England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
PROPERTY TRUSTS AND PROBATE LIST (ChD)

		The Rolls Building 7 Rolls Buildings Fetter Lane London EC4A 1NL
		09/03/2018

MASTER TEVERSON:

1. These proceedings relate to the estate of Yvonne Maria Haynes who died on 21^st December 2015. Mrs Haynes was survived by two adult children, her son Mr Charles Haynes and her daughter Miss Kathleen Haynes.
2. The application before me is an application by the claimant, Mr Charles Haynes, under section 50 of the Administration of Justice Act 1985 for the removal of the First Defendant, Mr Raymond Andre as executor of Mrs Haynes's estate and his appointment as a substituted personal representative.
3. By clause 3 of her will dated 30^th August 2007 Mrs Haynes appointed Raymond Andre to be the Executor and Trustee of her will. She appointed Kathleen Haynes to be a replacement executor and trustee in case Raymond Andre "should die in her lifetime or should refuse or be unable to act in the office of Executor and Trustee".
4. By clause 4 Mrs Haynes made specific bequests to Charles Haynes and his two children Vanessa Haynes and Tom Haynes. Subject to that, by clause 5 she gave her personal chattels to Kathleen Haynes to distribute them in accordance with her known wishes. By clauses 6 and 7 she gave her grandchildren Tom and Vanessa legacies of £1,000 each. By clause 10 she left the residue of her estate to be divided equally between Charles Haynes and Kathleen Haynes. She provided that in calculating the sum due to each of them, the sum of £70,000 should be brought into account which she had loaned Charles Haynes and deducted from his share of her residuary estate.
5. Probate of Mrs Haynes's estate was granted to Mr Raymond Andre with power reserved to another Executor on 19^th September 2016. I entertain some doubt whether it was in accordance with the intention of the will for power to be reserved to another executor once the instituted executor Mr Andre had accepted the office but for the purpose of this application I do not need to determine the point.
6. The gross value of the estate was certified as amounting to £2,137,163 and the net value to £2,122,291. The main asset of the estate was and is Mrs Haynes's property known as Flat 153 Ashley Gardens, Thirleby Road, London SW1P 1HW. It was valued for probate at £2.1 million.
7. The application was heard before me on 9^th January 2018. At the conclusion of the hearing I reserved my judgment. On 26^th January 2018 the court was notified that very suddenly and unexpectedly the Claimant had passed away on 24^th January 2018. In those circumstances I postponed the handing down of my judgment. The court wishes at the outset to send its condolences to the Claimant's family.
8. The effect of the Claimant's death is that his estate will become entitled to his share of Mrs Haynes's residuary estate. I am told that the Claimant died intestate. To date no person has been appointed to represent the Claimant's estate. I have considered in these circumstances whether I should proceed to hand down my judgment. I have concluded that I should. There is a pressing need for the administration of Mrs Haynes's estate to be completed and for the property to be sold.
9. The proceedings were begun by a Part 8 Claim Form issued on 4^th August 2017. Mr Raymond Andre was named as the only Defendant. The relief sought under section 50 of the Administration of Justice Act 1985 was the removal of Mr Andre as the executor of the will and the appointment of the Claimant.
10. Section 50 of the Administration of Justice Act 1985 provides:-

"(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 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 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 (5) states that "beneficiary" in relation to the estate of a deceased person, means "a person who under the will of the deceased or under the law relating to intestacy is beneficially interested in the estate."

11. The application was made to the High Court by the Claimant as a beneficiary. In my view the death of the Claimant prior to the handing down of judgment does not preclude the court from considering whether or not to exercise its discretion under section 50(1). Before me both the Claimant and the Second Defendant, Miss Kathleen Haynes, were in agreement that Mr Andre, the First Defendant should be replaced. The dispute between them was as to who to appoint in his place. The First Defendant has not taken any active part in the proceedings or filed any evidence. The evidence of the active parties before me indicates that Mr Andre has been willing to retire from his office as executor but on certain conditions including a condition that no claims are made against him.
12. On an application for the removal of a personal representative, the overriding consideration is whether the estate is being properly administered. If the court concludes that it is not being properly administered, the court must, where there is only one personal representative, go on to consider who to appoint to act as a substituted personal representative. The Claimant's application was that he should be appointed. As I shall set out, the Claimant's primary position by the time of the final hearing before me had become that the court should appoint an independent executor. His secondary position was that if the court decided not to appoint an independent executor, he would be a suitable replacement. The Second Defendant's position was that she was the most suitable person to replace Mr Andre as executor but that if for any reason the court was not willing to appoint her then an independent solicitor rather than the Claimant should be appointed
13. The Claimant's application was supported by a witness statement dated 28^th July 2017. The first ground on which the Claimant sought the removal of Mr Andre was that he had been provided by Mr Andre with insufficient information regarding the administration of the estate. The Claimant acknowledged that he had received some documents relating to the estate from Mr Andre but not ones which enabled him to see at a glance what had come in and been paid out of the estate. He expressed concern that there may have been transactions which required an explanation. He referred to a payment of £15,000 from his mother's account immediately after her death into the account of his sister who subsequently paid £5,000 to the executor. He expressed concern that his mother's flat remained unsold and was lying vacant with no steps being taken either to rent it or to refurbish the property. The Claimant said that if work were carried out to the property its value could be increased from £2.1 million to £2.6 million. The Claimant said that he wanted to be in a position to refurbish the property rather than for it to be sold in its current position. The Claimant complained about the failure to provide him with a security key to access his mother's flat. The Claimant also said that Mr Andre had failed to deal with the IHT position and to agree a deferral of IHT instalments.
14. The Claimant said he had raised these concerns through his solicitors with Mr Andre's solicitors and that in response Mr Andre had stated that he was prepared to voluntarily remove himself as executor and to consent to a successor being appointed. The Claimant said that he was unable to accept the conditions that were attached to these proposals. He said these conditions would have prevented him from obtaining a full and detailed account of the estate. He also said that Mr Andre recommended the appointment of his sister as a sole executor which the Claimant said he was unable to accept or felt was justified.
15. The Claimant's application came before me for a directions hearing on 6^th October 2017. Mr Andre had not file an acknowledgement of service or any written evidence. He had been in email contact with the Claimant's solicitor informing him of his health issues. I directed that notice of the application be given to Kathleen Haynes in accordance with CPR 19r8A. I gave permission to the Claimant to file a supplemental statement. The Claimant filed a further statement dated 19^th October 2017 asking the court to approve his application to be appointed as sole executor. In that statement the Claimant provided further background information about himself. That information included reference to his having started trading in commodities markets through the internet until he retired and to him being made bankrupt as a result of a petition by HMRC which had been annulled in 2013.
16. An acknowledgement of service was filed on behalf of Kathleen Haynes by Anthony Gold Solicitors dated 16^th November 2017. As a result she became the Second Defendant. In Section B it was stated that Kathleen Haynes did not object to the removal of Raymond Andre as Executor. It stated she would like to be appointed in his place. It said she objected to the appointment of her brother, the Claimant, as Executor.
17. Kathleen Haynes filed a witness statement dated 16^th November 2017 in response to her brother's application to remove Raymond Andre as executor of her mother's estate and to appoint himself in Raymond's place. She says in her statement that she is retired and had spent many years caring for her parents – first her father then her mother. She said that in her view Raymond Andre should be removed as executor of the estate. She said he was not progressing the administration of the estate efficiently and effectively and she did not believe that he was doing a good job. She said she did not believe her brother should be appointed in his place. She said she would like to be appointed in his place. She said she was the other executor named in the will and that power had already been reserved to her. She said she had been carrying out the role of executor for some time and that she had all the information and knowledge about her late mother's estate that an executor would need.
18. The Second Defendant refers to her role in looking after her mother. She says that she knows more about her estate and her arrangements than anyone else. She says she misses her mother very deeply. She says her mother was a spiritualist and so is she. She says they knew Raymond as a result and that is why her mother chose him as her executor. She says the relationship between her mother and Mr Andre to which her brother referred in paragraph 5 of his first witness statement, was never anything but a platonic relationship.
19. The Second Defendant then sets out a summary of her knowledge of the administration of the estate. It is apparent from that summary that the Second Defendant has been involved with aspects of the administration including the property. She says she appointed Mylako Chartered Surveyors to undertake a retrospective valuation of the property. She says she arranged for them to visit the property on 4^th May 2016 when they valued the property at £2.1 million. She says around the same time she arranged for a number of estate agents to give valuations of the property.
20. The Second Defendant says the First Defendant made an application for probate on 4^th July 2016 and that he wrote to her on 2^nd August 2016 to notify her that he was making the application as she was an executor to whom power was being reserved. She says that on 16^th September 2016 the First Defendant updated the Claimant and her by email about the administration and provided a copy of a letter from his solicitor and her advice about the Inheritance Tax payments which had been made. She says she sent copies of these documents to her brother in word format on 21^st September 2016.
21. She says she made a payment of £5,000 to Raymond on 16^th January 2016 and she understands that her brother made a payment of £5,000 to the First Defendant on 17^th August 2016 which was used to make the first IHT payment of £4,863.64 in respect of the tax not payable by instalments.
22. She says the First Defendant obtained a grant of probate on 19^th September 2016 which grant reserved power to her. She says her brother chased the First Defendant on 15^th November 2016 for information and he responded on 17^th November 2016. She says the District Valuer attended on 23 November 2016 to value the property and accepted the valuation of £2.1 million.
23. The Second Defendant says that throughout the administration, she has continued to handle the payments of the service charges and all other property bills and all other outstanding household bills. She says that on her mother's death, Barclays closed her accounts and transferred money to a joint account which she held with her. She says she used that money to pay the bills of the estate but that the account has almost now run out of money. She says that the payment of £15,000 referred to by her brother at paragraph 8 of his first witness statement has been spent on service charge and other expenses of the estate. She says the service charge on the property is substantial, £2,327.56 per quarter.
24. The Second Defendant says she has spent a lot of time at the property since her mother's death. Her mother had two birds which are still in the flat. She has had to deal with the chattels. There have also been water leaks from the flat above. The Second Defendant says it is in everyone's interest that the property is sold as soon as possible. She says that neither she nor her brother can afford to keep the property, and it therefore needs to be sold.
25. She says that the First Defendant does not seem to be prepared to take any further steps in the administration of the estate. She says that earlier in 2017 her solicitor wrote to him suggesting that he step down. She says he agreed to do so on conditions. She says her solicitor asked for further information about the estate and what had happened so far. She says that after much chasing her solicitor received some papers from Quality Solicitors Copley Clark, but that these did not provide a full account of what had happened in the estate, and no indication was provided as to what the next steps would be.
26. The Second Defendant refers to a letter from P.C.D. York to Raymond dated 10^th February 2017 referring to both her and her brother as their clients. She takes issue with that. She says she had already engaged her own solicitors at that time. Her solicitors Anthony Gold wrote to P.C.D. York on 23^rd March 2017 pointing this out. A copy of that letter is exhibited to the Claimant's first statement. In it Anthony Gold say they are also concerned about the way the administration is being handled. The Claimant said in reply that his sister sent a letter to P.C.D. York causing them to assume she was also a client.
27. The Second Defendant says that she decided after taking advice that she would accept the First Defendant's conditions. She says that her solicitors wrote to the First Defendant on 20^th October 2017 to confirm this, so that progress could be made. She says it was only after that that she received notice that proceedings had been issued, and she did not receive service of any documents until 3^rd November 2017. She says that her brother's suggestion at paragraph 12 of his second statement that the estate would not have been administered without his application is incorrect. She says she would have taken over the administration from the First Defendant without the costs of an application to the Court.
28. The Second Defendant sets out the reasons why she believes her brother should not be appointed. Her reasons were:-

(1) that he had not been closely involved in her mother's care, or involved in dealing with the estate since she died;

(2) that he suggested he wanted to carry out refurbishment of the property before it is sold. The Second Defendant says she is very worried by this proposal. Any refurbishment would have to be paid for and her brother has not provided any evidence that he has the money available to fund the refurbishment. The refurbishment would take a period of time during which the Inheritance tax instalments, service charge, ground rent, Council Tax and other utilities would continue to be payable;

(3) that she was also worried about her brother's financial position. She refers to the £70,000 he owed to the estate and to the fact that her brother had previously been made bankrupt.

(4) that she was very concerned about the proposals regarding payment of IHT apparently being made by her brother through his solicitors involving a charge being secured over the property with the possibility of the property being kept for many years with interest accruing whilst refurbishment work is carried out.

29. Although no longer of direct relevance to the outcome of the application, I should record that I find all these reasons, apart possibly from the lack of involvement with his mother's medical care, good and compelling reasons why it would not have been appropriate to appoint the Claimant as a substituted personal representative.
30. The Second Defendant then sets out the reasons in support of her position that she should be appointed as follows:-

(1) that this would be in accordance with what her mother wanted. She says her mother specifically named her as the second executor, to act if Raymond couldn't, and she would like to honour that wish;

(2) that the Grant of Probate also reserves power to her;

(3) she is well aware of the assets and liabilities of the estate, and has been "essentially undertaking the role of an executor for some time". She says she would be able to deal with the administration of the estate quickly and efficiently.

(4) she understands the role of an executor and intends to honour it. She does not intend to carry out refurbishment work on the property, but simply to place it on the open market to get the best price possible.

(5) she is trustworthy and has had no financial problems in her life. She is keen to carry out the role, and intends to retain her current solicitors to advise on the process.

31. The Second Defendant ends her witness statement by saying that if the court was unwilling to agree that she be appointed as the executor of the estate, then she would suggest that an independent administrator be appointed. She put forward the names of two solicitors, Manal Fouad of Hodders Solicitors and Emma Myers of Child & Child Solicitors. She said she was in the process of obtaining their consents to act.
32. The matter came back before me on 21^st November 2017. The Claimant sought and was granted an adjournment in order to respond to his sister's evidence and her proposal that she be appointed as the executor in place of Mr Andre.
33. In the skeleton argument filed on behalf of the Claimant for that hearing the position being adopted on behalf of the Claimant was that Mr Andre should be removed in favour of an independent third party. In the alternative the Claimant continued to request that he be appointed in place of Mr Andre.
34. A witness statement running to 75 paragraphs was made by the Claimant on 9^th December 2017. Its main purpose is to oppose the appointment of his sister in place of Mr Andre. The Claimant criticises his sister for not having taken any steps herself to remove the current executor despite her knowledge that he has not handled the administration of the estate very well. He says his sister is incapable of taking practical steps to progress the administration of the estate. He says that after a letter from her solicitors dated 26^th May 2017, the next contact with her and her solicitors was 6^th November 2017.
35. He says the most likely reason why his mother had chosen an independent executor was because she was aware that there was never a good relationship between his sister and himself or with his children. He says in paragraph 33 that he and his sister have not held meaningful conversations for as long as he can remember. He says that she has not spoken to his children for several years on end. He says there is the real prospect of her resorting to "bully girl" tactics of drip feeding him with information and attempting to keep him out of the loop about pertinent information.
36. The Claimant says prior to the hearing on 21^st November 2017 he had agreed to one of the two solicitors firms suggested by his sister being appointed. He says in paragraph 29 he was agreeable to their appointment, subject to information on the likely cost and time scales when they believed they would be able to finalise the estate.
37. The Claimant says that his sister has health problems and is in and out of hospital frequently. He says she is extremely passive when dealing with requests for information and does not answer telephone calls. He says he has no doubt that the estate would come to a standstill unless an independent executor is appointed.
38. At the hearing before me on 9^th January 2018 the Claimant's primary position was that the court should appoint an independent executor rather than the Second Defendant. He opposed the appointment of the Second Defendant on a number of grounds. The arguments advanced were:-

(1) The Second Defendant's conduct in relation to the estate demonstrated a tendency towards passivity, procrastination and inefficiency. It was said she had failed to take any steps to remove the First Defendant despite her solicitors having expressed concerns about the First Defendant's handling of the estate in their letter dated 23^rd March 2017.

(2) The Second Defendant's health issues, which might have a negative effect on her availability;

(3) The long-standing breakdown of the relationship between the Claimant and the Second Defendant and their sharply differing views about the way the estate should be administered;

(4) The reasons advanced by the Second Defendant for appointing her sole executor did not hold water. Her involvement in her mother's medical care had no bearing on the Second Defendant's suitability as executor of the estate. The table of receipts and payments which the Second Defendant says she has gleaned from information provided to her by the First Defendant suggests that her knowledge is in fact fairly limited.

(5) In response to any reliance placed by the Second Defendant on her mother's choice of executors, it was submitted that Mrs Haynes had not chosen the Second Defendant in the current circumstances. It was further submitted that the fact that the First Defendant was Mrs Haynes's first choice of executor may suggest a general preference for an independent executor.

39. At the hearing on 9^th January 2018 I was provided with a supplementary bundle showing that the Claimant through his solicitors had approached Mr Peter Hoare of Alder Wills & Probate Ltd to act as substituted personal representative. Alder Wills & Probate Ltd are regulated by the Society of Will Writers and Estate planning practitioners.
40. On behalf of the Second Defendant, it was submitted that the clear wish of the Second Defendant's late mother should be followed, by the appointment of the Second Defendant to enable the administration of the estate to be concluded. It was submitted that it was obvious that any sale of the property would be handled by a professional estate agent. It was said that the court could if it wished direct a sale within 6 to 8 weeks.
41. I am satisfied that Mr Andre should be replaced as executor and trustee of the estate. The Second Defendant and the Claimant were in agreement that Mr Andre should be replaced. Mr Andre has not sought to oppose his removal. The evidence filed on behalf of the Claimant and the Second Defendant refers to Mr Andre being willing to be retire from office but on condition that it was confirmed in open correspondence that no claims would be brought against him.
42. It appears as if since around February 2017 Mr Andre has ceased carrying out the administration of the estate. This may have been in response to the letter from P.C.D. York dated 10^th February 2017 purporting to notify him on behalf of both Charles Haynes and Kathleen Haynes of their intention to initiate legal proceedings to remove him from his role as executor. He has so far as I can tell taken no steps to market the property.
43. The de facto relinquishment by an executor of his role for several months in anticipation of his removal either by consent or by order of the court is in my view a sufficient ground for his replacement. To that is to be added the fact that well over a year has passed since the grant of probate.
44. The main issue for decision is whether to allow the Second Defendant to take over the administration of the estate by appointing her as a substituted personal representative in place of the First Defendant or whether to appoint an independent professional person.
45. In the particular circumstances of a case, the court may come to the conclusion that the safest and most appropriate course to ensure the proper administration of an estate in the interests of all the beneficiaries is to appoint a suitably qualified professional person with no prior involvement with the parties or the estate. However, before making that decision, the court must take into account that introducing a new professional personal representative will inevitably increase the cost of administration significantly.
46. The decision in each case will turn on particular facts and circumstances. In some cases it will be clear that the appointment of an independent suitably qualified professional is the right and only course to take because without it the administration of the estate or the execution of the will trusts will continue to be delayed or obstructed.
47. I have come to the conclusion on the particular facts and circumstances in this cases that I should exercise my discretion in favour of appointing the Second Defendant as substituted personal representative instead of appointing a solicitor with no prior knowledge of the estate to step in.
48. The Second Defendant is being assisted and advised by an experienced solicitor and all the evidence before me suggests that the Second Defendant has been acting on the advice she has received regarding the estate and the position of Mr Andre. The Second Defendant is herself an equal residuary beneficiary and has every incentive to complete the administration.
49. It would obviously not have been appropriate for the Claimant and the Second Defendant to have been appointed as joint executors by the Court in view of the fact that they did not get on. It was no doubt for this reason that they were not appointed as joint executors by Mrs Haynes. In those circumstances, Mrs Haynes's first choice was to appoint a friend as her executor. It is in my view of relevance that Mrs Haynes herself contemplated the possibility that if Mr Andre died in her lifetime or was unwilling or unable to act in the office of executor, that the Second Defendant would do so. This may not have been Mrs Haynes's first choice but it was her second choice rather than appointing a professional person. Her will contains no professional charging clause.
50. The fact that the Claimant and the Second Defendant were not close is not in my view a reason to conclude that the estate will not be properly administered and distributed if the Second Defendant is appointed to replace the First Defendant. Friction and hostility between an executor and a beneficiary is not of itself a good reason for removing an executor. It is a factor to be taken into account if it is obstructing the administration of the estate. Here the issue arises in the context of whether to appoint the Second Defendant to replace the First Defendant. There may be cases where the potential for future strife persuades the court not to appoint a person as a substituted personal representative but for that to be warranted the court must be persuaded that the breakdown in relations has the potential to cause difficulty in the administration of the estate.
51. I am not persuaded that this is such a case. The Second Defendant as a residuary beneficiary has a direct and obvious interest in ensuring that the estate is administered and distributed efficiently and promptly. There is no evidence that she has been impeding the administration of the estate.
52. I do not think the criticisms made by the Claimant against the Second Defendant of her alleged inactivity or passivity are justified looking at the evidence and correspondence before me. This shows that by early 2017 independently of the Claimant, the Second Defendant had sought advice from her own solicitors, Anthony Gold, regarding Mr Andre's administration of the estate. Anthony Gold's letter to Mr Andre of 7^th April 2017 refers to them having been writing to Quality Solicitors Copley Clark, the solicitors understood to be acting for Mr Andre, "for the last 2 months" trying to ascertain what was happening with the administration, and to get a list of the assets and liabilities of the estate.
53. In their letter to the Claimant's solicitor Mr Lone dated 26^th May 2017 Anthony Gold explained why they were not prepared to advise the Second Defendant to accept Mr Andre's conditions for agreeing to retire. They explained why they did not think it necessary for the Claimant also to be appointed as an executor. They said there was no obligation to have two executors and that their client would be able to carry out that role with advice from their firm. They also said they were concerned about the suggestions made by the Claimant that the property should be completely refurbished before being sold. They said they did not think a meeting was necessary but would be happy to discuss that by phone.
54. The Claimant complains in his 3^rd witness statement that after the letter of 26^th May 2017 the next contact with his sister and her solicitors was the 6^th November 2017. He says that in that time his sister did nothing at all to remove Mr Andre. It appears from an email sent by the Claimant's solicitor Mr Lone to Mr Andre's solicitors on 19^th June 2017 that Mr Andre was proposing that he should be replaced by Kathleen Haynes. Mr Lone said that the Claimant would not agree to this and there was no good reason for Mr Andre to favour one beneficiary over another. In those circumstances, it seems to me the Claimant cannot fairly criticise the Second Defendant for not bringing proceedings herself to remove Mr Andre.
55. The Claimant also referred to his sister having health issues and to her being extremely passive when dealing with requests for information. It is not suggested that the Second Defendant is incapable of acting. The Second Defendant would carry out her role with advice and assistance from her solicitors. The sale of the property will be carried out by property agents. There is no reason to accept the Claimant's assertion that the administration of the estate would come to a standstill in circumstances in which it is self-evidently in the interests of the Second Defendant for the administration of the estate to be concluded as swiftly as possible and for the property to be marketed and sold.
56. Nor am I persuaded that the Claimant's evidence demonstrates that there are transactions which need to be explained by the Second Defendant. The Second Defendant in her witness statement explains that the £15,000 paid to her was spent on the service charge and other expenses of the estate. This issue was not pursued by the Claimant in his third witness statement or before me.
57. Looking at the matter overall, there are in my view clear advantages to the estate in appointing the Second Defendant as substituted personal representative instead of appointing a solicitor with no prior knowledge of the matter. The estate has little or no money on account to fund remuneration. The Second Defendant has the benefit of being advised by experienced solicitors. They must already have considerable knowledge relating to the administration of the estate.
58. The main task ahead lies in the marketing and sale of the property. In my view any legitimate concerns the Claimant's family may have concerning the appointment of the Second Defendant as substituted personal representative can best be met by the court directing that the conduct of the sale of the property is to take place under the direction of the court.
59. For those reasons, I propose to order that the Second Defendant be appointed act as personal representative of her mother's estate in place of the First Defendant and to direct that the sale of the property take place under the direction of the Court.
60. I have directed this judgment be handed down without the need for attendance. A hearing has been listed before me at 11am on 16^th March 2018 to deal with consequential matters.