Scottish Sheriff Court Decisions

SHERIFFDOM OF GLASGOW AND STRATHKELVIN AT GLASGOW

[2016] SC GLA 80

F446/16

NOTE

by

SHERIFF JOHN NEIL McCORMICK

re

CHARLES RAYMOND GARNETT, Executry

Glasgow, 25 November 2016

[1]        This Note concerns sections 18, 19 and 20 of the Succession (Scotland) Act 2016.  It stems from submissions made by an unrepresented executor-dative and deals with issues of significance to many but which, because of the sums involved, go unnoticed.

[2]        Section 18 of the Succession (Scotland) Act 2016 amends section 2 of the Confirmation of Executors (Scotland) Act 1823 and section 3 of the Intestates’ Widows and Children (Scotland) Act 1875. 

[3]        Read short, a bond of caution is no longer required for an intestate small estate (currently an estate not exceeding £36,000: The Confirmation to Small Estates (Scotland) Order 2011, SSI 2011/435) prepared by the sheriff clerk.  Section 3 of the Intestates’ Widows and Children (Scotland) Act 1875 is amended to that effect.

[4]        In addition, for a small intestate estate where the executor is the spouse or civil partner of the deceased and, as the estate does not exceed prior rights, there is no requirement for a bond of caution.   Section 2 of the Confirmation of Executors (Scotland) Act 1823 is amended to that effect.

[5]        In a large intestate estate (an estate over £36,000) a bond of caution is required, except for a spouse or civil partner where the estate does not exceed his or her prior rights (section 2 of the Confirmation of Executors (Scotland) Act 1823 as amended).

The issues

[6]        The first issue is whether the court has discretion to waive the requirement for caution.  In my opinion the court has no discretion.  The pre-existing law in that regard is unaltered.

[7]        The second is whether the court has power to reduce the amount for which caution is sought.  The court does have such power, but not to reduce the sum to nil.  The pre-existing law in that regard is unaltered.

[8]        The third is to identify a somewhat anomalous situation, namely, that where an executor-dative decides to seek the assistance of a solicitor for an intestate small estate, a bond of caution is required yet a bond is not required where the application for confirmation is prepared with the assistance of the sheriff clerk. 

Background

[9]        Charles Raymond Garnett died intestate on 17 May 2015.  Charles Raymond Garnett Junior was appointed executor-dative qua son of the deceased conform to decree dated 12 August 2016.  On 22 August 2016 the executor-dative wrote to the court in the following terms:

“I would request the sheriff to exercise his/her discretion to confirm myself, Charles Raymond Garnett, son of deceased, executor dative (petition No F446/16, granted 12/8/16) to my father’s estate, without having a ‘Bond of Caution.’

I urge the sheriff to be mindful of the Scottish Government’s intention to abolish the need for a bond of caution and also take into account the following facts:

The total value of the estate is relatively small - £55,375 with total liabilities of £22,778, with only myself and my sister as beneficiaries, it is very likely that the estate will be properly administered by myself, Charles Raymond Garnett, and the likelihood of creditors and beneficiaries of the estate requiring to be indemnified against loss caused by maladministration, negligence or fraud on the part of the executor is extremely unlikely.

Having the right to share in the intestate estate of my father, the said Charles Raymond Garnett, I request the sheriff to confirm myself as executor.”(sic)

[10]      A hearing was assigned for 20 September 2016 which the executor-dative attended, accompanied by his sister.  They are the sole beneficiaries.  Mr Garnett was under the impression that the court had discretion whether to insist on a bond of caution.  Mr Garnett had understood that the court may have such discretion from websites which he referred me to.  He also referred to the Scottish Law Commission Report on Succession dated 20 March 2009.  That aside, he reiterated the tenor of his letter.  I was invited to waive or reduce caution. 

[11]      For completeness I should perhaps mention that cautioners will insist that a solicitor is involved in the administration of an estate irrespective of its value.  The cautioner which had been prepared to issue a bond without the instruction of a solicitor withdrew from the market earlier this year.  Accordingly, in practical terms, an executor-dative does not have the option of finding caution without also instructing a solicitor.

[12]      Here the whole estate (the term inserted within section 3 of the Intestates’ Widows and Children (Scotland) Act 1875 by the Confirmation to Small Estates (Scotland) Act 1979) exceeds the £36,000 ceiling for a small estate.  The estate is therefore a large estate.  Caution is required.  As caution is required, solicitors will be instructed.  The expense of solicitors and of caution will deplete the residue (£32,579) available for distribution. 

[13]      I gave an extempore decision so as to avoid delay in the administration of the estate.

Discussion

[14]      Since an unreported decision (Preston, 11 March 1874 referred to within Currie on Confirmation of Executors, 9th Edition by Eilidh M Scobie at paragraph 9.15) it has been accepted that the court has no discretion to waive caution.  That has remained the unchallenged position since and I see nothing within the Succession (Scotland) Act 2016 to alter the pre-existing law.

[15]      The circumstances in which caution is required are prescribed by Act of Parliament.

[16]      In terms of section 19(2) of the 2016 Act Scottish Ministers may modify section 2 of the Confirmation of Executors (Scotland) Act 1823 so as to add cases where caution will not be required.  That power does not vest in the court.

[17]      Moreover, in terms of section 20 of the 2016 Act Scottish Ministers may make provision to the effect that executors-dative are not required to find caution in any circumstances. 

[18]      In short, there is no statutory provision which would permit a court to waive the requirement for caution.  Parliament has provided that the discretion to increase the range of circumstances where caution is either not required, or dispensed with altogether, is reserved to Scottish Ministers.  Had Parliament intended such discretion to vest in the court, Parliament would have enacted a provision to that effect. 

[19]      Nothing in the 2016 Act changes the pre-existing law, namely, that although a sheriff may not dispense with caution, the sum required for caution can be varied. 

[20]      The procedure and the requirements incumbent upon an executor-dative wishing to vary the level of caution are as outlined in paragraphs 19.20 to 19.27 of Currie.   To reduce the level of caution is uncommon.   I can recall doing so on one occasion (where the estate exceeded the maximum sum for which cautioners would issue a bond).

[21]      To conclude, the court retains discretion in relation to the level of caution but may not waive it.  That deals with points 1 and 2 above.

[22]      Turning to issue 3, caution is not required where an executor-dative seeks the assistance of the sheriff clerk when preparing the application for confirmation to a small estate.

[23]      The anomaly is this:  where an executor-dative decides to instruct a solicitor to wind up a small estate, caution is necessary (over and above the protections and professionalism of a solicitor) when, for the same estate, caution is not required where the executor-dative seeks the assistance of the sheriff clerk at public expense. 

[24]      Before closing I observe that Mr Garnett was not legally represented.  His letter was, however, symptomatic of situations in which executors-dative find themselves, namely, having to deal with an estate which, once debts are settled, is to them a modest estate, yet for commissary purposes it is not classed as a small estate.  The commissary clerk assesses the whole estate (not the net figure, after debts are deducted) when determining whether an estate is a small estate. 

[25]      I am advised that oral requests to waive caution are routinely made to my commissary clerk at the counter by executors-dative such as Mr Garnett under the impression (from websites or elsewhere) that the court has discretion.  The court has no discretion - hence this short note.