(1) Anita Mussell (2) David Williams -v- (1) Christopher Patience (2) Veronica Patience  EWHC 430 Ch concerns a dispute in relation to the estate of the late Louis Patience for which probate was granted some 20 years prior to this decision.
The claimant executors were (1) a daughter of the deceased and (2) a partner in the firm of solicitors that drafted the will, who had long since retired.
The defendants were two of the three other children and beneficiaries of the deceased who were disputing the estate accounts that the claimants had prepared and for which they were seeking the beneficiaries approval to sign off. The claimants issued proceedings seeking a declaration that the “final estate accounts” are correct and for a direction that the estate be administered accordingly. However, the Court treated the claim as being one for the taking of an account i.e. to seek the court’s approval in default of that of the defendants.
The defendants main area of contention was the lack of information provided in support of legal fees charged by two firms of solicitors, some of which were incurred 20 years previous. They raised four points (1) there is no presumption that the solicitors’ bills approved and/or paid by the executors are automatically the liability of the beneficiaries; (2) the liability of the beneficiaries to the executors depends upon the contractual or otherwise implied terms; (3) there was no term (implied or otherwise) that the beneficiaries shall indemnify the executors for all legal expenses simply because they have been approved/paid and irrespective of whether they were incurred reasonably, appropriately or otherwise and; (4) as the legal persons with possession (actual or constructive) of the material evidence as to how such expenses etc. were incurred, it is for the executors (clients) to show that they were legitimately incurred.
The claimants submitted that executors have a contractual right to be paid fees for work done and to be reimbursed for their expenses incurred in retaining solicitors and that there is a rebuttable presumption that costs to be reimbursed to the executors are reasonably incurred and reasonable in amount (CPR 44.5(1)). They also submitted that the rules on detailed assessment of costs are not applicable to settling an account between executor and beneficiary, as the question is simply whether the legal costs are expenses of the executors properly incurred in the conduct of their office.
The court, in determining the issue, made reference to Williams, Mortimer and Sunnucks, Executors, Administrators and Probate, 20th edition, which states “the settled rule that whatever a trustee or representative has expended in the fair execution of his trust may be allowed him in passing his accounts”. This proposition is supported by Daniell’s Chancery Practice, which states “The rule is that a representative is entitled to be allowed all expenses that have been properly incurred by him in the conduct of his office, except those that arise from his own default.”
This is also enshrined in the Trustee Act 2000. Section 31 (1) provides that “A trustee (a) is entitled to be reimbursed from the trust funds, or (b) may pay out of the trust funds, expenses properly incurred by him when acting on behalf of the trust”. This also applies to a personal representative administering an estate by virtue of section 35 of that Act.
The Court found that where executors have the benefit of an express clause giving them remuneration and indemnity for expenses incurred in the administration of the estate, they may well have a contractual right within CPR 44.5(1). However, this is a rule concerned with assessment of costs. The Court agreed that the rules on detailed assessment were not applicable here as the Court was not conducting an assessment of costs. An executor only has to show that (1) the sum was spent and; (2) that it was spent in the fair execution of the estate administration. The requisite detail of the solicitor’s bill need not extend beyond the basic information contained in the bill i.e. stating that the charges are professional charges to the executor in relation to the administration of the estate.
The Court went on to clarify that it was not for the executors to defend the legal fees. The questions of whether the legal fees were reasonably incurred and reasonable in amount were questions for an assessment under the Solicitors Act, a system that was open to the defendants as third parties who are ultimately charged with paying the fees. Although an executor is entitled to seek an assessment of a solicitor’s bill under s70 Solicitors Act 1974 where the executor is the party chargeable with the bill, this decision tells us that the executor is not obliged to exercise that right to an assessment. That is a matter for the beneficiaries in accordance with their entitlement under s71 of that Act.