![]() |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE] | |||||||||
England and Wales High Court (Chancery Division) Decisions |
||||||||||
|
THE FUTURE OF BAILII DEPENDS ON USERS LIKE YOU
If you want to be able to use BAILII in the future, please consider making a donation to celebrate BAILII's 25 years of providing free access to law.
Your donation, no matter the size, will help BAILII maintain the legal databases that you and many other users rely on. If every visitor this month gives just £5, it will have a significant impact on BAILII's ability to continue providing this vital service.
| ||||||||||
|
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> National Westminster Bank Plc v Lucas & Ors [2014] EWHC 653 (Ch) (11 March 2014) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2014/653.html Cite as: [2014] EWHC 653 (Ch) |
||||||||||
[New search]
[Context
]
[View without highlighting]
[Printable RTF version]
[Help]
CHANCERY DIVISION
Strand, London, WC2A 2LL |
||
B e f o r e :
SALES
____________________
IN THE MATTER OF THE ADMINISTRATION OF THE ESTATE OF JIMMY SAVILE![]() National Westminster Bank plc |
Claimant |
|
| - and - |
||
| Luke Lucas Roger Bodley P1 Denise Coles Amanda McKenna Secretary of State for Health BBC |
Defendants |
____________________
Teresa Rosen Peacocke (instructed by PWT Advice LLP) for the Trustees
Piers Feltham, Justin Levinson & Elizabeth Gumbel QC (instructed by Slater & Gordon (UK) LLP) for the 3rd & 4th Defendants
Andrew Cosedge (instructed by PWT Advice LLP) for the 5th Defendant
Neil Block QC (instructed by Capsticks LLP) for the 6th Defendant
Andrew Warnock QC & Andrew Spencer (instructed by DAC Beachcroft LLP) for the 7th Defendant
Hearing dates: 24/2/14-26/2/14
____________________
Crown Copyright ©
Mr Justice
Sales
:
Introduction
Savile
, the television presenter. Jimmy
Savile
died on 29 October 2011. The current value of his estate, after allowing for a range of expenses that have been incurred, is about £3.3 million.
Savile
left a will. The executor of the will and Jimmy
Savile
's personal representative is National Westminster Bank plc ("the Bank").
Savile
's niece and next-of-kin. Mrs McKenna has now been appointed to represent the interests of the individual beneficiaries in these proceedings. Under the will, the residue of Jimmy
Savile
's estate is left to the Jimmy
Savile
Charitable Trust ("the Trust").
Savile
of being a serial child abuser and sex offender. As a result of that programme and the publicity and further investigations into Jimmy
Savile
's activities which followed, a large number of people have come forward to make claims that they were abused by Jimmy
Savile
.
Savile
and his estate in relation to such abuse ("the PI Claimants"). Some of the PI Claimants have also indicated that they have claims against other defendants with whom Jimmy
Savile
was associated: the BBC, certain NHS hospital trusts and the charities Barnardo's and Mind (I refer to these as "the Third Party Defendants"). The great majority of the PI Claimants are now represented by Slater & Gordon solicitors (having previously been represented by the firms of Russell, Jones and Walker and Pannone).
Savile
in place of the Bank, "on the grounds (inter alia) that the Bank's failure to act in the interests or for the benefit of the beneficiaries [i.e. including the Trust], the breakdown of the Bank's relationship with [the Trust] … based on the mode in which the estate is being administered and caused by substantial overcharges claimed against the estate, prevents the trusts of the estate being properly and expeditiously executed." The individual beneficiaries support this application. The Bank, the PI Claimants and Third Party Defendants oppose it.
Savile
's estate ("the Scheme") is a suitable mechanism by which the personal injury claims that have been and may in future be made against the estate can be dealt with and (ii) ratification by the court under section 284(1) of the Insolvency Act 1986 of various expenses incurred by the Bank in the course of executing the will and administering the estate, including substantial legal expenses which have been incurred. The request for approval of the Scheme is supported by the PI Claimants and the Third Party Defendants. The Bank's applications are opposed by the Trust and the individual beneficiaries.
Factual Background
Savile
, the Bank issued an advertisement in the usual way under section 27 of the Trustee Act 1925 in a local newspaper and the London Gazette calling for claims in relation to Jimmy
Savile
and the estate to be notified to it by 13 March 2012.
Savile
's estate, as has happened.
Savile
, including certain NHS hospital trusts (represented in negotiations and before me by the Secretary of State for Health), the BBC and the charities Barnardo's and Mind. To the extent that such claims are substantiated, the Third Party Defendants will have claims over against Jimmy
Savile
's estate for an indemnity.
Savile
when he died. The remaining matter to be sorted out before the estate is wound up and the remaining funds distributed is the resolution of the extent of liabilities in respect of the personal injury claims referred to above. In that regard, enough has been said about the complexities of the situation to indicate the difficult task which the Bank has had to carry out as executor of the will and personal representative, balancing the interests of all those with claims or potential claims to the fund in its hands.
"I would encourage everyone here to be as imaginative as possible in terms of trying to work out sensible ways in which the claims can both be scrutinised, but also dealt with at a minimum of expense in terms of advisors' fees on all sides. I think it is important that, although the estate is significant, it is not hugely valuable when set against the possible claims which may be brought against it. I am very concerned … that it not be swallowed up, in effect, in advisors' fees and legal fees going forward."
compensation
and the provisions for recovery of costs which it sets out, in the interests of trying to achieve speedy resolutions and payments at least cost. The Third Party Defendants also made significant concessions in order to achieve an agreed Scheme, as did the Bank.
"Your suggestion of joining one party only to represent all those who have asserted claims or potential claims is preposterous. All parties with a legitimate interest should be able to participate in the hearing, at which all issues will be considered."
The Scheme
Savile
will have a choice whether to make an application under the Scheme and will also have a choice whether or not to agree to settle their claims on the terms recommended as a result of operation of the Scheme. They will not be obliged to settle at that level.
Savile
's estate fair notice that they might in practice lose the opportunity to make claims against the estate after a certain period of time, after which it is proposed that the Bank will apply for the sanction of the court to make payments out of the estate and to wind up the estate, leaving no further money to meet later claims. I am satisfied that the form of the proposed advertisement as finally agreed is appropriate. It is in terms which will give fair warning that it is intended that the estate will be fully paid out within a year after the date of the advertisement or as soon as possible thereafter and it will contain an explicit warning that if notice is not given of a claim before such distribution, all right to recover from the estate will be lost.
The relevant law
"But in cases of positive misconduct, Courts of Equity have no difficulty in interposing to remove trustees who have abused their trust; it is not indeed every mistake or neglect of duty, or inaccuracy of conduct of trustees, which will induce Courts of Equity to adopt such a course. But the acts or omissions must be such as to endanger the trust property or to shew a want of honesty, or a want of proper capacity to execute the duties, or a want of reasonable fidelity."
"It seems to their Lordships that the jurisdiction which a Court of Equity has no difficulty in exercising under the circumstances indicated by Story is merely ancillary to its principal duty, to see that the trusts are properly executed. This duty is constantly being performed by the substitution of new trustees in the place of original trustees for a variety of reasons in non-contentious cases. And therefore, though it should appear that the charges of misconduct were either not made out, or were greatly exaggerated, so that the trustee was justified in resisting them, and the Court might consider that in awarding costs, yet if satisfied that the continuance of the trustee would prevent the trusts being properly executed, the trustee might be removed. It must always be borne in mind that trustees exist for the benefit of those to whom the creator of the trust has given the trust estate.
The reason why there is so little to be found in the books on this subject is probably that suggested by Mr. Davey in his argument. As soon as all questions of character are as far settled as the nature of the case admits, if it appears clear that the continuance of the trustee would be detrimental to the execution of the trusts, even if for no other reason than that human infirmity would prevent those beneficially interested, or those who act for them, from working in harmony with the trustee, and if there is no reason to the contrary from the intentions of the framer of the trust to give this trustee a benefit or otherwise, the trustee is always advised by his own counsel to resign, and does so. If, without any reasonable ground, he refused to do so, it seems to their Lordships that the Court might think it proper to remove him; but cases involving the necessity of deciding this, if they ever arise, do so without getting reported. It is to be lamented that the case was not considered in this light by the parties in the Court below, for, as far as their Lordships can see, the Board would have little or no profit from continuing to be trustees, and as such coming into continual conflict with the appellant and her legal advisers, and would probably have been glad to resign, and get out of an onerous and disagreeable position. But the case was not so treated.
In exercising so delicate a jurisdiction as that of removing trustees, their Lordships do not venture to lay down any general rule beyond the very broad principle above enunciated, that their main guide must be the welfare of the beneficiaries. Probably it is not possible to lay down any more definite rule in a matter so essentially dependent on details often of great nicety. But they proceed to look carefully into the circumstances of the case."
Savile
's estate. I accept the submission of Mr Cunningham, for the Bank, and of Mr Feltham, for the PI Claimants, that proper execution of the Bank's obligations - what, in the context of Letterstedt, Lord Blackburn called the proper execution of the trusts - in the circumstances of this case requires the Bank to have regard not only to the interests of those claiming under Jimmy
Savile
's will (the individual beneficiaries and the Trust) but also to the interests of those among the PI Claimants, possible future claimants and the Third Party Defendants who may have meritorious claims against his estate. If personal injury claimants or Third Party Defendants have meritorious claims against the estate, the proper fulfilment of the executor's role is to see that such claims are paid out of the estate before making any distribution under the terms of the will. On the material available to the Bank and before the court, the assessment can properly be made that there are likely to be at least some meritorious claims. That is not a possibility that can be discounted on the basis that the claims all appear to be weak or without substance.
"It is one thing to adopt tactics of that kind in ordinary commercial litigation, but different considerations apply where one is dealing with money that should be held on trust for the general body of creditors and beneficiaries of an insolvent estate. In taking the approach he did, in my view, [the person administering the estate] misunderstood completely what his obligations were. From the point when he realised, or ought to have realised, that the estate was insolvent it was no longer acceptable to engage in horse trading with one of the creditors of that estate. His obligation was to ensure that each creditor of the estate received that to which it was entitled under the statutory regime. He was under no obligation to see that Lloyd's got anything more than it was entitled to, but he had no business trying to ensure that Lloyd's claims were dealt with other than fairly, that is to say rateably …".
"But though their Lordships acquit the Board [the trustees] of concealment in these accounts, the spirit which permits such charges is naturally offensive to the appellant and unfair towards the trust estate. They can only be made by persons who are themselves exasperated by the course pursued towards them, and determined to try somehow or other to get remuneration of which they conceive themselves to have been unjustly deprived. The making of such charges, and the vexatious course pursued by the Board in opposing the perfectly reasonable inquiry which the plaintiff asked before the referee, are calculated to introduce additional irritation into a relation which was disturbed enough before. And they have an important bearing on the question whether, in view of the future welfare of the trust estate, it is expedient that the Board should remain trustees.
It is quite true that friction or hostility between trustees and the immediate possessor of the trust estate is not of itself a reason for the removal of the trustees. But where the hostility is grounded on the mode in which the trust has been administered, where it has been caused wholly or partially by substantial overcharges against the trust estate, it is certainly not to be disregarded.
Looking therefore at the whole circumstances of this very peculiar case, the complete change of position, the unfortunate hostility that has arisen, and the difficult and delicate duties that may yet have to be performed, their Lordships can come to no other conclusion than that it is necessary, for the welfare of the beneficiaries, that the Board should no longer be trustees. Probably if it had been put in this way below they would have consented. But for the benefit of the trust they should cease to be trustees, whether they consent or not."
i) The Bank is a professional executor of good repute which is capable of being neutral and impartial in administering the estate as between the different competing interests and, on any fair view, of being seen to be impartial. It was not appointed by either of the main contending groups, the personal injury claimants or the beneficiaries under the will. By contrast, if PennTrust were appointed in the Bank's place, there is a significant risk that it would be perceived by the personal injury claimants as the candidate put forward by the opposing group and as potentially less than completely neutral, which would in itself pose a risk of greater disruption and argument – with all the additional cost of dealing with that – in carrying through the administration of the estate. Generally, the court will be slow to remove an executor and personal representative just because one group claiming against the estate is disappointed and disaffected as a result of reasonable decisions the executor has made in an effort in good faith to strike a fair balance between competing interests;
ii) The Bank has said that it is willing to act without charging the estate, which will assist in safeguarding funds for eventual distribution from the estate. By contrast, although PennTrust has indicated that it is willing to "read in" for taking over the executor-ship without charge, it appears it does propose to charge for its services as executor thereafter;
iii) By negotiating with the PI Claimants and Third Party Defendants to the successful conclusion of getting agreement on the Scheme, which offers a sensible way forward for handling the various personal injury claims, the Bank has established a track record of effective and appropriate administration of the estate in the unusual and testing circumstances of this case. There seems little justification for the court to impose a new executor on the estate, with the risk that would involve that the new executor might not be so effective in dealing with the situation going forward;
iv) The negotiation of the Scheme has required a good deal of give and take between the parties to the negotiations, in the course of which the PI Claimants and the Third Party Defendants have developed confidence in the fair approach of the Bank to handling the claims. The Scheme provides a general framework, but its effective implementation in seeking to arrive at as many settlements of valid and meritorious claims as possible, to facilitate ultimate distributions from the estate, will also depend on effective co-operation between the parties going forward. In my view, it is strongly in the interests of the due and effective administration of the estate that the Bank should remain in place to carry through the implementation of the Scheme, rather than run the risk of severe disruption of such implementation by replacing the Bank with the Trust's proposed executor, PennTrust, which has not developed equivalent working relationships with claimants.
Savile
, had himself chosen the Bank to be executor. I can see that in some cases the choice of the testator might be a significant factor to be brought into account, for instance where a testator has chosen a family member to be executor and can be presumed to have chosen them because of an assessment that they are fair-minded, dependable and in possession of a good understanding of the family context. But in the present case, I do not think that the fact that Jimmy
Savile
chose the Bank to be executor is a matter which in itself carries significant weight. Of far greater importance are the factors discussed above.
The particular grounds for removal of the Bank put forward by the Trust
Savile
or after the hearing on 20 February 2013 to advertise for those who wished to make personal injury claims to come forward within a limited time, with a view to cutting off other claims made after that date. As I understood this complaint (despite Mrs Peacocke at another point in her submissions disavowing reliance on the section 1287 of Story's Equity Jurisprudence as cited in Letterstedt), it was a contention that the Bank had failed properly to carry out its duties as executor to limit the number of claims which might be brought against the estate, with a view to preserving as much of the estate as possible for those claiming under the will and allowing an early distribution of the estate.
Savile
's death, in the usual way. The situation which arose after the television programme in October 2012 was new and complex. The Bank was entitled to take time to work out how to proceed, rather than rushing forward with placement of a new advertisement in an attempt to cut off some claims. There was massive publicity, so it was not necessary to place an advertisement to alert individuals who might have been affected by Jimmy
Savile
's activities to the fact that they might have claims against his estate. The Bank was entitled to explore with the PI Claimants who did come forward how their and others' claims might best be dealt with, and in that context was entitled to discuss and seek to agree a timetable to advertise for further claims to be brought forward before the estate assets were finally distributed. This was another area where the Bank had to strike a balance between competing interests, between the interest of those with potentially meritorious claims against the estate to have a full and fair opportunity to consider their position and to make a claim before the estate is distributed and the interest of those who have entitlements in respect of the estate to be paid out reasonably promptly. It is not possible to say that the Bank has acted unreasonably or in breach of duty by first acting to agree the Scheme and then arranging, as will be done, for a further advertisement to be placed as described above.
Savile
's estate into the future. I had reservations about whether it was appropriate to include such a provision in the Scheme, which I raised. Counsel for the PI Claimants explained that all that was intended was that the limitation on costs recoverable by the PI Claimants in relation to claims made under the Scheme should not preclude the possibility of them seeking further payment of costs from the estate in relation to participation in the Chancery proceedings, should any such payment be found by the court to be appropriate. It was a simple matter to re-draft clause 7(1)(b) to achieve this effect more clearly and in appropriate terms, and this was agreed by those supporting the Bank's application for approval of the Scheme.
Savile's will and as his personal representative.
The Bank's application for approval of the Scheme
The Bank's application for validation and sanction of expenses incurred in the administration of the estate
Conclusion