The case of Long v Rodman  EWHC 753 (Ch) is a cautionary tale on how not to remove an estate executor. The High Court criticised the behaviour of all the parties and ordered that none of them were entitled to recover their legal costs.
Mr Rodman (“the Deceased”) died in 2008. At the time of his death his estate was worth approximately US$ 134 million, consisting mostly of investments managed through a complex network of offshore companies. He was survived by his four daughters, the Defendants in this case.
The Claimant was Mr Long, the administrator of the Deceased’s estate. As administrator, he was tasked with unwinding this complicated estate and distributing the Deceased’s wealth according to the terms of the Will. In 2018 the Claimant asked the Court for directions to how to manage the estate. Shortly after, two of the Defendants applied to the Court to remove the Claimant as administrator. Their application relied on evidence that the Claimant had made mistakes in relation to US tax and had spent over £6 million by mismanaging the estate.
The case was unusual from the start because most of the estate administration work had already been done. Typically, beneficiaries only seek to remove administrators (or executors) if they have failed to make substantial progress collecting in and distributing the assets. Here, everybody already agreed on what needed to be done to wind up the estate. Nonetheless, the two sisters who brought the removal application insisted that they be appointed to manage the estate instead of the Claimant.
Just as unusual was how the Claimant reacted. It is usually advisable for professional administrators to stop acting when the beneficiaries ask them to step down. There had been a clear breakdown in the relationship between the parties and one would normally expect that the Claimant would have welcomed any excuse to walk away. Strangely, the Claimant instead chose to dig his heels and fight. By the time the case was heard by the High Court, the Claimant had spent nearly £174,000 on legal fees and the Defendants had spent a staggering £622,000.
Shortly before the hearing, the two sisters seeking to remove the Claimant suggested that a neutral solicitor, Mr Pintus, be appointed to administer the estate jointly with them. Then, in his closing submissions to the Court, the barrister acting for the sisters suggested that Mr Pintus could be appointed on his own to replace the Claimant.
In the end, this is exactly what the Court decided to do. First, the Court found that the Claimant should be removed. It held that “[i]t is not the role of the court on hearing an application under section 50 [of the Administration of Justice Act 1985] necessarily to make findings of wrongdoing. It is clear however, that where the beneficiaries are able to make out complaints that warrant further investigation, the continued tenure of the administrator becomes untenable unless the complaints are trivial. It seems to me that the issues in the letter [from the Defendants’ solicitors] meet that threshold requirement. They are certainly not trivial complaints and they place Mr Long in a position in which he has conflicts of interest that make it inappropriate for him to remain in office.” However, the Court also had concerns about appointing the two sisters to manage the estate. Instead, it preferred to appoint Mr Pintus because he was suitably experienced and beyond reproach.
This case is a particularly important case study because the Court made no secret that it was unhappy with the inflexible way in which the parties approached the case. It chose to penalise the parties for their behaviour by refusing to allow either party to recover their legal costs, be it from the estate or from each other ( EWHC 2451 (Ch)). Chief Master Marsh stated that “[b]oth parties have adopted unrealistic positions and their approach to the conduct of the application has been criticised in the judgment. Issues of conduct in this case are of very real significance.” The errors they made included making the removal application at short notice, taking an inappropriate approach to the evidence, and developing their claim as it went along (to the point that they failed to suggest that a neutral solicitor replace the Claimant until the very last moments of a 3-day trial). The Claimant’s behaviour was so unreasonable that he was denied the right to recover his legal costs from the estate, even though this right is almost always allowed.
The case reaffirms that all parties should approach litigation with an open mind and with a view to resolving matters pragmatically. If they do not, they risk being ordered to pay hundreds of thousands of pounds out of their own pockets. Or, as the Court put it: “I think it can be fairly said that the manner in which this s. 50 application was conducted on both sides was an object lesson in how not to pursue such an application.”
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