of the Administration of Justice Act 1985.
- One of the objections that the claimants raised in response to the first defendant's application was that section 50 of the 1985 Act is inapplicable in the case of a person who was named as an executor but who has not been granted probate. According to the claimants, an application in respect of such a person must be made pursuant to section 116 of the Senior Courts Act 1981 rather than section 50.
- Master Bragge heard oral submissions on the point raised by the claimants at a hearing on 20 August 2012, and further written submissions were lodged subsequently. Judgment was formally handed down on 9 January 2013. Rejecting the submissions advanced on behalf of the claimants, Master Bragge concluded that section 50 can be invoked without probate having been granted. The claimants appeal from that decision.
- Section 50 of the 1985 Act confers on the Court a power to replace personal representatives or simply to terminate their appointments. Section 50(1) provides as follows:
- As is apparent from section 50(1), an application under the section can be made by a "personal representative" or a "beneficiary of the estate". Subsection (4) explains that a "beneficiary" for this purpose is "a person who under the will of the deceased or under the law relating to intestacy is beneficially interested in the estate". By virtue of section 56, "will" includes "any testamentary document of which probate may be granted".
- The origins of section 50 are not entirely clear. I was referred to two reports that had been published earlier in the 1980s, but neither of them obviously accounts for the introduction of section 50. The first of the reports dates from 1980 and is of a "Review Body on the Chancery Division of the High Court". This explained, in paragraph 114, that witnesses had spoken of the need for a "simple summary procedure enabling a master, on being satisfied by affidavit that personal representatives have been dilatory in winding-up an estate or providing accounts, to make an order for appropriate steps to be taken by the personal representatives by a specified date or dates without the necessity of a full administration or the taking of accounts". The Review Body recommended that "the rules should be amended to authorise application by motion in urgent cases". Nothing was said about any need for new primary legislation.
- The second report, of the Law Reform Committee, was published in 1982 and dealt with the powers and duties of trustees. Part VII of the report noted that "the dilatory personal representative" was a serious problem, but no change in the law was suggested. The Law Reform Committee said this in paragraph 7.14:
- These views notwithstanding, by 1985 it was evidently thought desirable to introduce an alternative to the Judicial Trustees Act 1896. Lewison J noted in Thomas and Agnes Carvel Foundation v Carvel [2007] EWHC 1314 (Ch), [2008] Ch 395 that "the practice and procedure under the 1896 Act was … considered to be cumbersome and over-formal" (see paragraph 18).
- The Judicial Trustees Act 1896 remains in force. Until the Act was passed, the Court had no power to remove someone who had been granted probate (see In re Ratcliff [1898] 2 Ch 352, at 356). The position changed with the passing of the Act, section 1(1) of which is in these terms:
- The provision which the claimants maintain that the defendants ought to have invoked in the present case is section 116 of the Senior Courts Act 1981. This provision, which is headed "Power of court to pass over claims to grant", states as follows:
- As Current Law Statutes Annotated noted, section 116 "reduces some rather detailed drafting in s. 162 [of the Supreme Court of Judicature (Consolidation) Act 1925] concerning settled land and insolvency (as well as special circumstances) to a widely drafted power to pass over prior claims to grant 'by reason of any special circumstances'". Section 162 of the 1925 Act itself replaced section 73 of the Court of Probate Act 1857.
- As I have already indicated, it is the claimants' case that section 50 of the 1985 Act has no application to a person named as executor who has not obtained probate. The first defendant, on the other hand, maintains that section 50 extends to such a person. The second defendant also argues for that view.
- It seems to me that, read naturally, section 50 of the 1985 Act would apply to a named executor who had not proved. My reasons include these:
- It is noteworthy that the construction of section 50 advocated by the defendants is consistent both with Practice Direction 57 and with views expressed in Tristram and Coote's Probate Practice, 30th edition. Paragraph 41.02 of Tristram and Coote includes this:
- The claimants, however, rely on two cases in which there was reference to section 50 of the 1985 Act. I can dispose shortly of the later of the cases, Thomas and Agnes Carvel Foundation v Carvel. In that case, the claimant seeking relief under section 50 was not a beneficiary under the relevant will but claimed under the doctrine of mutual wills. Lewison J concluded that the claimant was entitled to apply under the Judicial Trustees Act but could not do so under section 50. He said this in paragraph 21 of his judgment:
- The other case on which the claimants rely, Perotti v Watson, gives rise to much more difficult questions. There, the deceased had named a Mr Impanni as his executor, but a Mr Watson had been appointed as attorney-administrator of the estate. Mr Perotti, who was a nephew of the deceased, brought proceedings against, among others, Mr Watson and Mr Impanni, in particular for Mr Watson's removal as administrator under section 50 of the 1985 Act. Following a lengthy trial, Rimer J declined to order the removal of either Mr Watson or Mr Impanni. As regards the latter, Rimer J said this at the end of his 125-page judgment:
- On appeal, Mr Perotti, who appeared in person, once again placed Mr Watson's removal at the forefront of his case. The Court of Appeal also, however, had to address the position of Mr Impanni (who was not himself either present or represented).
- Sir Martin Nourse, with whom the other members of the Court agreed, considered whether Mr Watson should be removed as an administrator in paragraphs 22-26 of his 63-paragraph judgment (see [2001] EWCA Civ 116), concluding that he would affirm Rimer J's decision on the point. Sir Martin Nourse dealt with Mr Impanni in the next paragraph of his judgment. He said this:
- Mr Tager argued that the third sentence of this paragraph represents a binding decision that section 50 of the 1985 Act is inapplicable in the case of an executor who has not proved. This, he said, was Rimer J's view when he had to deal with the Perotti case at a further hearing in 2003. In the course of the judgment he gave on that occasion ([2003] EWHC 590 (Ch)), Rimer J said this:
- Mr Terence Mowschenson QC, who appears for the first defendant, and Mr Richard Dew, who appears for the second defendant, both resisted the suggestion that I am obliged by Perotti to allow the appeal. They each argued that Sir Martin Nourse should not be taken to have decided that section 50 cannot be used to remove anyone named as an executor who has not been granted probate. They also submitted that the relevant remark by Sir Martin Nourse was obiter.
- Master Bragge observed that the Perotti case raised a difficult point. I agree. With a degree of hesitation, however, I have concluded that Perotti does not bind me to adopt Mr Tager's approach to section 50. Like the Master, I have in the end decided, on balance, that the view Sir Martin Nourse expressed in the third sentence of paragraph 27 of his judgment was obiter. "[A]mong the propositions of law enunciated by [a judge in the course of a judgment], only those which he appears to consider necessary for his decision are said to form part of the ratio decidendi and thus to amount to more than an obiter dictum" (Cross and Harris, "Precedent in English Law", 4th. edition, at page 40). Had Sir Martin Nourse considered the point as to the scope of section 50 necessary for his decision, he would, as it seems to me, have devoted more than a single sentence to it. The true basis for the decision is, I think, to be found in the subsequent sentences of the judgment. Rimer J's exercise of his discretion was "unimpeachable". It was on this basis that Sir Martin Nourse considered that Rimer J's decision should be affirmed as regards Mr Impanni as well as Mr Watson.
- In the circumstances, I am free to consider the ambit of section 50 afresh, and, for the reasons given earlier in this judgement, I consider that it extends to executors who have not proved.
- I would add, finally, that I find it hard to understand how the claimants thought that their objection to the use of section 50 of the 1985 Act could serve a useful purpose. It has served to generate expense and delay. Had it succeeded, it could have been expected to put the parties to further expense and produce further delay. In circumstances where there is no doubt that section 116 of the Senior Courts Act would confer jurisdiction to appoint an administrator in place of the parties, it is difficult to understand what worthwhile objective was being pursued. That the point was taken is, I suppose, symptomatic of the breakdown in relations between the parties.
- At all events, I agree with Master Bragge's conclusion and will therefore dismiss the appeal.
"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."
Subsection (2) deals with the status of someone appointed as a "substituted personal representative". It states:
"Where the court appoints a person to act as a substituted personal representative of a deceased person, then—
(a) if that person is appointed to act with an executor or executors the appointment shall (except for the purpose of including him in any chain of representation) constitute him executor of the deceased as from the date of the appointment; and
(b) in any other case the appointment shall constitute that person administrator of the deceased's estate as from the date of the appointment."
"Before considering changes in the law we think it would be helpful to set out in outline the remedies which are available at the moment to a beneficiary who is dissatisfied with the actions of the personal representative. The time honoured remedy of an administration action, in which the Court, in effect, takes over the whole administration of the estate is still available; it is, however, an extremely clumsy, costly and time consuming procedure and in practice it is only in wholly exceptional cases that its use can be recommended. In practical terms, in the kind of case we are considering, the beneficiary's main remedy is to apply to the court for the appointment of a judicial trustee under section 1(1) of the Judicial Trustees Act 1896. The object of this statute is to provide a middle course in cases where the administration of the estate by the ordinary trustees has broken down and it is not desired to put the estate to the expense of a full administration. We are not aware of any case where this remedy has been adopted and found unsatisfactory".
"Where application is made to the court by or on behalf of the person creating or intending to create a trust, or by or on behalf of a trustee or beneficiary, the court may, in its discretion, appoint a person (in this Act called a judicial trustee) to be a trustee of that trust, either jointly with any other person or as sole trustee, and, if sufficient cause is shown, in place of all or any existing trustees".
Subsection (2) extends the Act to personal representatives. It provides:
"The administration of the property of a deceased person, whether a testator or intestate, shall be a trust, and the executor or administrator a trustee, within the meaning of this Act".
"(1) If by reason of any special circumstances it appears to the High Court to be necessary or expedient to appoint as administrator some person other than the person who, but for this section, would in accordance with probate rules have been entitled to the grant, the court may in its discretion appoint as administrator such person as it thinks expedient.
(2) Any grant of administration under this section may be limited in any way the court thinks fit".
a. Section 50 confers a power to replace or remove a "personal representative". As the definition in section 55 of the Administration of Estates Act 1925 illustrates, the term "personal representative" encompasses both an executor and an administrator. An administrator derives title from his appointment as such by the Court; there can therefore be no question of his being replaced or removed in advance of the grant of letters of administration. In contrast, an executor derives title from the will, and the property of the deceased vests in him from the moment of the testator's death (see e.g. Williams, Mortimer and Sunnucks on Executors, Administrators and Probate, at paragraph 8-02). Robert Goff J referred to the relevant law in these terms in Redwood Music Ltd v B. Feldman & Co. Ltd. [1979] RPC 1 (at page 5):
"Of course, if it becomes necessary for the executors to prove title to the property, a grant of probate must be produced, because only by virtue of such a grant can the will (and therefore the executors' title) be proved in a court of law. Only by such means, to use the vivid words of Jervis, C.J. in Johnson v. Warwick (1856) 17 C.B. 516 at 522, has the court 'the legal optics through which to look at [the will]'. If a grant of probate is not obtained until after the date of commencement of the proceedings, this does not mean that the executors cannot prove their title as at that date; their title has derived from the will, not from the grant of probate, and provided that the death of the testator occurred before the date of commencement of the proceedings, it makes no difference that the proof of their title, i.e. the grant of probate, came into existence at a later date";
b. Section 50 does not expressly confine the executors who can be replaced or removed under the section to those who have been granted probate. Further, the definition of "will" is not limited to a document of which probate has already been granted (see section 56);
c. It is true that there will be a considerable overlap between section 116 of the Senior Courts Act and section 50 of the 1985 Act if the latter is construed as covering executors who have not proved. It cannot, however, be inferred that Parliament did not intend such an overlap. A comparable overlap exists between section 50 and the Judicial Trustees Act, and Parliament must have intended that;
d. On the defendants' interpretation of section 50, "special circumstances" would be required before a person who had not proved could be replaced or removed (see section 116 of the Senior Courts Act), but there would be no similar requirement in the case of a person who had been granted probate. I cannot see why Parliament should have wanted it to be easier to replace or remove a person who had obtained probate. Before the Judicial Trustees Act was passed, the reverse was the case. An executor who had not proved could sometimes be passed over, but someone to whom probate had been granted could not be removed;
e. Mr Romie Tager QC, who appeared for the claimants, argued that construing section 50 in the way for which the defendants contend would give rise to oddities. He suggested that the phrase "terminate the appointment", which is to be found in section 50(1)(b), is not appropriate in the context of an executor who has not proved. He submitted, too, that it would be curious if the Court could appoint someone to act alongside executors to whom probate had not been granted. He further contended that a person named as an executor would be entitled to obtain probate under rule 20 of the Non-Contentious Probate Rules 1987 even though a substituted personal representative had been appointed in his place under section 50. For my part, however, I do not find these points persuasive. To begin with the last point, I cannot see how a person replaced as a personal representative could claim probate under rule 20 of the Non-Contentious Probate Rules; he would no longer be a personal representative. Further, I cannot see how any insuperable problems would arise from the application of section 50 to non-proving executors; the Practice Direction supplementing Part 57 of the Civil Procedure Rules, to which I shall refer again in a moment, deals with the application of the section in that context. Moreover, I can see no absurdity in speaking of the appointment of a non-proving executor being "terminated": such a person will already have been "appointed" as an executor, by the will.
"There is nothing in the wording of s 50 to preclude an application for the removal (or substitution) of an executor before a grant has issued; but equally there is nothing in that wording to allow such an application in respect of an administrator (who, before a grant, ex hypothesi does not exist)".
Part III of Practice Direction 57, which governs applications for substitution or removal of a personal representative, caters for cases in which "the claim is to substitute or remove an executor and is made before a grant of probate has been issued" (see paragraphs 13.1(1)(b) and 14.3 of the Practice Direction).
"The first question is: who is entitled to apply under these sections? So far as section 50 is concerned, the answer so far as this case is concerned, is: a person who 'under the will of the deceased' is beneficially interested in the estate. The natural meaning of the quoted phrase is a person named in (or one of a class identified in) the will which has been admitted to probate. That, after all, will be the will in relation to which the impugned personal representative has been appointed. Moreover, the use of the definite article ('the' will) seems to me to presuppose that there is only one relevant will. The foundation is not, however, named in Agnes's 1995 will as a beneficiary. It claims its beneficial entitlement under the doctrine of mutual wills".
Mr Tager drew attention to the words "which has been admitted to probate". It seems to me, however, that Lewison J was doing no more than making the point that a person applying under section 50 as a "beneficiary" must be beneficially interested under "the operative will of the deceased whose personal representative is sought to be removed" (to quote from paragraph 22 of the judgment). Lewison J was not concerned with, and was saying nothing about, whether section 50 applies to an executor who has not proved.
"[Mr. Perotti] also asks me to remove Mr. Impanni as executor. I have some doubt as to whether I have any jurisdiction under s.50 [of the Administration of Justice Act 1985] to remove a non-proving executor. However, I find it unnecessary to decide that question because I anyway consider that there is no justification for removing Mr. Impanni. He is now in his 80s, he has not obtained probate, [Mr. Perotti] himself recognises that it is highly unlikely that he will ever seek to do so and, so long as Mr. Watson or someone else is in the saddle as attorney-administrator, Mr. Impanni is precluded from interfering in the administration. Even if I do have any jurisdiction to remove Mr. Impanni, I propose to exercise my discretion against exercising it".
"Mr Impanni was appointed as executor of the deceased's English will but he never proved it. The judge had some doubt as to whether he had jurisdiction under section 50 to remove a non-proving executor. In my view, if an executor named in a will has not proved it, there is nothing from which to remove him. The judge found it unnecessary to decide that question because he considered that there was in any event no justification for removing Mr Impanni. In that respect his exercise of discretion was again unimpeachable. I would affirm his decision on this point also".
"On the hearing of Mr. Perotti's appeal to the Court of Appeal, the court's expressed view was that if a named executor has not proved the will, there is nothing from which to remove him".