Scottish Sheriff Court Decisions

SHERIFFDOM OF GLASGOW AND STRATHKELVIN AT GLASGOW

2015 SCGLA29

F155/15

JUDGMENT

OF

SHERIFF JOHN NEIL McCORMICK

re

K F C, Executry

GLASGOW, 31 March 2015

The Sheriff, having heard the solicitor for the executors-nominate, refuses to grant authority to the sheriff clerk to issue confirmation on an application for confirmation dated 17 December 2014 signed by an attorney of the first named executor-nominate.

SHERIFF

NOTE:

[1]        The issue is whether it is competent for an executor-nominate which is a company, in this case The Royal Bank of Scotland Plc, to appoint an attorney.  In my opinion it is not. 

[2]        By will dated 24 April 2011, K F C appointed The Royal Bank of Scotland Plc and his wife to be his executors-nominate.  K F C died on 11 May 2014.

[3]        On 15 September 2014, The Royal Bank of Scotland Plc granted a power of attorney in favour of five named partners within Brodies LLP, one of whom signed the application for confirmation on 17 December 2014.

[4]        The application was submitted along with supporting documentation to this commissariot.

[5]        A hearing was assigned for 17 March 2015.  Miss O’Neill represented the executors.

Submissions

[6]        At common law a company can appoint an attorney to carry out its functions, including executing documents, on the company’s behalf.  Any power to delegate to an attorney would be contained in the company’s Articles of Association.  The Royal Bank of Scotland Plc has Articles of Association which permit the directors to delegate to an attorney (Article 124).

[7]        Miss O’Neill accepted that the bank had not, until recently, sought to use a power of attorney when fulfilling the office of executor.  She emphasised that the power of attorney had been intended to provide only for the administrative function of executing deeds, including the declaration on the application for confirmation.  It had not been the intention of the bank to inappropriately delegate the powers of an executor.  Miss O’Neill accepted that the wording of the power of attorney went much further than merely the power to sign the declaration, even assuming such a restricted power of attorney was competent.  The intention had been to regularise agency arrangements between the bank and the solicitor – though quite why that was required, was not explained.  It was accepted that an executor could appoint solicitors without the necessity of a power of attorney.

[8]        An executor who is an individual is not entitled to appoint an attorney.  Miss O’Neill sought to draw a distinction between an individual executor and an executor which is a company, such as a bank, which requires persons to execute documents on its behalf. 

[9]        While there is a difference between a company executing deeds in the accepted manner and the company granting a power of attorney, Miss O’Neill submitted that the difference was merely “conceptual”.

[10]      I was advised that since the power of attorney had been executed in September 2014 a few similar cases had been processed by sheriff courts elsewhere.  It was not submitted, however, that those applications should persuade me as to the competency of the process.  Those applications had been processed administratively and may not have been drawn to the attention of the sheriff.

[11]      I referred Miss O’Neill to the observations of Eilidh M Scobie within Currie on Confirmation of Executors, 9th Ed, at paragraphs 8-38 and 8-39.  Other than her earlier submission seeking to distinguish a corporate executor from an individual, she had no further submissions to make on these paragraphs.  There was no challenge to the correctness of the approach outlined in Currie.  There was no challenge to the reasoning of Sheriff Macvicar in Leishman, unreported, 17 December 1980 which is referred to in Currie.

Decision

[12]      In an unreported decision by Sheriff Macvicar (Leishman, unreported, 17 December 1980) the Sheriff considered the case of a UK resident executor suffering from ill-health.  There, the arguments in favour of a power of attorney were more compelling than in the current case.  Mr Leishman was discerned executor-dative qua husband to his late wife but three days earlier had granted a power of attorney in favour of his solicitor.  That power of attorney contained the standard clause used by an executor living overseas enabling a UK resident to apply for confirmation in his name.  Sheriff Macvicar refused to grant warrant to the clerk to issue confirmation.  The details of the case are specified at greater length at paragraph 8-38 of Currie but it is sufficient for me to record that Sheriff Macvicar refused to allow a power of attorney to be used and opined:

“In my opinion, the proper principle to be applied is that, if a person entitled to be confirmed as executor does not feel able to accept the fiduciary responsibilities of the office and to carry out his duties in person, his proper course is to decline the office.”

[13]      The opinion of Sheriff Macvicar remains relevant and in my opinion correct.  Indeed, I detected no criticism of this approach.  For an unspecified reason, the suggestion is that a corporate executor should be entitled to appoint an attorney though an individual executor is not.  I was not provided with authority.  I was not advised of any difficulty which had impeded the administration of estates prior to September 2014 when the bank had decided to execute a power of attorney.  It was accepted that an individual executor-nominate could not appoint an attorney yet no reason was proffered as to why such an accommodation should be afforded to a corporate executor-nominate.

[14]      The sole reference to an executor having the power to appoint an attorney in relevant legislation occurs in the context of an executor residing abroad who may appoint someone in Scotland as his attorney (Consular Conventions Act 1949, s2).  Aside from that exception, parliament has not provided for an executor appointing an attorney and I see no reason to extend that exception.  On the contrary, there are sound public policy reasons for not doing so.  The executor, corporate or otherwise, should execute and accept responsibility for the declaration on the application for confirmation.   It is the executor who seeks to be confirmed in that office.  To permit an executor to exercise his, her or its powers by way of an attorney (save in the exception of an executor resident abroad) would be open to abuse.  Where a testator names an executor-nominate, it is an appointment personal to the accepting executor.

[15]      The fiduciary duties of an executor-nominate are personal to the holder of that office.  Those fiduciary duties include applying to be confirmed on the entire known estate of the deceased, settling liabilities and distributing the estate in accordance with the will.  Civil liability may lie with an executor.  Allegations of fraud are comparatively rare (quite possibly because of the well understood and personal nature of the fiduciary duties accompanying the office of executor) but they do occur.  It is in the public interest that an individual or a company, having accepted office as executor, does not distance himself, herself or itself from the fiduciary responsibilities incumbent upon an executor.  This applies, irrespective of whether, as here, the executor is entitled to charge a fee.

[16]      No authority was provided to support a departure from longstanding and accepted practice.  No colourable reason was provided, other than an unspecified convenience to the bank.  It is obtuse to suggest that there is merely a “conceptual” difference between the bank as executor and its attorney.  It was suggested, albeit fleetingly, that the power of attorney reflected agency arrangements between the bank and the solicitors.  I fail to see that a power of attorney is required for that purpose.  An executor can appoint a solicitor (Trusts (Scotland) Act 1921, s4(1)(f)) at suitable remuneration. 

[17]      In short, the submissions lacked depth.  The implication is that it may be administratively convenient for the bank, though why that is, is not clear.  If the administration of such estates is inconvenient, the option is to decline or to resign office as executor-nominate.  (An executor-dative may not resign office, Succession (Scotland) Act 1964, s20).

[18]      While it may be competent for a company or a private individual to grant a power of attorney, it is not competent for an executor to do so unless he resides abroad. 

[19]      Accordingly, I refuse to grant warrant to my clerk to issue confirmation following upon a declaration signed by an attorney for the first executor-nominate.

[20]      Separately, before closing I wish to mention three matters of concern.  The first involves the approach towards the court.  The law and procedure is clear, well settled and is not seriously in dispute.  The process of applying for confirmation is routine and well understood by the bank.  Had the bank wished to adopt a different approach, the proper course would have been to draw this to the sheriff clerk’s attention and seek a hearing before the Sheriff, rather than wait for a vigilant sheriff clerk to notice.

[21]      The second is an example of the perils of the approach being suggested in the above case.  The court has received a second application for confirmation also purporting to use a power of attorney, this time by a different bank.  It too is a Scottish bank.  The deceased had been resident in Scotland.  The power of attorney was executed in Scotland.  It contains similar wide powers.  It purports to appoint as its attorney an unspecified number of unnamed (described only by eight job titles such as “estates manager”, “trust manager” and the like) employees of a separate bank, having its registered office in London.   The deed states that it shall be governed by English law.  It has been returned.

[22]      Finally, I am drawn to the possibility that to certain executors, the fiduciary duties accompanying that office may have become an administrative inconvenience occurring between death and fees.  If that is the case, such an approach is to be deprecated.