Court rules on removal of executors in family estate dispute

High Court rules on removal of executors in family estate dispute

The High Court has adjudicated a contentious family dispute involving the removal of executors in the estate of Frank Leonard Coleman. The case, heard before Master Brightwell, involved the claimant, Vivien Ann Hanson, seeking the removal of her brothers, Jeremy Allard Coleman and Marcus Leonard Coleman, as executors of their late father's estate.

The dispute centred on the administration of the estate, which included two properties and a minority shareholding in an unlisted company. The defendants had obtained a grant of probate based on an inheritance tax return that showed the estate's beneficial interest in the properties. However, they later claimed a greater beneficial share, leading to a conflict of interest.

Master Brightwell ruled in favour of the claimant, ordering the removal of the defendants as executors and appointing Cripps Trust Corporation Ltd in their place. The court found that the defendants' actions and delays in administering the estate had caused financial loss and were not in the interests of all beneficiaries.

The judgment also addressed the issue of costs. The claimant sought her costs to be paid by the defendants on an indemnity basis. The defendants, while accepting liability for costs on a standard basis, argued for an indemnity from the estate for both their own and the claimant's costs. The court, however, deprived the defendants of their indemnity, characterising the proceedings as a beneficiaries' dispute.

Master Brightwell highlighted that the defendants had acted unreasonably, defending the claim in their own interests rather than those of the estate. The court determined that the defendants' conduct warranted the loss of their indemnity, aligning with principles established in recent case law.

The court also considered an exemption clause in the will, which the defendants argued exempted them from personal liability for costs. Master Brightwell rejected this argument, stating that the clause did not apply to costs liabilities incurred in defending the removal claim.

The judgment underscores the importance of executors acting in the best interests of the estate and highlights the potential consequences of conflicts of interest in estate administration. The ruling provides clarity on the application of indemnity costs in disputes involving the removal of executors.

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For more information on trust and estate disputes, see BeCivil's guide to Shareholder Law.