Removing an Executor: Section 50 Administration of Justice Act 1985
The role of an estate executor can be a difficult one and is certainly not without its perils, particularly in circumstances where disputes arise between an executor and estate beneficiaries. Executors owe a fiduciary duty towards the estate’s beneficiaries. This means that they must act in the best interests of the estate, with reasonable care and skill, and all the while owing an obligation of loyalty and fidelity towards the beneficiaries.
So, what happens when an executor falls short of meeting these onerous obligations?
With increasing frequency, we are seeing disputes between executors and beneficiaries reach boiling point, where, had steps been taken sooner, a resolution might have been agreed. Commonly, beneficiaries complain about delays, or ineffective administration of the estate. Less often, but still with enough frequency to be noteworthy are the cases in which beneficiaries accuse the executors of causing the estate to suffer a tangible loss (known as devastavit), sometimes through their own dishonesty.
Regardless of the cause, once the beneficiaries reach a stage where they consider the executor must be removed, an application can be made to the court to bring this about. The most common means of doing so is by making an application under Section 50 of the Administration of Justice Act 1985.
Section 50(1) of the Administration of Justice Act 1985 provides the following:
“(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;”
This means that the Court can be called upon to remove an executor and appoint another person to act in their stead as the personal representative of the estate. The criteria for whether the Court will agree to remove an executor has been adapted from the case of Letterstedt v Broers (1884) 9 App Cas 371, which originally dealt with the removal of a trustee. The test established in that case was:
“If satisfied that the continuance of the trustee would prevent the trust from being properly executed, the trustee might be removed. The court is mindful that the trustee exists for the benefit of those to whom the creator of the trust has given the trust estate.”
The test in Letterstedt v Broers was adopted and adapted to applications under Section 50 in the case of Thomas and Agnes Carvel Foundation v Carvel [2008] Ch 395. In cases involving personal representatives of an estate, including executors, the overriding consideration of the Court is whether the estate was being properly administered and a key factor that the court should consider is the welfare of the beneficiaries.
More recent case law has also provided further guidance as to how the Court will approach an application to remove and replace a personal representative. In particular, the case of Long v Rodman and Others [2019] EWHC 753 (Ch) in which Chief Master Marsh held the following:
“It is not the role of the court on hearing an application under section 50 necessarily to make findings of wrongdoing. It is clear however, that where the beneficiaries are able to make out complaints that warrant further investigation, the continued tenure of the administrator becomes untenable unless the complaints are trivial.”
As a direct result Long v Rodman, one can draw two key conclusions; firstly, the executor does not necessarily need to have committed a serious fault or been dishonest to be removed, but secondly, even if the possibility of wrongdoing has not been determined, the executor will be removed if the possibility of them having harmed the estate presents an ongoing risk to the estate.
While the above provides a very brief overview of the means of removing an executor, and the considerations that the court will take into account, and the process itself can be risky if the proper steps have not been followed. The Court will have certain expectations of the parties who take part in these applications and, should those expectations not be met, it is possible for an otherwise meritorious application to fail, with the potential for severe costs consequences to follow.
Accordingly, if you are a beneficiary of an estate who is having trouble with a difficult executor, or if you yourself are an executor who is facing scrutiny and is concerned about potentially being removed, our experts at BRM are happy to assist.
