Posted: Tuesday, 6 October 2020 @ 15:57
As many of you know the removal/substitution of executors is governed by section 50 of the
Administration of Justice Act 1985 which 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 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.”.
Thus mere friction or hostility between the executors and beneficiaries is rarely
enough to justify substitution/removal. The decision in Lettersted
(now Vicomtessemontmor)t v Boers and others [1884] 9 App Case is still
cited with approval on the issue of removal/substitution of executors “It is
quite true that friction or hostility between trustees and the immediate
possessor of the trust estate is not of itself a reason for the removal of the
trustees. But where the hostility is grounded on the mode in which the trust
has been administered, where it has been caused wholly or partially by
substantial overcharges against the trust estate, it is certainly not to be
disregarded.”
However, more recently in the case of Thomas & Agnes Carvel Foundation v Carvel [2008] Ch 395 at
paragraph 44 Lewison J having cited the above with approval went on to say
"But in cases of positive misconduct, courts of equity have no difficulty
in interposing to remove trustees who have abused their trust; it is not indeed
every mistake or neglect of duty, or inaccuracy of conduct of trustees, which
will induce courts of equity to adopt such a course. But the acts or omissions
must be such as to endanger the trust property or to shew a want of honesty, or
a want of proper capacity to execute the duties, or a want of reasonable
fidelity."
He continued, at p 386 paragraph 45: "It seems to their Lordships that the
jurisdiction which a court of equity has no difficulty in exercising under the
circumstances indicated by Story is merely ancillary to its principal duty, to
see that the trusts are properly executed. This duty is constantly being
performed by the substitution of new trustees in the place of original trustees
for a variety of reasons in non-contentious cases. And therefore, though it
should appear that the charges of misconduct were either not made out, or were
greatly exaggerated, so that the trustee was justified in resisting them, and
the court might consider that in awarding costs, yet if satisfied that the
continuance of the trustee would prevent the trusts being properly executed,
the trustee might be removed. It must always be borne in mind that trustees
exist for the benefit of those to whom the creator of the trust has given the
trust estate."
And that is the rub. Given the slowness of pursuing legal actions elsewhere removal of executor applications remain a strong possibility for beneficiaries and the above case law gives the platform for doing so.