In Haastrup v Okorie [2016] EWHC 12 the English High Court held that a beneficiary was not entitled to sue on behalf of a deceased's estate where a personal representative had not been appointed. The Court noted that there are "special circumstances" in which a beneficiary can bring a claim on behalf of the estate against an alleged wrongdoer, but that these are very rare.

Instead, the Court advised that a beneficiary seeking to protect assets of an un-administered estate should apply to appoint a receiver pending grant of letters of administration, rather than commence proceedings himself.

The facts

The Claimant claimed to be the eldest son of the deceased, who died in England on 8 October 2012 (the "Deceased"). The First Defendant denied the Claimant's paternity (she was not his mother) and claimed to be the widow of the Deceased.

One aspect of the dispute between the Claimant and the Defendants related to the alleged misuse of a power of attorney executed in 2010 (the "Power").The Claimant issued proceedings relating to the alleged misuse of the Power by the First Defendant. The Claimant applied for orders including:

  1. the Power was void for lack of mental capacity when it was purportedly granted or alternatively;
  2. the Power was voidable for non-compliance with the English Mental Capacity Act 2005

(the "Claim").

There were a number of interlocutory applications made by both sides during the course of the proceedings. This particular judgment relates to two such interlocutory applications:

  1. An application by the First Defendant that the Claim be struck out, or alternatively, summary judgment be entered in her favour; and
  2. An application by the Claimant to be appointed as the personal representative of the Deceased's estate.

The Court held that both applications should be heard together.

Questions for the Court

The main focus of the judgment relates to the Claimant's application to strike out the proceedings. However, to adjudicate this application effectively, the Court had to consider whether the Claimant, as beneficiary of the estate, had any legal basis for bringing the Claim. The rest of this blog post focuses on the second question.

Judgment

The general rule

The general rule is that an action brought on behalf of a deceased's estate by a person as administrator, who at the date of the claim does not have a grant, is a nullity (per Ingall v Moran [1944]). The Court confirmed that the position is different where there is a will appointing an executor because the executor's title vests immediately on death and not on the grant of the letters of administration.

Special circumstances

The Claimant advanced the argument that a beneficiary should be able to bring a claim on behalf of the estate against an alleged wrongdoer (as he alleged the First Defendant to be) (per Roberts v Gill [2011]). It was argued that the absence of a personal representative is an exceptional circumstance in which the Claimant should be entitled to bring and continue these proceedings.

The Court noted that the "special circumstances" principle has been discussed in a number of recent English law authorities. The key question is whether the circumstances are sufficiently special to make it just for the beneficiary to have such a remedy. Examples of special circumstances might include where there is fraud on the part of the trustee or collusion between the trustee and a third party.

The Claimant alleged that the First Defendant was "plundering the estate" by using the Power and that this amounted to "special circumstances". In contrast, the First Defendant argued that the only issue was the lack of personal representative and that this did not amount to "special circumstances".

The Court held that the Claimant's allegations did not amount to "special circumstances" and the beneficiary should not be allowed to bring the Claim on behalf of the estate. The judge noted that the law "interposes the administration of an estate between death and distribution of the assets". This means that a personal representative is appointed to get in, administer and pay debts, protect the beneficiaries and then distribute the assets. The Court held that it should not allow a beneficiary to bring legal action to "protect" the estate in every case where a personal representative is not appointed as this would cause "confusion, duplication of effort, infighting, a lack of supervision and waste of resources".

The judge noted that the correct course of action to protect an estate where there is no personal representative is to apply for the appointment of a receiver pending grant of letters of administration [per Ingall v Moran].

Decision

The Court held that the Claimant, not being or being appointed a personal representative of the Deceased, had no right to bring the Claim as beneficiary of an un-administered estate.

Learning points

It is only in rare circumstances that a beneficiary will be able to bring a claim on behalf of an un-administered estate. Instead it is the personal representative who has a key role in protecting both the assets and beneficiaries of the estate.

The Court advised that a beneficiary seeking to protect assets of an un-administered estate should apply to appoint a receiver pending grant of letters of administration, rather than commence proceedings himself.