A recent example of the High Court holding an executor in contempt for not complying with their duties

The High Court has recently found that an executor was in contempt of court and sentenced him to a 4-month custodial sentence. The executor had failed to comply with a court order which had the effect of keeping the beneficiaries out of their share of the estate for almost three years.

The judgments in Totton & Anor v Totton [2022] EWHC 2304 (Ch) and Totton & Anor v Totton [2022] EWHC 2345 (Ch) provide a sobering reminder of the importance for executors to comply with Court Orders and their duties. In particular, ensuring that executors (i) engage with information requests from beneficiaries, (ii) administer and distribute the deceased's estate in accordance with the terms of the will, and (iii) comply with the directions of the Court.

Background

Hollie Totton and Daniel Washer (the "Claimants") are the grandchildren of Hazel Totton (the "Deceased"). Mark Totton (the "Executor") is the defendant and is the uncle of the Claimants he is the sole executor and trustee of the estate.

The Deceased died on 25 July 2019.  By her will dated 30 January 2017 she left three legacies of £10,000 each and after payment of those legacies, the estate was to be divided with 50% passing to the Executor and the other 50% passing to the Claimants.

On 27 November 2019 a grant of probate was issued to the Executor. The property which formed the bulk of the estate was sold for £425,000 on 7 April 2020.

The Claimants wished to terminate the trust and receive their share of the estate. The Claimants wrote to the Executor on multiple occasions to request information (to which he did not respond) and then, afterwards, they wrote to him further asking that he administer and distribute the estate, again the Executor did not respond.. The Claimants then brought a claim on 12 April 2021 under CPR Part 64.2 for a full inventory of the Deceased's estate, its distribution for the trust to be brought to an end or, alternatively, for the Executor to be removed and the First Claimant to be appointed as the new trustee and for an injunction to restrain the Executor from distributing or dissipating the estate pending resolution of the dispute.

On 10 March 2022, Meade J granted a freezing injunction in favour of the Claimants restraining the Executor from distributing or dissipating the estate pending resolution of the dispute. The relevant parts of Meade J's order are as follows:

"7. Unless paragraph 8 applies, the respondent must, within one week of service of this order and to the best of his ability, inform the applicant's solicitors of all the assets from the estate of the late Hazel Margaret Totton, giving the value, location and details of all such assets.

8. If the provision of any of this information is likely to incriminate the respondent, he may be entitled to refuse to provide it, but it is recommended to take legal advice before refusing to provide the information. Wrongful refusal to provide the information is contempt of court and may render the respondent liable to be imprisoned, fined or to have his assets seized.
9. Within three weeks after being served with this order, the respondent must swear and serve on the applicants' solicitors, an affidavit setting out the above information at paragraph 7 in addition to a full inventory of the estate of Hazel Margaret Totton, an up to date account of the administration of the estate and an account in full of the respondent's dealings with the estate."

The Executor did not comply paragraphs 7 and 9 of this order and the Claimants brought a committal application on 5 July 2022.

Judgment

The Judge found the Executor was in breach of paragraphs 7 and 9 of the order and consequently was in contempt of court. This was not a controversial finding and is something the Executor agreed with and remarked that he had had buried his head in the sand and received a number of envelopes which he just left unopened. The question then became what sanction would be imposed upon the Executor for failing to comply with the order.

In determining the Executor's sentence for contempt of court, the Judge referred to Solicitors Regulation Authority Ltd v Khan [2022] EWHC 45 (Ch) and Law House Ltd (In Administration) v Adams [2020] EWHC 2344 (Ch).

The Judge found that 4 months was justified for the breach by the Executor on the basis that:

1. The Claimants suffered significant prejudice as a result of the Executor's conduct as they were kept out of their share of the estate for almost three years and two years after the principal asset was sold.
2. The Executor had not acted under pressure from third parties to breach the order and was solely responsible for the breaches.
3. The breach of the order was deliberate and the Executor did nothing to comply with the order, thus making his breach serious.
4. The Executor's failure to engage with the legal process demonstrated a high level of culpability.
5. There was no mitigation by the Executor and no cooperation with the Claimants.

Notwithstanding the above, the Judge was willing to suspend the sentence and give the Executor one final chance to comply with the order provided he did so by a certain date.

Conclusion

The role of an Executor can be an onerous one. The imposition of a prison sentence on an Executor where they have failed to administer an estate may seem like a drastic step, but the law provides for these consequences in circumstances such as those in this case. It was the failure to comply with a Court Order rather than simply breaching their duties which led to the prison sentence. It goes without saying that failing to comply with Court Orders can have very severe consequences.