FREE CHAPTER from ‘A Practical Guide to Elderly Law – 2nd Edition’ by Justin Patten

CHAPTER THREE

EXECUTORS – CHALLENGING THE EXECUTOR

How to Deal With Difficult Executors

An executor will generally remain entitled to a grant of probate and to administer the estate in priority to anyone else (Non-Contentious Probate Rules 1987).

If an executor is being difficult, what are tools are at his or her disposal to bring the executor into order? For ease of reference what we are referring to are options which lie if the deceased died in England and Wales.

TIP The executor is given one year to distribute the estate – As a result during that year be cautious (unless there is a risk of assets being illegally distributed) in taking action. After ten months from date of death it starts becoming a different ball game and the beneficiary/person with an interest can start by being more aggressive in challenging the executor.

Pre-grant

It is not always clear pre-grant that an executor nominated in a will is likely to be problematic, particularly where that executor is a professional. However, where trouble arises or is anticipated, the following routes can be considered.¹

Caveats

Often a sensible first step in stopping a grant of probate to an unsuitable executor is to enter a caveat, as it prevents a grant being made in respect of an estate (except grants ad colligenda bona or pendente lite). Indeed in some cases such as citations, a caveat is a necessary precursor.

The procedure is mostly contained in NCPR r.44. Unless warned, caveats generally remain in force for six months, unless the registrar orders otherwise but they can be extended for subsequent periods (see NCPR r.44(3)).

What are Caveats?

Caveats are a system of preventing common form grants. They are important where there are genuine concerns about the validity of a Will or the suitability of a particular person acting as executor or administrator. The caveat procedure is used to prevent a Grant of Probate or Letters of Administration being taken out in respect of a deceased’s estate. The person who puts the caveat in place is called the caveator.

Why would you want to lodge a caveat?

The reasons include:

• Where the caveator wants to prevent the Grant of Probate being taken out as they believe the Will of the deceased is invalid for some reason, such as the person who made the Will did not have the mental capacity to do so, or the Will was not properly witnessed;

• Where the caveator wants to prevent a Grant of Letters of Administration being taken out on the basis that the deceased died intestate, when they believe there was a validly-executed Will in existence; or

• Where the caveator is aware of or involved in a dispute about who is entitled, or is the appropriate party, to take out the Grant of Letters of Administration.

When is it not appropriate to issue a caveat?

It is not a good idea to lodge a caveat where the caveator wishes to bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975. This is because a claim under this Act can only be brought once the grant of representation has been taken out. This is a common error made. However, it can be an innexpesive way to block estates.

What is the procedure for issuing a caveat?

A caveat can be lodged at any Probate Registry; this does not need to be at the probate registry local to the deceased. The Probate Registry will need:

• The deceased’s name, date of death and address;

• The name and address of the caveator;

• The request for the caveat to be signed by the caveator or their solicitor;

• A fee of £20

The caveat is then valid for six months. It can be renewed at the end of this period on payment of a further fee.

How can the caveat be removed?²

The caveator can remove the caveat at any time by writing to the Probate Registry. Given this a legal letter may be a good idea informing the individual that it is an abuse of proceedings to issue a Caveat inappropriately (see Parnall v Hurst [2003] WTLR 997.) 4

Any interested person may therefore issue a “warning” to the caveator. A warning is a notice to the caveator and must be in the prescribed form. A warning can only be entered at the Leeds District Probate Registry. There is no fee for issuing a warning to a caveat.

The person issuing the warning must state the nature of his interest and the date of the Will (if any) in the warning and it must be served on the caveator in accordance with specific rules as to service. The warning must also require the caveator to state the nature of his interest.

Once the warning has been served on the caveator, one of the four things will happen depending on what right the caveator is alleging and what steps he chooses to take:

• The caveator may withdraw his caveat – this can be done at anytime before he enters an appearance to the warning. When a warning has been issued, then the caveator must give notice of his withdrawal to the person issuing the warning. The caveat must be withdrawn at the registry in which it was entered. No fee is payable upon the withdrawal of the caveat.

• The caveator may enter an “appearance” – an appearance should be entered in the prescribed form at the Leeds District Probate Registry within eight days of service of the warning on the caveator. If the caveator does not enter an appearance then the person issuing the warning may take steps to “warn off” the caveator. Once an appearance has been entered, the caveat remains in force until a District Judge (or, when the parties consent to the discontinuance of the caveat, a registrar) otherwise directs. There is no fee for entering an appearance.

• The caveator may issue and serve a summons for directions – this must be done within eight days of service of the warning, otherwise the caveator risks being warned off. Please note that a summons for directions may only be issued by a caveator who has no interest contrary to that of the person issuing the warning. After a summons for directions has been issued there will be a hearing before a District Judge at which he will decide to whom a grant should be made.

• A caveator may do nothing – in this case the person issuing the warning may file an affidavit in the Leeds District Probate registry after the eight-day time-limit for entering an appearance has expired. The affidavit must show that the warning was served on the caveator. The caveat is then said to be “warned off” and is no longer effective so that the person issuing the warning is then free to proceed with his application.

TIP Caveats are an in expensive blocking tool and can actually quite effective to bring the other side to the table. Be warned that your bluff may be called and then you have to be prepared otherwise your client will face a costs award. As we see later, they must be used if you are about to issue a citation.

Renunciation

Renunciation is only an option where a nominated executor is cooperative since the executor cannot be forced to renounce.

This can only be used where an executor has not already intermeddled with the estate.

Anyone named as an executor in a will may abandon the role by signing a renunciation witnessed by a disinterested witness, ie the witness must not be mentioned in the will, and should not be a family member.

What is Intermeddling?

Intermeddling is carrying out the sort of tasks that an executor may do, such as letting a bank know of the death. If there are two executors and one is given a specific legacy and takes possession of that legacy without consent of the co-executor, this will amount to an act of administration.

This is why it is important if you do not wish to extract a grant not to take any steps in relation to the estate.

Arranging a funeral is not intermeddling.

A renunciation must be absolute, and will take effect from the time that it is signed; though it remains possible to withdraw it at any time prior to it being lodged at the probate registry.

Once it has been lodged (together with the original will, or if this is not available, a verified copy), it can only be retracted with the permission of a district judge or registrar.

Where an executor is willing and able, however, for example where he simply wants nothing to do with the administration, he may renounce, effectively abandoning his right to a grant of probate (see AEA s.5(iii)).

This allows the next entitled person (under NCPR r.20 – generally a residuary legatee), to take a grant.

The renunciation must be in writing and while this can be done any time after a testator’s death. Once made, a renunciation can be retracted but only with the leave of a district judge or registrar, and only in exceptional circumstances where probate has already been granted to someone else (NCPR r.37(3)).

Citations

Where renunciation is not possible, citations are a good tactical way of trying to force a delaying executor into action, or to entitle someone else to administer the estate.

There are two main types to consider: a citation to accept or refuse a grant, and a citation to take a grant.

Citation To Accept or Refuse a Grant

• Applies where an executor has not intermeddled and cannot be persuaded to renounce.

• Is taking no steps to obtain a grant of probate, he can be cited by the person next entitled to a grant to accept or refuse probate (NCPR r.47(1)).

• If the executor fails to appear or apply for a grant, the citor is entitled to apply for a grant to himself (NCPR r.47(5)(a); 47(7)(a)).

Citation To Take A Grant

• Applies where an executor has intermeddled in the estate (so that renunciation is impossible).

• Has not taken a grant within six months of death he may be cited by any person interested in the estate to show cause why he should not be ordered to take a grant (NCPR r.47(3)).

• If the executor fails to appear or apply for a grant, the citor may apply for an order requiring the executor to take a grant (if such an order is made and breached, the executor will be liable for committal), or for a grant to himself or someone else (NCPR r.47(5)(c); 47(7)(c)).

Before any citation is issued, a caveat must be entered in respect of the estate and no court fee applies.,

TIP – Citations As we know, probate disputes are an expensive business. Citations are a nice form of legal action as it is quite targeted, can put the executor pressure and force him or her to start dealing with the Court. Even with the most difficult executor, do not underestimate the fear which an executor can have when faced with specific Court action.

Procedure

A citation of any type may be issued by the Principal Registry or by a District Registry and must be settled by a District Judge or Registrar. (NCPR 1987 Rule 46 (1)). The application for the issue of a citation may be made in person or by post. Everyone with an interest in the document should be cited.

An affidavit should not be sworn before a citation is settled so that it can be corrected if it does not cover the required facts. Every Will or purported Will referred to in a citation must be filed.

A citation must be served personally unless otherwise directed (NCPR, Rule 46 (4)). A Certificate of Service should be endorsed.

A person who has been cited then enters an appearance at the Registry from which the citation is issued by lodging Form 5 to the NCPR.

The form sets out the name, address and interest claimed by the citor as shown on the citation. It should also give the full name, address and details of the interest of the citee himself including the date of the Will under which such interest arises.

The citee must serve a sealed copy of the appearance on the citor by delivering it at the citor’s address for service or by sending it there by post or otherwise. The time for appearance is 8 days after service of the citation but it can be extended.

Passing over

Within the scope of s.116 of the Supreme Court Act 1981 the High Court may appoint someone other than a nominated executor (or any other entitled person) to administer the estate if it considers that by reason of any ‘special circumstance’ it would be ‘necessary or expedient’ to do so.

This can be over disputing co-executors, where there is a conflict of interest, and it can also be useful where the executor is thought to be of bad character, or where he is unlikely to administer the estate properly (such as in Re Biggs Estate [1966] 1 All ER 358).

The Court will take a broad view of “special circumstances” under s 116: Some other authority worth looking is re Clore decd [1982] Fam 113 (and on appeal as IRC v Stype Investments (Jersey) Ltd [1982] Ch 456) and Buchanan v Milton [1999] 2 FLR 844.

Generally the words “special circumstances” are not necessarily limited to circumstances in connection with the estate itself or its administration, but could extend to any other circumstances which the court thinks are relevant, which lead the court to think that it is necessary, or expedient, to pass over the executor.

The application is made without notice to the District Judge or registrar, with a supporting affidavit, (NCPR r.52), which must disclose all material facts to the court, otherwise the grant could be revoked (Shephard v Wheeler (2000) Times, 15 February).

Grant ad colligenda bona³

If the dispute looks set to continue on for some time, it is possible to consider an application for a grant ad colligenda bona defuncti.

This gives a limited grant of administration enabling the estate to be administered in the meantime for the purpose of preserving its assets.

A key aspect of a grant ad colligenda bona – and why it is attractive to the registrars and the court – is that it merely preserves, and does not allow for distribution of the estate as between competing legal parties.

It is often possible for both executors and beneficiaries to agree to this emergency measure, but it is not always an appropriate course of action, and can be an expensive and time-consuming process.

It should only be used where there is a genuine risk to the estate, and not merely to ensure a tactical advantage – see Ghafoor v Cliff [2006] 2 All ER 1079.

However, the judgment in Sifri v Clough & Willis [2007] WTLR 1453 was key of the professional executors for failing to take this precaution. Therefore, a valid method to be used by the executors.

Where a property sale needs completing or such like the procedure for a grant ad colligenda bona is simple and quick being commonly made to the registrar and can be made without notice based on an affidavit.

Procedure

Application for the grant must include a supporting affidavit in which the grounds for the application must be stated (NCPR r. 52). Unless the application is likely to be contentious it may be made without notice (see Ghafoor).

Post-Grant

If probate has been obtained these are the following options to bring the executor to account.

Inventory and account

My favourite application as it can achieve so much and with respect to executors who are committing fraud, it can provide access to bank accounts which fraudulent executors hate; it is also inexpensive. I have seen the most obstructive executors fold once they have faced a costs order and the threat of committal if they breach an order.

It is the quickest way to compel a lazy or uncommunicative executor to account for his activities is to apply for an order that he exhibit an inventory and account in respect of the administration (see AEA s.25(b)).

Why I Like Inventory and Account

• It is a relatively low risk application. Unlike other court actions such as removal of executor which are not certain to win despite the evidence, it is a relatively risk-free court step and clearly defined. As a consequence, there is little downside in making the application and less stress for the client to go to Court.

• It will obtain useful information whatever which in itself is useful and can provide a springboard for further steps to be taken against the executor. One of the frustrations of dealing with an executor is that there is no obligation to disclose until the end of the process when estate accounts are produced. Here the executor has to provide the information and you see a paper trail. If something dodgy is going on, you should find out. If not, you have not necessarily wasted time on other expensive legal action.

• You should get the Court date quickly. As the application is fairly short you do not have to wait a long time (e.g more than nine months to get a final court date) to go before the Judge. Resolution is relatively quick.

• It is not expensive. Unless you and your solicitor want to burn money, the Court step is not that costly and does not have a large Court fee as well. All you have to do is pay for are the legal fees and an affidavit to be sworn in front of a solicitor (say £10). Compare that to other court steps in an era when there is a deliberate strategy from the government to get money in via court fees.

• It shifts psychological power away from the executor and to the beneficiary. Whenever I have used this application with success (and it has always been successful for me), it has shifted the inter-play with the executor and put him or her on the defensive. No executor likes to disclose bank accounts and/or have costs awards made against him or her. Here the executor finds himself under pressure and subject to potential scrutiny from the Judge. If you have done something dodgy or have something to hide, you do not like this despite the targeted nature of the application.⁴

It cannot be used pre-grant.

Procedure

Prepare a Summons which is sent to the High Court together with a supporting affidavit (NCPR r. 61).

The Court will send back the sealed summons which you will send to the Respondent and you will need to produce evidence of service. The beneficiaries of an estate are entitled to request the personal representative to provide an inventory and account. This longstanding right is now contained in s. 25 of the Administration of Estates Act 1925.

In order to get up to speed a very useful case and easy to read judgment is in the case of Ali v Taj.

This case is an excellent starting point for understanding inventory and account and restates some points at paragraph 55:

i) An order requiring the executor to provide an inventory and render an account of the administration can be enforced by means of committal proceedings (see Marshman v Brookes (1863) 32 LJPM & A 95 and Baker v Baker (1860) 2 Sw & Tr 380).

ii) Any person interested in an estate may call on the executor to exhibit and inventory and render an account of his or her administration of the estate (see Myddleton v Rushout (1797) 1 Phillim 244).

iii) An order that the executor provide an inventory of the estate and account of his or her administration of the estate can be sought at any time, even in first year following the grant of probate, during which year the executor is not bound to distribute the estate of the deceased (see Administration of Estates Act 1925 s 44) and that mere lapse of time is no bar to the discharge of the obligation (see Jickling v Bircham (1843) and Scurrah v Scurrah (1841)

iv) An executor will remain liable to provide an account of his administration of the estate even after he has been removed as an executor or his administration has expired. In In the Estate of Thomas, Deceased [1956] 1 WLR 1516 in which the court made clear that an order under s 25 of the Administration of Estates Act 1925 can be made against an executor even though he is no longer a personal representative, whether by reason of the grant having been terminated by order of the court or by a cessate grant (see also Taylor v Newton (1752) 1 Lee 15).

v) The obligation to exhibit an inventory and provide an account is not confined to the original executors, but may continue to be enforced against the executor of one of several executors, even if there is an executor of the original testator still surviving (see Pitt v Woodham (1828) 1 Hag Ecc 247 at 250).

vi) Practical or logistical difficulties in producing an account will not prevent an account being ordered. In Freeman and Fairlee (1812) 3 Mer. 44 an executor coming from India and, after 21 years, being asked to account claimed that he had left the information behind on the Indian Subcontinent. Nonetheless, the executor was ordered to produce and account within six months notwithstanding the challenges in doing so and the court recognising the likelihood that the executor would need to apply for an extension, subject to producing evidence that he was using due diligence to seek to comply with the order

Please see precedent.

TIP One of the increasing trends of inventory and account applications is the ability to make paper Directions where the Court will make an order without arranging a hearing. This can save cost and there is still the potential to claim costs. In this scenario you can submit your statement of costs at the same time as submitting your application.

If the Respondent ignores an Inventory and Account, you can apply to obtain a Penal Notice. This is a notice endorsed on an order, providing that a defendant may be found to be guilty of contempt of court if the defendant fails to comply with the terms of the order. A penal notice is a warning to the defendant that disobedience to the order may be punishable by imprisonment, a fine, confiscation of assets or other punishment under the law (CPR 81.2)

TIP Do not get sucked into massive costs on enforcing penal notices. If an executor ignores a penal notice the hassle and of cost of enforcing is not worth it. Just get on and start removal of executor proceedings.5

When You Do Not Use Inventory and Account – CPR PART 64

1. If the financial issues are complex. Sometimes the blunt tool of inventory and account is limited. In this case you should commence Part 64 legal proceedings ⁶within the High Court as a mechanism. The downside is you face greater costs risks but on a matters of complexity Part 64 is the way to go to.

2. On matters of financial complexity you should also consider instructing a forensic accountant to give added strength to your arguments.

The Court has wide power under CPR Part 64 to direct such accounts and inquiries as necessary. Where the action is for an account it can be brought under this part and is supported by a Claim form. See precedent for wording in support.

Judicial trustee

It is also still possible for a beneficiary to apply to the court under s.1 of the Judicial Trustees Act 1896 (JTA) for the appointment by the court of a judicial trustee to administer the estate either together with the current executor, or as a replacement.

The judicial trustee is entitled to remuneration out of the estate by order of the court.

It is widely recognised that in the clear majority of cases the appointment of a judicial trustee is an unnecessarily expensive and drawn out process, and a s.50 application to replace or remove an executor will be far preferable.

Since 1985 it is no longer necessary to appoint a Judicial Trustee to continue the administration of an estate.

Thus, the Judicial Trustee Act 1896 has largely fallen into disuse. However, the Official Solicitor often prefers to be appointed as a Judicial Trustee, so as to be able to make informal applications to the court for directions (see Judicial Trustee Rules 1983 r8).

Furthermore, the powers of a Judicial Trustee are wider than a personal representative, so where the estate is complicated, a Judicial Trustee may be a better choice (see Re Ridsdel [1947] Ch 597)

The application can be useful in these circumstances:

An application for a judicial trustee may be more sensible than a s.50 application is in the context of mutual wills (see Thomas and Agnes Carvel Foundation v Carvel [2007] 4 All ER 81).

Where the administration of an estate is likely to be particularly complicated for some reason. In this case, the appointment of a judicial trustee may be considered since they would have easier access to guidance and supervision from the court and can seek directions at any time. This can be more practical for all concerned but may also act as a safeguard for the beneficiaries.

Administration proceedings

Finally, the beneficiaries can make administration proceedings – Administration orders are now unusual. This is reflected in the fact that under CPR PD64 paragraph 3.1 the court will only make an administration order if it considers that the issues between the parties cannot properly be resolved in any other way. Please consider CPR PD 64.

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