THE REPRESENTATION of K.J. MacKINNON

• Jurisdiction: Jersey
• Court: Royal Court
• Judge: Bailhache, Commr.
• Judgment Date: 23 November 2009
• Date: 23 November 2009

ROYAL COURT

Bailhache, Commr.

N.F. Journeaux for the representor;

The respondent appeared in person.

Cases cited:

(1) Beddoe, In re, Downes v. Cottam, [1893] 1 Ch. 547; (1892), 62 L.J. Ch. 233; 68 L.T. 595; 2 R. 223; 41 W.R. 177; 37 Sol. Jo. 99, considered.

(2) Dixon v. Jefferson Seal Ltd., 1998 JLR 47, applied.

(3) England's Settlement Trusts, In re, [1918] 1 Ch. 24; (1917), 87 L.J. Ch. 73; 117 L.T. 466, considered.

(4) H Trust, In re, Royal Ct., August 12th, 2009; [2009] JRC 158, unreported, referred to.

(5) Hide v. Haywood (1740), 2 Atk. 126; 26 E.R. 479, considered.

(6) Holton's Settlement Trusts, In re, [1918] W.N. 78; (1918), 88 L.J. Ch. 444; 62 Sol. Jo. 403; 119 L.T. 304, considered.

(7) Ogier Trustee (Jersey) Ltd., In re, 2006 JLR N [35], dicta of Birt, Deputy Bailiff applied.

(8) Pell Frischmann Engr. Ltd. v. Bow Valley Iran Ltd., 2007 JLR 479, dicta of Page, Commr. applied.

(9) Radclyffe, Re (1881), 50 L.J. Ch. 317; 29 W.R. 420; 44 L.T. 96, considered.

(10) Skinner, In re, [1904] 1 Ch. 289; (1903), 73 L.J. Ch. 94; 52 W.R. 346; 89 L.T. 663, considered.

Legislation construed:

Wills and Successions (Jersey) Law 1993 (Revised Edition, ch.04.960), art. 15: The relevant terms of this article are set out at para. 18.

Text cited:

Williams, Mortimer & Sunnucks on Executors, Administrators & Probate, 19th ed., para. 66-06, at 1017-1018 (2008).

Successionexecutors and administratorscostsexecutor generally entitled to costs of administration from gross movable estate (under Wills and Successions (Jersey) Law 1993, art. 15)if unremunerated executor's conduct unreasonable, may be ordered to pay legatee's costs of administrative action personallynot then entitled to own costs from estatebreach of fiduciary duty may be sufficiently unusual to justify indemnity costs

The representor brought proceedings concerning the administration of his mother's estate.

The representor and the executor were brothers. A grant of probate of their mother's will had been issued to the executor in May 2006. The representor was dissatisfied with his brother's administration of the estate and, in May 2008, he brought a representation seeking various directions addressed to the executor requiring, inter alia, the provision of an inventory and account of the movable estate; the disclosure of relevant documents; and compliance with his obligations pursuant to an earlier compromise agreement.

A month before the representation was due to be heard, the representor sent proposals to the executor in an attempt to avoid a hearing, which the executor rejected peremptorily. The proposals encapsulated most of the orders that were subsequently conceded by the executor at the hearing and made by the court.

The representor applied for an order that the executor should pay his costs of the representation on the indemnity basis. He sought a further order preventing the executor from recovering his costs of the representation from the estate. The executor opposed those orders, on the ground that he had not been fraudulent, dishonest or unreasonable.

Held, ordering as follows:

The executor would be ordered to pay the representor's costs of the representation personally, on the standard basis. In respect of the costs of an administrative action, there was no distinction between the position of an executor and a trustee, who both owed fiduciary duties. Legatees and beneficiaries were entitled to expect a reasonable level of competence, proportionality and good sense from those entrusted to protect their interests. An unremunerated executor or trustee would be ordered to pay the costs of an administrative action personally if his conduct crossed the threshold of reasonably justifiable behaviour. It did not need to be fraudulent or dishonest. In the present case, the executor's peremptory rejection of the representor's proposals, which had been intended to avoid the hearing (at which the executor had conceded most of the orders made), had crossed the threshold of proportionate, justifiable and reasonable behaviour. He should instead have engaged in sensible discussion. He would therefore be ordered to pay personally the representor's costs of and incidental to the representation from the date the proposals were sent. It followed that the executor would not be permitted to recover his costs of the representation from the estate, from the same date. As a matter of general principle, an executor was entitled to recover the costs of administration from the gross movable estate, under art. 15 of the Wills and Successions (Jersey) Law 1993, but an executor ordered to pay the costs of an administrative action personally would logically be prevented from recovering his own costs from the estate. A breach of fiduciary duty could be a sufficiently unusual feature to justify an order of indemnity costs but the executor's breach in the present case had not been sufficiently grave and the representor's costs would therefore be paid on the standard basis ( paras. 13-19; para. 32).

1 BAILHACHE, COMMISSIONER:

Introduction

This is an application for costs by Kenneth James MacKinnon ("James") arising from his representation in relation to the administration of the estate of his mother, Dorothy Emily Sparke MacKinnon ("the testatrix"). The testatrix died on October 15th, 2002. Following her death, there were proceedings before this court in relation to family trusts between James and his brother, Andrew Kinross MacKinnon ("Andrew"). Those proceedings were compromised by an agreement dated April 5th, 2006 ("the 2006 agreement"). As a result of the 2006 agreement, a grant of probate of the estate of the testatrix was issued to Andrew on May 10th, 2006.

2 Unfortunately, disagreement between the brothers continues. James's representation concerned his dissatisfaction with Andrew's conduct of the administration of the estate. The representation was made on May 15th, 2008 and was heard by this court, after a number of adjournments, on May 21st, 2009. The court then issued an Act containing a number of directions addressed principally to Andrew in his capacity as executor. James now seeks an order that the costs of and incidental to that representation be paid by Andrew on an indemnity basis, and a further order that Andrew be prevented from claiming his costs in relation to the representation out of the estate. It is important to emphasize that James is not seeking, at this stage in any event, an order that Andrew pay some or all of the costs of the administration personally. He seeks only the costs of bringing the representation.

3 It appears to be common ground that there are three issues for determination:

(i) Should an order for costs be made against the executor (Andrew) personally

(ii) Should it be on the indemnity basis

(iii) Should the executor be prevented from recovering his own costs in relation to the representation out of the estate

These questions raise, apparently for the first time, the extent of the jurisdiction of this court to penalize an executor in this way, and the relevant test or tests to be applied in considering the imposition of such penalties. Andrew, who appeared on his own behalf, although supported by a team of lawyers comprising two members of the English Bar and two English solicitors, contended that the third issue should be considered first. I find it more logical to approach the matter in the manner suggested by counsel for James.

Jurisdiction to order costs in an administrative action in the Probate Division

4 Counsel for James submitted that the jurisdiction to award costs was derived from art. 2 of the Civil Proceedings (Jersey) Law 1956, which states:

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