Analysis
The television presenter Jimmy Savile (the deceased) died on 29 October 2011. His estate had an approximate value of £3.3m after the deduction of various expenses incurred by the date of this hearing. By his will, the deceased appointed National Westminster Bank plc (the bank) to act as his personal representative. The deceased’s will makes gifts to a number of individual beneficiaries, one of which was the fifth defendant, the deceased’s niece, who was appointed to represent the interests of these individual beneficiaries (the individual beneficiaries). Thereafter the deceased’s residuary estate was bequeathed to the Jimmy Savile Charitable Trust (the trust).
Following a documentary broadcasted on 4 October 2012, in which the deceased was accused of having been a serial child abuser and sex offender, a large number of people had come forward to make claims that they were abused and consequently intimated personal injury claims against the deceased’s estate and against various third party defendants – the BBC, certain NHS hospital trusts and the charities Bernardo’s and Mind – which they contended were vicariously liable in tort. Should these intimated claims have been substantiated, there was a serious possibility that they would exhaust the assets remaining in the estate. However, the trust and the individual beneficiaries maintained that if these intimated claims were properly scrutinised a substantial part of the estate might have remained available for distribution to them pursuant to the deceased’s will.
Accordingly, the court was asked: (1) by the trustees of the trust, supported by the individual beneficiaries, to substitute the bank for a new professional executor pursuant to s50 of the Administration of Justice Act 1985; (2) by the bank (a) to determine whether a proposed scheme designed to assess and quickly and inexpensively resolve the personal injury claims intimated against the estate (the scheme) was a suitable proposal in the circumstances and (b) to ratify various expenses incurred by the bank in administrating the estate, including substantial legal expenses incurred in responding to the personal injury claims intimated.
The scheme provided for a set time-scale and procedure for the bank to consider whether to accept or reject any claim notified to the estate within 12 months from the date of the scheme’s advertisement, after which the estate would be distributed. It did not oblige anyone to settle a claim, but rather tried to achieve as much clarity as possible, as quickly as possible and at the least expense possible so as to enable the bank to make an application with good prospects of success for the court’s approval of payments to be made from the estate.
Held:
Dismissing the trust’s application to remove the bank as executor, approving the scheme and granting validation of the expenses sought by the bank –
- 1) It was lawful and reasonable, and in line with the judicial indication given to the bank at a previous hearing (reported at [2013] EWHC 770 (Ch)), that the bank assessed it should enter into the scheme in the complex and unusual situation which confronted the estate. The scheme itself was consistent with the proper administration of the estate: it was a sensible and pragmatic attempt at achieving a fair balance between scrutiny of the claims made, while minimising the costs of this exercise and seeking to maximise the distributable estate.
- 2) It would not have been appropriate for the court to have removed the bank as executor unless there was a real risk that it would not act fairly and conscientiously in that office or if the bank could not have be expected to continue to carry out the administration in an effective and proper manner. The trust and the individual beneficiaries failed to show that, in negotiating the scheme and in asking the court for approval to implement it, the bank had acted or would act in any way unreasonably or without fair and proper regard to the interests which ought to be taken into account in deciding how the estate should be administered. The fact that the bank was a neutral and impartial executor of good repute, that it was willing to act without charge, its track record in effectively negotiating with the personal injury claimants and third party defendants and the continued need for cooperation between these parties were strong indicators that the bank had and would continue to act appropriately. Moreover, friction between the bank and the trust and/or the individual beneficiaries was not on its own a sufficient reason for the bank’s replacement, particularly as no cooperation between these parties was necessary to operate the scheme or duly administer the estate.
- 3) It was appropriate to allow the expenses incurred in the ordinary course of the estate’s administration and to make a validation order for the purposes of the insolvency regime in relation to the legal expenses involved in dealing with intimated personal injury claims, disputes arising during the estate’s administration and with the scheme’s negotiation.
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