Delays in the administration of a person’s estate – what action can be taken?
So what can a beneficiary do if there is an inexcusable delay in the administration of a person’s estate? Section 50 of the Administration of Justice Act 1985 provides a mechanism whereby the court can remove an executor and appoint a replacement. In practice, such applications tend to be rare. In deciding whether or not to accede to the application the court exercises a discretion and the primary consideration in the exercise of that discretion is the welfare of the beneficiaries as a whole. There must be evidence before the court of detriment to the beneficiaries before an order will be made. In 2014 Lord Justice Patten had this to say in Re Savile’s Estate:
‘… the direct intervention by the Court in the administration of a trust or an estate by the removal of the trustee or personal representative has, for the most part, to be justified by evidence that their continuation in office is likely to prove detrimental to the interests of the beneficiaries. A lack of confidence or feelings of mistrust are not therefore sufficient in themselves to justify removal unless the breakdown in relations is likely to jeopardise the proper administration of the trust or estate. This is something which requires to be objectively demonstrated and considered on a case-to-case basis having regard to the particular circumstances’.
Accordingly mere disagreement or friction and hostility is not always enough but what about delay? This was a subject recently considered by Master Clark in the matter of Gaskin v Chorus Law Limited & another. In that case the deceased died in 2012 and in September 2013 Chorus obtained a grant of letters of administration for the use and benefit of the second defendant (one of the deceased’s daughters). By January 2016 nothing had been done to sell the deceased’s property which was the main asset in the estate nor had any interim payments on account been made to the beneficiaries. Mr Gaskin, the deceased’s son, therefore threatened, and then brought, proceedings to remove the administrators.
The actual facts of the case are rather more complicated but the judge reminded himself that a personal representative is under a duty to ‘collect and get in the real and personal estate of the deceased and administer it according to the law’. He found that this duty must be carried out with due diligence and that, although there was no fixed rule that a personal representative must have realised the deceased’s assets within any particular time, if there was a delay of more than one year from death there was a burden on the representative to show some valid reason for the delay. The judge went on to find that there had been a failure by Chorus to administer the estate with due diligence and that Mr Gaskin was justified in seeking its removal.
What then followed was a substantial argument over who should be responsible for the costs of the dispute. According to the case report the parties’ combined costs of the claim exceeded £180,000 and represented just under half of the value of the estate. Sadly costs of this magnitude are not uncommon in situations such as this but it shows how devastating it can be for all concerned. Curiously in this instance the second defendant had been reluctant to instruct solicitors to administer the estate for reasons of cost.
In making his costs order the judge divided the claim into different time periods (because of the discovery of a disputed Will in favour of the second defendant part way through the case). The judge decided that the defendants should each pay 50% of the claimant’s costs for the period up to the discovery of the Will, then for the second period until Chorus’ removal it should pay 50% of the other parties’ costs (with the other 50% coming from the estate). Some later costs were also to fall on the estate but Chorus and the second defendant also had to pay the claimant’s costs for dealing with the costs argument. This result therefore landed Chorus with a substantial costs bill even though in its Defence it had agreed to be removed as personal representative. It also ensured that the estate itself was depleted by significant legal costs. A sad outcome all round.