Littlewood v Morley [2015] CHP 66

Analysis

L applied pursuant to s8(1) of the Administration of Estates Act 1990 to remove M as her co-executor and co-trustee of the estate of their father. The beneficiaries of the estate were L (50 percent) and M’s two children (50 percent). The estate was modest including some personal chattels, a small bank account and a property worth circa £210,000.

M and his wife had issued a claim against the estate for £170,229, allegedly owed for nursing care provided to the deceased (the litigation).

L averred that M should be removed as trustee due to the ligation producing a clear conflict of interest, M being both claimant and defendant. M resisted the application averring that any perceived conflict could be managed. M’s children opposed the application.

The court held, allowing the application:

1. 1. When determining such applications the importance of the welfare of the beneficiaries was key (at [12]-[14]).
2. 2. Where a situation arises during the continuance of a trust where one of the trustees might be considered to have a conflict of interest, it does not necessarily or usually follow that he must resign as a trustee [20]. The determination of an application for removal will depend upon the background facts and context. An executor or trustee need not automatically resign merely because he is also a beneficiary or is obliged to determine certain claims against the estate (at [20] and [21]).
3. 3. However, in this case, because of the nature of the litigation there was no satisfactory mechanism to deal with the conflict in which M had been placed. The claim by M was a substantial one where the issue of disclosure of relevant documentation and the veracity of the witnesses were more than usually likely to be contentious and it would, if successful, account for a very substantial part of the entire estate. All sorts of procedural issues which might arise from M being on both sides of the litigation could be foreseen for example disclosure. Consequently M should be removed leaving L as sole executor and trustee (at [22]-[24]).

JUDGMENT DEEMSTER CORLETT [1] This judgment concerns an application by Susan Ann Littlewood (represented by Mr Bridson) to remove her co-executor and co-trustee John Lloyd Morley (represented by Miss Dugdale). [2] The application is dated 20 February 2015 and is made pursuant to s8(1) of the Administration of Estates Act 1990 which provides as follows- …

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