[2010]JRC067
royal court
(Samedi Division)
1st April 2010
Before : |
Sir Philip Bailhache, Kt., Commissioner, and Jurats Tibbo and Kerley. |
IN THE MATTER OF THE TUTELLES OF THE F CHILDREN
AND IN THE MATTER OF THE REPRESENTATION OF H. SHARPE, Q.C. SOLICITOR GENERAL AND THE REPRESENTATION OF A
H. Sharpe, Q.C., in person.
Advocate C. M. B. Thacker for B, Tutrice.
Advocate C. M. Fogarty for A.
judgment
the commissioner:
1. The Court is considering concurrently two applications arising out of the tutelles created on 30th June, 2000, for the children of C who died in April 2000. The first is an application by the Solicitor General seeking the removal from office of the tutrice, B in relation to the tutelle of D who was born in 1992. The remaining children are E, who was born in 1989 and A, who was born in 1991. Both have reached the age of majority. The Court announced its decision in relation to the Solicitor General's application on 18th March, and we are now setting out our reasons for that decision. The second application is made by A, who seeks the appointment of forensic accountants to examine the accounts of her tutelle and certain other relief. It is convenient to take first the Representation of the Solicitor General.
2. The tutelles of B's three children became necessary following the death of C who died suddenly in unhappy circumstances. C's Will of immovable property dated 30th November, 1999, was registered on 16th August, 2000. The relevant paragraphs of the Will provide as follows:-
"2. I DECLARE that my three children E, A and D shall be liable as to one third each for all interest and capital repayments relating to any mortgages or other charges due upon my Immovable Estate and for the avoidance of doubt I FURTHER DECLARE that my wife B shall not have any liability whatsoever to contribute towards the payment of interest or capital on any of the said mortgages or charges.
3. I DEVISE unto my wife the said B the usufruct or life enjoyment of that part of the main house of my property known as HF, Jersey (which, for the avoidance of doubt, only includes that part of the said main house currently occupied as our matrimonial home and excludes that part currently let to tenants) (hereinafter referred to as the "Matrimonial Home", together with the right to use:-
3.1 the gardens in the front of the Matrimonial Home; and
3.2 the grounds known as LC to the East of the Matrimonial Home; subject to the lawful right of the other users, and I HEREBY CHARGE my said wife during her enjoyment of the Matrimonial Home:-
3.3 to conform to all the clauses, conditions and restrictions to which I may be subject for and on account of the Matrimonial Home;
3.4 to pay all such charges as may be due thereon (including for the avoidance of doubts all parish rates, foncier and occupiers);
3.5 to keep all buildings forming part of the Matrimonial Home in a good state of repair (including for the avoidance of doubt all structural repairs or "grosses reparations");
3.6 to keep in good and substantial repair all wash or hand basins sinks baths sanitary fittings ballcocks stopcocks cisterns and radiators in the Matrimonial Home and the hot and cold water pipes between the points where they connect with the sanitary and radiator fittings in the Matrimonial Home and the main service pipes in and used for the Matrimonial Home and all soil or waste pipes in and used for the Matrimonial Home and the gas pipes and electric wires and cables between their respective meters and the heating and lighting and power points in the Matrimonial Home;
3.7 to keep in a reasonable state of decoration all the interior of the Matrimonial Home;
3.8 to keep the Matrimonial Home adequately insured against damage by fire and all other normal risks comprised with a comprehensive insurance policy with an insurance company of good repute and in case of damage or destruction to rebuild or reinstate the same as the case may be and
3.9 generally to conform to such other rules of law as are applicable to an usufructuary devisee.
4. I DEVISE unto my said children E and A and the said D jointly and for the survivor of them the usufruct or life enjoyment of the remainder of my Immovable Estate (the "Remainder") and I HEREBY CHARGE my said children during their enjoyment of the same to conform to all the obligations set out in clauses 3.3 to 3.9 hereof as if the references in those clauses to the Matrimonial Home were references to the Remainder.
5. UPON the death of my said wife I DEVISE unto my said children jointly and for the survivor of them the usufruct or life enjoyment of the Matrimonial Home and I HEREBY CHARGE my said children during their enjoyment of the same to conform to all the obligations set out in clauses 3.3 to 3.9 hereof.
6. SUBJECT to the aforesaid life enjoyments I GIVE AND DEVISE the "nue propriété" or eventual ownership of the whole of my Immoveable Estate unto D and D's heirs in perpetuity."
3. The Solicitor General relies upon three grounds for the removal from office of the tutrice:-
"i. The tutrice has failed to comply with the statutory requirements of the 1862 Loi and file proper and signed accounts on an annual basis;
ii. The tutrice does not accept that the child's rights are those defined in the relevant Will;
iii. The tutrice has not preserved and is not minded to preserve assets for the benefit of the child in accordance with her oath."
4. The first ground, namely the failure to provide proper accounts, is based on the following considerations:-
(i) In 2007, an elector had to commence a civil action in order to obtain accounts for the years 2005-2007;
(ii) At present, there are no accounts for 2008-2009;
(iii) A has had to commence a civil action in 2009 in order to obtain proper accounts;
(iv) In an email dated 10th March, 2010, and sent by the Advocate representing the tutrice, it is apparently conceded that an accountant needs to prepare proper accounts;
(v) It is impossible to tell from the material that does exist what money was allocated to each of the three children;
(vi) The accounts do not explain why, given that the three children were apparently entitled to at least 2/3 of the rental income, they may have only received 13% of the gross revenue.
5. Counsel for B submitted that she had in broad terms complied with the obligations in relation to the preparation of accounts. He pointed out that when four of the electors had been replaced following a representation to the Court by one of them in 2007, the retiring electors were on record as having accepted the accounts. Mr Thacker also submitted that the Court had received a copy of the spreadsheets which detailed the income and expenditure and which B considered to be adequate accounts. It is true that the Court file does contain such spreadsheets, but we do not think that the Court (as then constituted) expressed any view on their adequacy or otherwise in relation to the obligations of a tutrice under the Loi (1862) Sur Les Tuteurs. What happened was that the proceedings begun by one of the electors, Advocate Kelleher, were compromised, and a consent order was placed before the Court. The Act of the Court of 11th April, 2008, records only that the Court granted the prayer of the representation and reconstituted the tutelles for A and D by appointing new electors in place of the four who wished to resign.
6. The second ground put forward by the Solicitor General is based upon B's strong feeling that she was unfairly treated in C's will. That is not in itself a ground for her removal but she has, through the agency of her partner, G, made it clear that B does not intend to comply with C's testamentary provisions. On 4th March, 2010, G sent an email with attachments to the Bailiff. The page headed "The untold part" reads as follows:-
"Therefore since these stories told to B [relating to allegations of abuse by the father] were only recently revealed as fictitious, B feels strongly that in these circumstances, the new Will should be disregarded in favour of the original version."
In an earlier letter dated 30th May, 2009, G has informed A that:-
"I now have to inform you that no money from the tutelle account is necessarily due to any of you at all regardless of age. B has taken further and better advice since the birthday of J with regard to this matter. It has now been established that you three children could have a theoretical 2/9ths interest each in the outbuildings adjoining the property known as HF. However, that is where it ends. It does not include the ensuing business interest."
The Solicitor General submitted that these comments were only consistent with a view by B that the Will was no longer applicable, as stated by G on 4th March, 2010, and that she was entitled to all or the majority of the rental income arising under the tutelles.
7. We interpose here that, although B is the tutrice of D, it is clear that her partner, G, has been a dominant force in the administration of the tutelle. According to an affidavit sworn by B in these proceedings, G is the secretary of the tutelle, as well as being an elector, and is remunerated for these services at the rate of approximately £10,000 per annum. His functions include not just the paper work connected with the tutelle but also the management of the units of accommodation which bring in the rental income.
8. As to the third ground for the removal of the tutrice, the Solicitor General pointed out that the amounts of income of the three tutelles purportedly applied for the benefit of E, A and D between 2000 and 2008 represented only some 13% of the revenue received. The spreadsheets provided by B show that between August 2000 and August 2008 (no figures for August 2008 to August 2009 are available) the rented properties generated income of £561,832.43. Those funds were distributed in part as follows:-
B £193,110.39
G £55,790.00
"Children's expenses" £74,375.43
If one takes the figures from 1st September, 2002, to 27th August, 2008, G was in fact receiving a greater share of the income than the three children. The amount purportedly applied for the benefit of the children must also be regarded with caution. No systematic analysis has yet taken place, but even a cursory examination of the spreadsheets suggests that some entries require explanation; e.g. £2,103.25 on 29th October, 2002, for children's tax. Furthermore, many of the entries for repairs and renewals also require explanation. The expenditure of £4,400 on 6th November, 2002, is noted "lounge TV for children". On 12th November, 2002, is an entry noted "car repairs re children" in the sum of £593.18.
9. Our conclusion is that B has not complied with the accounting obligations of a tutrice under the Law. Article 3 of the 1862 Law provides that the tutrice shall, within three weeks of her appointment, prepare a statement of the immovable property belonging to the infants. That has not been done. It is a significant failure because such a statement would have clarified exactly what B considered to be the interests of her three children. The statement should have formed the basis of the accounts to be prepared on an annual basis thereafter. It should have been signed by the tutrice and each of the electors. None of that was done. Article 4 requires the tutrice to prepare annual accounts to be approved by the electors. No such accounts have been placed before us.
10. It is true that the duty to prepare accounts has not been wholly disregarded in that some record of income and expenditure has been kept in the form of spreadsheets. These spreadsheets are inadequate because, inter alia, they fail to specify in sufficient detail the nature of the expenditure and they do not distinguish between the interests of the three children. Both E and A have achieved their majority, but there is nothing to show what monies are rightfully theirs.
11. In relation to the second and third grounds advanced by the Solicitor General for the removal of B as tutrice, we decline at this stage to make any adverse finding. We feel considerable unease, and suspect that things may have gone badly wrong. However, Article 5 of the 1862 Law contains penal provisions, as well as conferring the power to order damages and interest to be paid, and we think that we should defer pronouncing any adverse finding until the accounting exercise to which we shall refer below has been completed.
12. Our conclusion in relation to the accounting failure lasting over ten years would have justified of itself our decision to remove B from the office of tutrice. There is, however, in our judgement, an even more compelling reason which emerged clearly during oral submissions. B asserts that she is entitled to dower over that part of C's Estate which was devised to D, subject to the life enjoyment of the three children. No such claim has actually been made, but B has managed, through G, the tutelles' affairs as if she were entitled to one-third of the gross rents received. Mr Thacker conceded that, in order to claim dower, an application must be made to the Court - a clameur de douaire. So much is quite clear from the authorities. Le Gros states, at page 44 of his Droit Coutumier de Jersey "Le douaire n'est dû que du jour de la clameur". In order to claim her right to dower, B would have to bring an action against the heir, that is D, to deliver up the one-third of C's Immovable Estate to the enjoyment of which she is entitled at customary law. She would, in effect, have to bring proceedings against herself in her capacity of tutrice. That is an impossible conflict of interest which the Court cannot possibly contemplate. Counsel for B reserved his position as to whether such an action might be brought. Nonetheless, for this reason too, we concluded that B could no longer remain in office.
13. The replacement of B gave rise to difficulties. As a matter of customary law, a tuteur is appointed by the electors of the tutelle. Following the death of a parent, the seven closest relatives, usually four from the paternal side and three from the maternal side, make an application to the Court to constitute a tutelle. In default of a sufficient number of relatives, neighbours and friends may be summoned to form part of a tutelle. Having taken their oath, the members of the tutelle are asked by the presiding judge whom they do appoint as tuteur. Ordinarily, therefore, one would look to the electors of D's tutelle to appoint a successor to B. The problem that immediately arises is that three members of the tutelle are G and members of G's immediate family. A fourth, K, appears to have played little part in the administration of the tutelle. The apparent maladministration of the tutelle would be likely to continue if matters were left to take their course. The Court cannot allow the conduct of the affairs of D, to be left to chance in that way. Furthermore, the period of D's remaining minority is short. D will attain the age of eighteen in December 2010. We therefore concluded, in the exercise of our inherent jurisdiction to avoid the frustration of justice, that we should discharge the tutelle and appoint the Viscount as administrator of the affairs of D until December 2010. The Viscount will clearly wish to have professional assistance in elucidating, in the absence of a statement of assets and proper accounts, exactly what is the property of D. That brings us to the second application before us, which all Counsel agreed was intertwined with the first.
14. Miss Fogarty, who appeared for A, referred us to a letter sent by G to her client in 2009, the day before A's 18th birthday. It was, according to Mr Thacker's instructions, sent without prior consultation with B, although she did see it later. The letter was, Mr Thacker conceded, not well expressed. In our judgement, it was a cruel, and above all misleading letter. It opened:-
"Happy Birthday ....".
We have already quoted a passage from it at paragraph 6 above. The letter continued:-
"When your mother passes away and assuming that the letting business here is still a profit making viability, then [our emphasis] you will all be entitled to a certain proportion of the Estate in different ways."
This was a gross misrepresentation. A's interest in C's Estate is an existing vested interest. The birthday letter continued with the following statements:-
"Though you may have a certain right of interest in a part of the property, it is so closely allied with the interest that your mother and your relatives have, that she will not suffer interference with the running of it. It could affect everybody's interest here and I cannot emphasise strongly enough that if you attempt to disrupt the well-organised state of affairs, then your mother will prevent you from so doing by any means at her disposal.
You may have seen and read the letter that was sent to J on J's birthday explaining the financial position here. The situation has now changed very considerably and J understands and agrees with it absolutely. There is little money in the account anyway. Provided that the status quo remains then you can look forward to an inheritance at some time, but if financial demands are attempted on the Tutelle account then the Tutelle will employ a firm of Lawyers and what ever remains will soon be gone."
This threatening passage suggested that A had no present entitlement to any monies from C's Estate. This was also a gross misrepresentation.
15. The Court was surprised to learn from Miss Fogarty that A had been placed in foster care, and subsequently moved to La Preference Children's Home until 2008. After a short period living with a boyfriend, A moved in July 2008 to live with a family friend, L, who is one of the electors of the tutelle. We were surprised at this information, because nothing in the spreadsheets presented to us had indicated that the tutelle was not supporting A financially. In fact, it appears that, apart from birthday and Christmas gifts of £100 and occasional small payments from the tutelle account, A has been supported for the last six years at public expense. Since August 2008, A has been receiving State benefits in order to survive. Counsel asked that an immediate payment of £10,000 be made to A from the tutelle account in order to enable A to cover A's living expenses and also to assist D. Miss Fogarty told us, and Counsel for B had also not disclosed this, that D had left home in 2009 and was also living with L. Again, D was being supported at public expense, notwithstanding D's considerable inheritance. Counsel suggested that E had been brainwashed into submission by B and G.
16. We heard evidence from L and from G. It is unnecessary for the purposes of this judgment to detail that evidence, but none of it detracted from what we had been told by Miss Fogarty on the instructions of her client. A now seeks to take A levels at Hautlieu, and subsequently to go to college for tertiary education. A needs funding from A's inheritance to achieve those ambitions.
17. We have no doubt that the books and accounts of the tutelle need to be closely and professionally examined. G suggested through Counsel for B that the local firm of JF should be instructed; G had negotiated a fee of £2,500 to convert the spreadsheets into proper accounts. It subsequently emerged that G had not waited for the Court to agree this proposal, but had delivered all the books to that firm of accountants. The proposal was strongly opposed by the Solicitor General and by Miss Fogarty. They contended that what was needed was a forensic examination by an accountant trained in those skills. We agree, and we accordingly authorise the Viscount (in that the conduct of the tutelles from the outset affects D as well) to appoint an appropriate professional of his choice, having consulted naturally with Counsel for A. The forensic accountant should examine the administration of the tutelles over the past ten years and ensure that proper accounts are prepared. He should not, at this stage and without further authority, engage in any tracing exercise. We express the hope that the Viscount will be able to procure funds to enable this investigation to take place; the question of who should pay for it ultimately will be left over for further argument, if not agreed. We offer the following guidance as to the principles to be followed in drawing up accounts for the tutelles with effect from 30th June, 2000, to the present time.
18. First, the interests of the three children, E, A and D are to be separated. They have different legal interests, and their tutelles are separate. The accountants should endeavour to ascertain for whose benefit a particular item of expenditure has been incurred. It is not legitimate to charge expenditure for the benefit of A or A to D's account, or vice versa. Only if the expenditure was genuinely in the interests of two or more of the minors, may it be allocated against more than one account.
19. Secondly, the law requires a tuteur to protect the financial interests of the child. An oath is taken to conserve and to augment the property of the child as well as or better than the tuteur would look after his own property. Nonetheless, the tuteur is entitled to apply part, or even all, of the income of a child for his or her benefit. Clearly, expenditure on food, clothing, entertainment and education falls within those parameters. It should be borne in mind that the obligation of maintaining the matrimonial home was laid, by clause 3 of the Will cited above, upon B.
20. Thirdly, it is open to the tuteur at customary law to charge, apart from any legitimate disbursements, a fee of up to 5% of the child's gross income, with the approval of the electors, as recompense for the duties involved in managing the Estate. That principle was confirmed in Tostevin-v-Piquet (1904) 11 CR 431 which was drawn to our attention by Counsel for A. In this case, B engaged the services of G to manage the Estate, presumably with the approval of the electors, and a fee of 5% of the gross income would be lawfully chargeable.
21. Fourthly, under the express terms of C's Will, the three children were obliged, during their life enjoyment of the remainder of the immovable property apart from the matrimonial home, to pay for all the expenses of keeping the buildings in a state of good and substantial repair and decoration. That obligation extends even to structural repairs to the roof and fabric of the buildings. If, however, expenditure has been undertaken which amounts to an expansion or extension of the Estate rather than repair or renovation, such expenditure is to be charged to the interest of the reversionary owner, namely D.
22. Finally, we turn to the question of dower. As we have stated above, the right of dower may only be claimed, in default of agreement with the heirs, by making an application to the Court. No such application has taken place, nor has any agreement with the heirs been made. B is not entitled, at this stage, to any part of the income from the remainder of the Estate. Her entitlement is restricted under the Will to the life enjoyment of the matrimonial home. Any monies taken by B from the tutelles under the rubric of dower payments should accordingly be repaid.
23. We understood from Mr Thacker that an application for dower was being contemplated. A widow has an inalienable right to dower. Dower has been described by Le Gros as the life enjoyment of one third of all the immovable property of which the husband died possessed. Mr Thacker submitted that B was entitled to the life enjoyment of one third of the remainder of C's Estate as well as to the life enjoyment of the matrimonial home devised to B under the Will. We express some doubts as to the correctness of that submission, because it seems to us that it is not open to B both to approve the Will by taking the life enjoyment of the matrimonial home and to disapprove it by asserting a right of dower over the remainder. We have, however, heard no argument on this point, and we leave it open for decision at a later stage if that becomes necessary.
24. On the assumption that a claim for dower will be made, we add the following observations in order to assist the parties to resolve their differences with the minimum further expense. If we are right that the one third dower entitlement must be calculated on the whole of the immovable estate, and if we are right furthermore that the matrimonial home does not equate to a one third value of the whole estate, it seems clear that the sensible solution is for the parties to enter a dower agreement. A dower agreement between the heirs and the widow would involve an annual payment by the heirs during B's lifetime, and is the usual means by which the widow's interest can be accommodated. In calculating the amount of that payment, the rental value of each part of the property would have to be assessed. It is to be borne in mind that a usufructuary owner is required at customary law to pay for the maintenance and upkeep of the dower share, but not for structural repairs. On the assumption that the dower share included the matrimonial home, the costs of repairs would have to be calculated on the usual usufructuary basis, and not on the basis set out in the Will.
25. Although the practicalities of implementing the testamentary wishes of C are not without difficulty, C's intentions seem to have been reasonably clear. C intended that C's immovable property should be inherited, ultimately, by D. To protect the interests of his widow and of A and E, C created various life interests, and made other provisions. In order to protect his widow, C devised to her a life interest in the matrimonial home, and C declared that the responsibility for paying off any loans secured on the property should fall upon his three children in equal shares. In order to protect A and E, C devised to them, with D, a life interest in the remainder of the immovable estate. C also devised to them, upon the death of B, a life interest in the matrimonial home. The extent to which those careful arrangements may be liable to variation at the instance of B exercising her right to dower, depends of course upon the value to be attributed to each part of the estate.
26. We turn now to the other relief sought by Counsel for A, and in particular, the request for an immediate payment of £10,000. We understand the rationale for this application, and we should be surprised if A's entitlement under A's tutelle did not amount to at least £10,000. Nonetheless, it seems to us premature to make any order for a payment on account. No evidence of extreme need has been placed before us, and we think that it would be preferable to await the preparation of accounts which will show precisely what is due.
27. The question of costs is left over for another day. We give liberty to apply in the event that any of the parties seeks assistance in the implementation of this order.
Authorities
Tostevin-v-Piquet (1904) 11 CR 431.
Loi (1862) Sur Les Tuteurs.
Droit Coutumier de Jersey.