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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> The Thomas and Agnes Carvel Foundation v Carvel & Anor [2007] EWHC 1314 (Ch) (11 June 2007) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2007/1314.html Cite as: [2008] Ch 395, [2007] EWHC 1314 (Ch), [2008] 2 WLR 1234, [2007] 4 All ER 81 |
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CHANCERY DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
THE THOMAS AND AGNES CARVEL FOUNDATION |
Claimant |
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- and - |
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(1) PAMELA CARVEL (2) CARVEL FOUNDATION, INC. |
Defendants |
____________________
Mr Michael Gibbon (instructed by Penningtons) for the First Defendant
Mr Jeremy Dable for the Second Defendant
Hearing dates: 23, 24 May 2007
____________________
Crown Copyright ©
Mr Justice Lewison :
Introduction. | 1 |
The underlying facts. | 3 |
The law. | 18 |
Jurisdiction. | 18 |
Discretion. | 43 |
Application to set aside. | 56 |
Introduction
The underlying facts
(1) the deceased died domiciled in the United Kingdom;
(2) the value of that person's estate was wholly attributable to property passing under his will or intestacy (or under a nomination taking effect on death or by survivorship);
(3) not more than £50,000 represented value attributable to property situated outside the jurisdiction; and
(4) the gross value of the estate (including chargeable transfers) did not exceed £200,000.
i) Sums which Pamela said she had incurred on behalf of Agnes during her lifetime;
ii) Debts which Agnes had contracted but had not paid; and
iii) Sums which Pamela had incurred as Agnes' personal representative and in respect of which she claimed to be entitled to indemnity from the estate.
The law
Jurisdiction
"(1) Where an application relating to the estate of a deceased person is made to the High Court under this subsection by or on behalf of a personal representative of the deceased or a beneficiary of the estate, the court may in its discretion—
(a) appoint a person (in this section called a substituted personal representative) to act as personal representative of the deceased in place of the existing personal representative or representatives of the deceased or any of them; or
(b) if there are two or more existing personal representatives of the deceased, terminate the appointment of one or more, but not all, of those persons.
…
(4) Where an application relating to the estate of a deceased person is made to the court under subsection (1), the court may, if it thinks fit, proceed as if the application were, or included, an application for the appointment under the Judicial Trustees Act 1896 of a judicial trustee in relation to that estate.
(5) In this section "beneficiary", in relation to the estate of a deceased person, means a person who under the will of the deceased or under the law relating to intestacy is beneficially interested in the estate."
"(1) Where application is made to the court by or on behalf of the person creating or intending to create a trust, or by or on behalf of a trustee or beneficiary, the court may, in its discretion, appoint a person (in this Act called a judicial trustee) to be a trustee of that trust, either jointly with any other person or as sole trustee, and, if sufficient cause is shown, in place of all or any existing trustees.
(2) The administration of the property of a deceased person, whether a testator or intestate, shall be a trust, and the executor or administrator a trustee, within the meaning of this Act.
…
(7) Where an application relating to the estate of a deceased person is made to the court under this section, the court may, if it thinks fit, proceed as if the application were, or included, an application under section 50 of the Administration of Justice Act 1985 (power of High Court to appoint substitute for, or to remove, personal representative)."
"The instrument itself is the evidence of the agreement; and he, that dies first, does by his death carry the agreement on his part into execution. If the other then refuses, he is guilty of a fraud, can never unbind himself, and becomes a trustee of course. For no man shall deceive another to his prejudice. By engaging to do something that is in his power, he is made a trustee for the performance, and transmits that trust to those that claim under him."
"To my mind Dufour v. Pereira decides that where there is a joint will such as this, on the death of the first testator the position as regards that part of the property which belongs to the survivor is that the survivor will be treated in this Court as holding the property on trust to apply it so as to carry out the effect of the joint will. As I read Lord Camden's judgment in Dufour v. Pereira that would be so, even though the survivor did not signify his election to give effect to the will by taking benefits under it. But in any case it is clear that Lord Camden has decided that if the survivor takes a benefit conferred on him by the joint will he will be treated as a trustee in this Court, and he will not be allowed to do anything inconsistent with the provisions of the joint will."
"Any will which the surviving testator may make to replace the first will will be valid. The agreement cannot make the first will irrevocable. His personal representative will, however, take the property subject to the trust arising under the prior agreement."
"A trust is an equitable obligation, binding a person (who is called a trustee) to deal with property over which he has control (which is called the trust property) for the benefit of persons (who are called the beneficiaries or cestuis que trusts), of whom he may himself be one, and any one of whom may enforce the obligation."
"The Foundation is correct that agreements, such as the Reciprocal Agreement, are enforceable in equity. It is also correct that the Court may not set up Agnes' 1988 or 1990 will as her last will and testament. However, the Foundation's contention that the equitable remedy for breach of the Reciprocal Agreement is to deem it a creditor of Agnes' estate is correct only to the extent of Agnes' residuary estate. The proper remedy is an order directing the fiduciary to perform the obligation which the testator had assumed. Agnes' obligation under the Reciprocal Agreement was to name the Foundation as the residuary beneficiary of her estate. Accordingly the Foundation's remedy is to receive the residue of Agnes' estate. This was the relief accorded in [an earlier case] where the beneficiaries under the decedent's later will were deemed to hold half of her estate as a resulting trust in favor of the husband's relatives – those who, though the beneficiaries of the joint will, were cut out by the wife's later will."
"Second, it seems to me that the substratum of the doctrine is that a man ought not to be allowed to litigate a second time what has already been decided between himself and the other party to the litigation. This is in the interest both of the successful party and of the public. But I cannot see that this provides any basis for a successful defendant to say that the successful defence is a bar to the plaintiff suing some third party, or for that third party to say that the successful defence prevents the plaintiff from suing him, unless there is a sufficient degree of identity between the successful defendant and the third party. I do not say that one must be the alter ego of the other: but it does seem to me that, having due regard to the subject matter of the dispute, there must be a sufficient degree of identification between the two to make it just to hold that the decision to which one was party should be binding in proceedings to which the other is party. It is in that sense that I would regard the phrase 'privity of interest.' "
"There is a practice in this court, by which any person having an interest may make himself a party to the suit by intervening; and it was because of the existence of that practice that the judges of the Prerogative Court held, that if a person, knowing what was passing, was content to stand by and see his battle fought by somebody else in the same interest, he should be bound by the result, and not be allowed to re-open the case. That principle is founded on justice and common sense, and is acted upon in courts of equity, where, if the persons interested are too numerous to be all made parties to the suit, one or two of the class are allowed to represent them; and if it appears to the court that everything has been done bona fide in the interests of the parties seeking to disturb the arrangement, it will not allow the matter to be re-opened."
Discretion
"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."
"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 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."
i) Sums which Pamela said she had incurred on behalf of Agnes during her lifetime;
ii) Debts which Agnes had contracted but had not paid; and
iii) Sums which Pamela had incurred as Agnes' personal representative and in respect of which she claimed to be entitled to indemnity from the estate.
"this Court finds that there is strong evidence of fraud upon the court perpetrated by Petitioner in both the proceedings before the High Court and this Court. This Court is further of the opinion that Petitioner, by proceeding as she has, is attempting to circumvent the decision of the Westchester County Surrogate's Court, and the decision of Judge Vonhof of the Palm Beach Court."
"Pamela has wholly disregarded this principle. Her every act has been calculated to promote her own personal interests and to prejudice those of the Foundation. She is in a position of irreconcilable conflict with the principal beneficiary of Agnes' estate and her hostility to the Foundation renders it quite impossible for her to fulfil her fiduciary duties. Her position as personal representative is untenable. She should be removed."
Application to set aside
"A person who is not a party but who is directly affected by a judgment or order may apply to have the judgment or order set aside."
i) No notice of the proceedings or the order was given to the Foundation;
ii) There has been no decision on the merits of the claim;
iii) There is, to put it no higher, a prima facie case that Pamela is influential in the decision making of Carvel-Florida;
iv) In any event the consent to the order was signed by Pamela's mother rather than a wholly disinterested third party; and
v) There is nothing to suggest that Pamela disclosed her relationship with Carvel-Florida to the court before it made its order.