An Executor or Administrator (“Personal Representative”) is bound to administer a deceased person’s estate according to the Will or otherwise, according to Law. However Personal Representatives are frequently provided discretion as to how the deceased person’s estate is distributed (for example, where a Will creates a Discretionary Testamentary Trust) and in exercising those discretions, beneficiaries and creditors of an estate may be affected and potentially, may seek to challenge the Personal Representative’s Appointment.
Only the Supreme Court of Queensland has power to remove a Personal Representative or a Trustee, in certain circumstances. The Court’s power extends to appointing replacement Administrators and Trustees, to revoke any Grant of Probate of a Will, and to remove an Executor before or after a Grant of Probate issues. As a general statement, the Court’s exercise of its discretion to make any Order in the above terms is dependent upon whether it considers it “necessary”, “convenient” or “expedient” or where it would be “impracticable” not to do so. The Court’s discretion therefore is very broad.
The Court’s decision to remove a Personal Representative or Trustee will always involve an assessment of the facts of the case, and the Court’s evaluation of these. The most common circumstances where Applications are made involve:-
(a) Where a Personal Representative is or becomes physically or mentally incapable of administrating the Estate. On proof of incapacity, the Court will generally direct the revocation of any Grant of Probate in favour of the Personal Representative. Rule 642(1) of the Uniform Civil Procedure Rules 1999 applies to a Personal Representative who is “incapable of acting”. That provision could apply to a range of circumstances beyond physical incapacity and that consideration applies equally to Trustees. Ultimately, the question for the Court must be whether the “due and proper
administration of the estate is in jeopardy”. The “Due and proper administration of the Estate” is not limited to mismanagement or
other conduct of the Personal Representative causing financial detriment to
beneficiaries and creditors of the Estate. Mere friction or poor communication between the Executors and Beneficiaries is not necessarily sufficient. However, Executors who are dilatory, uncommunicative, or who fail to work co-operatively with their CoExecutors are at risk of being removed by the Court’s Order;
(b) Allegations of maladministration by a Personal Representative;
(c) Conflict of interest (for example issues may arise as to whether an Executor can administer the Estate in the best interests of all beneficiaries and creditors to the exclusion of his or her own interests) or where the Executor has a claim against the deceased estate (for example, a Family Provision Claim);
(d) Character or past conduct (where the Court is asked to remove an Executor on the basis of an unacceptable risk profile i.e. that the Executor is not suitable to administer the Estate);
(e) What may be termed relationship breakdown (where the due administration of the Estate is at risk). A common example of this is where joint Executors are appointed and they cannot agree on how to advance the administration or the Estate is being unnecessarily depleted by legal fees).
epending on the evidence, as assessed by the Court, the Court may “pass over” one of the Executors or perhaps remove both Executors and appoint someone independent (a Court Appointed Administrator).
As with all litigation the outcome of, each case will depend on an effective presentation of known facts. In the event that an Application to Court is necessary (all other options involving negotiation and mediation having been exhausted or not considered likely to resolve the matters in dispute), the legal costs of bringing the proceeding will need to be considered. Though the Court has an overriding discretion to order costs, the usual order is that costs follow the event i.e. the party that succeeds in obtaining the order or in defending the Application will usually be awarded costs on either the Standard or indemnity basis. The Court has a wide discretion in making Orders for the due administration of the Estate pursuant to Section 6 of the Succession Act 1981. With that in mind, any Application to the Court may provide for alternate Directions and Orders (in the event the Court refuses to make some of the orders applied for), to minimise the prospect of further litigation (and further legal costs associated with this) and advance the orderly administration of the Estate. The content of this article is not intended to constitute advice regarding an individual’s personal circumstances.
Should you require advice regarding a deceased estate in which you have been appointed Personal Representative or you are a Trustee or you are, in conflict with your Co-Trustee or Co-Personal Representative, we can provide effective and timely advice regarding your options.
If you have already received legal advice from another lawyer regarding your circumstances and require a second opinion, our experienced lawyers in our Litigation Section would be pleased to assist you.
Wonderley & Hall