Executors or personal representatives of a deceased person’s estate are responsible for settling debts of the estate, calling in any loans, realising any property or shares, paying tax and paying distributions to the beneficiaries. They have all sorts of duties to look after the estate as trustees, administer it promptly, keeping accounts and dealing with any trusts. But what if you’re concerned that they are not carrying out their role properly? Each case will depend on its own facts, but this article should give you an overview of the Court’s powers to remove executors and appoint new ones. Due to the length of this the article will come in two parts 1] Court’s powers and 2] Procedure.

There are many reasons why beneficiaries of an estate may wish to remove a trustee an executor or personal representative of the estate. It may be that the executor is acting in bad faith, delaying matters unnecessarily, taking steps which may harm the estate, or failing to take steps to maintain the estate. As frequently happens in context of a family where the trustee or executor is a family member, that they have a conflict of interest. There are also situations where a joint executor may need to remove a co-executor, due to the problems outlined above. I have referred to trustees as well as executors and PRs, because the legislation enables the removal of both.

The Courts’ powers

The Courts have jurisdiction to remove and appoint executors and trustees under three important pieces of legislation:

• Section 50 Administration of Justice Act 1985 (Section 50)

• Section 116 Senior Courts Act 1981 (Section 116)

• Section 1 Judicial Trustees Act 1896 /Section 1 JTA)

A) Section 50 power to appoint substitute for or to remove personal representative

Such an application must be made to the High Court. The application can be made by or on behalf of a personal representative of the deceased, or a beneficiary of the estate. Section 50 provides that the Court has a discretion to appoint a person as personal representative (PR) in place of an existing PR, or if there are two or more existing PRs, to terminate the appointment of one or more.

The first thing to say is that Section 50 gives the Court discretion. This is a broad discretion, meaning that the Court may consider each case as it comes and decide whether and how to exercise that power to do justice in each case.

Although the claim must be issued in the High Court, it may be transferred to the County Court where appropriate.

If an order is made under Section 50, that order will take effect from the date of the order meaning that the new PR is appointed. Note it is not from the date of death or from the date of the Grant of Probate.

If there is a case of intestacy (no valid Will exists), then one cannot make an application under section 50 until a Grant of Probate has been obtained.

B) Section 116 Power of Court to pass over prior claims to grant

In special circumstances, and importantly before the Grant of Probate has been made, and if it appears to the High Court to be "necessary or expedient" it may appoint an administrator other than the person who would have been entitled to the Grant. In practical terms, this means that if a person is named in a Will, or under the Intestacy Rules they would be entitled to be the personal representative to take a Grant of Probate on an estate, the Court can intervene to appoint someone else.

It may be that this avenue under Section 116 is for noncontentious matters, for example if there is some urgency, the person is bankrupt, the person is seriously ill or suffers from dementia or cannot be traced or is in prison, and where there is a more appropriate person to step in to manage the estate.

C) Section 1 JTA Power of Court on application to appoint a judicial trustee

This is similar to the Section 50 power albeit there is a wider jurisdiction for an application made to Court by or on behalf of a person creating the trust, or by a trustee or beneficiary. The Court has a discretion to appoint a person to be a trustee of that trust if "sufficient cause is shown" in place of all or any existing trustees.

There is an important provision at Section 2 that the administration of the property of a deceased person shall be a trust for the purposes of that legislation. When applying under section 1 JTA, ss7 provides that an application relating to an estate the Court may if it thinks fit to proceed as if the application were a Section 50 application. So there is naturally some overlap here.

Lastly, Courts have an inherent jurisdiction in executing the trusts to remove a trustee without appointing a new trustee in his place, and even though his consent or cooperation is not forthcoming (Lewin on Trusts 20th edition pages 14-74).

Applying the criteria

The Courts will generally adopt the ‘welfare test’ (Letterstedt v Broers [1884] UKPC 1). The overriding consideration is the welfare of the beneficiaries and that the trusts are being properly executed. Lord Blackburn held "in exercising so delicate a jurisdiction as that of removing trustees, their Lordships do not venture to lay down any general rule beyond the very broad principle above enunciated, that their main guide must be the welfare of the beneficiaries."

In addition to affirming this foundational or principle, Lord Blackburn went further to say "probably it is not possible to lay down any more definite rule in a matter so essentially dependent on details often of great nicety". This is judge-speak for not having a definitive rule on what will or will note result in removal of a trustee, but we should focus on the beneficiaries’ interests.

There are some other important matters to consider before making an application to remove an executor or PR:

1. just because an executor has made a mistake or neglected a duty does not mean that they would be removed;.

2. "friction or hostility between Trustees" will not in itself be sufficient reason to remove an executor or trustee. Breakdown in relations is a factor the Court may take into account if its obstructing the admissions of the estate (Kershaw v Micklethwaite)

3. If the welfare of the beneficiaries is compromised and the Court considers removal to be appropriate, a Court will not necessarily be concerned with disrupting the ‘status quo’.

4. An application in the recent case of Re: Saville’s Estate where Patten LJ considered whether "continuation in office is likely to prove detrimental to the interests of the beneficiaries". This does not mean that wherever accusations are made the relationship has broken down such that the trustee must be replaced.

5. there is no cause of action to be proved by the applicant. This is important and serves to underline that an application is to place before the Court the opportunity to exercise its discretion in removing/replacing a trustee. The Court will not just consider the interests of the applicant, but will look to the welfare of the beneficiaries as a whole.

6. the beneficiaries need not be parties although they are able to bring an application. Again, the Court will not necessarily be swayed by the interests of a particular beneficiary but will more likely look to how the estate or trust is being administered and whether assets are being protected. This is viewed by the Court objectively rather than the subjective views of one particular beneficiary.

7. it is quite possible that the Court considers the trust or estate and imposes its own remedy which might be different to those put forward by the parties.

Summary

So, rather than set out a long list of kinds of activities which would lead to a successful application under Section 50 or otherwise, it is perhaps better to ask the question:  "Is the estate/trust not being properly administered, and is the welfare of the beneficiaries compromised?" If the answer to those questions is ‘yes’, then your application is more likely to be successful.

This article was written by Toby Walker, Dispute Resolution Partner at Allan Janes LLP.  In addition to experience of successfully having removed executors, Toby and his Team have specialist expertise in the area of contested probate, trusts and proprietary estoppel claims. Please do not hesitate to contact us for a free no obligation telephone discussion.

Note from the author: this article Part 1 and Part 1 attempts to summarise the lecture by Chief Chancery Master Marsh to the ACTAPS annual lecture on 9 November 2020