Crabbe v Townsend [2016] EWHC 2450 (Ch)

Analysis

The deceased was survived by his daughter (the claimant) and his son (the defendant). The deceased died in 2004 and a grant of probate was extracted in May 2007. By his will the claimant and defendant were appointed as his executors and trustees. Various issues relating to the administration of the estate arose (see para 3). Among these was a portfolio of stocks and shares given to the claimant by the deceased’s will. It was not until February 2013 that the portfolio was assented to the claimant, and then only because she assented it to herself without the defendant’s concurrence.

In 2006, a document was prepared, signed by the claimant and defendant purporting to deal with most of the issues in relation to the administration of the estate (the 2006 letter). The 2006 letter was addressed to a solicitor who the claimant and defendant wished to instruct in relation to the administration of the estate. It recorded in terms that agreement had been reached between the claimant and the defendant and then set out the steps that would be taken.

Although one firm of solicitors had done initial work in relation to the administration of the estate the defendant had made it plain that he was not prepared to engage the firm to act in the administration of the estate and a second firm was instructed jointly in June 2005. The defendant had also engaged his own solicitor. By the end of August 2005, the executors were contemplating using another firm of solicitors, Boyes Turner. On 13 October 2005 the executors signed a short document giving authority to their respective children to negotiate terms ‘that will enable the probate solicitor to proceed with the administration of my late father’s estate’. This took place and, in March 2006, the claimant’s son went to see the defendant and the defendant’s son with the document that became the 2006 letter, already signed and dated the previous day by the claimant. The defendant signed and dated it. After signing the letter, he said to his son, who was visibly fuming, ‘boy, let that be the fucking end of it’.

The claimant asserted that the 2006 letter was a binding agreement. She asserted a breach of this agreement. If the 2006 letter was a binding agreement then all outstanding issues except the portfolio issue fell away.

The defendant asserted that it was merely a letter of instruction and merely expressed a wish that certain things be achieved. The defendant also advanced an estoppel by convention argument to argue that the 2006 letter could not be enforced.

The claimant also claimed damages from the defendant for losses she claimed to have suffered as a result of what she asserts to be breaches of the defendant’s duty as executor in relation to the portfolio (the portfolio issue).

Held:

1. 1) The 2006 letter was a binding agreement. The agreement was the foundation of the instructions to Boyes Turner, and represented a concluded agreement.
2. 2) It was a prerequisite of the existence of an estoppel by convention that there should be a common assumption as to a state of affairs. If the plea of estoppel was to succeed the defendant needed to show that there was a common assumption, shared by the claimant and himself, that there was no agreement in terms of the 2006 letter. It was impossible to discern any such assumption. Later correspondence demonstrated only uncertainty as to the true position. Both parties at various stages asserted the existence of an agreement.
3. 3) Further, there must have been some detriment to the defendant or benefit to the claimant sufficient to make it unjust or unconscionable for her to assert the existence of the 2006 letter. This was not present on the facts of the case.
4. 4) The defendant’s refused to pay IHT due under the terms of the document amounted to breach of contract, and the claimant was entitled to damages for that breach.
5. 5) The defendant owed the claimant a duty to administer the estate promptly and a duty to protect and preserve the estate from loss, among other duties.
6. 6) The claimant could have no complaint about failure to assent the portfolio under November 2008. In December 2008 the claimant had specifically warned the defendant of the consequences of failure to transfer the portfolio. The allocation of responsibility for IHT in the 2006 Letter meant that the likelihood of the portfolio being needed to meet the IHT liability was substantially reduced. The defendant was in breach of his duty to protect the estate from loss during the period between 15 December 2008 and the same date in 2009.
7. 7) In the same period, he was also in breach of his duty to distribute bequeathed assets, although he would have been entitled to make a small retention (amounting to the maximum amount that the claimant could have been required to pay by way of additional inheritance tax) to cover the remote possibility that the claimant would be unable to fund that amount

JUDGMENT JOHN MARTIN QC [1] Edwin Lindsay Townsend (the deceased) died on 12 November 2004. He was survived by a daughter, the claimant, Fay Crabbe (Fay), and a son, the defendant, Edward Lindsay Townsend (Lindsay). [2] By his will, dated 17 September 2001, the deceased appointed Fay and Lindsay to be his executors and trustees; …

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