Executors behaving badly: Successful removal and IA appointed (QLD)

Getting an executor removed for undesirable behaviour can be quite the challenge in practice. Many elements are part of the equation including the conduct of the parties, the nature of the estate, the steps required to be taken to finalise the estate and the cost of appointing someone separately to administer the estate. Normally, the Court is reluctant to upset the testator’s choice of executor and the Court often wants to honour those wishes of the testator, however, in some circumstances it may be necessary for the sake of the best interests of the beneficiaries. Naturally, when I had heard of this case, I simply had to share it with the legal world more broadly.

The case of Re Franks [2021] QSC involved two siblings appointed in their father’s will as joint executors along with the deceased’s sister. The deceased’s sister had renounced leaving the two siblings as the remaining executors.

The deceased passed away on 14 July 2020 and was survived by his sister and his adult five children and some grandchildren and he left a will providing for 31 beneficiaries. The Will had not yet been proved.

The application for removal of the two remaining executors and the appointment of an independent administration came after much conflict and disagreements between the two executors. The three initial executors engaged lawyers to assist in the administration of the estate, but ultimately the solicitors were not able to obtain joint instructions to continue with the administration. Shortly after the solicitors declined to act further, one of the two executors made the application to appoint an independent administrator to administer the estate.

The estate was comprised of 4 pieces of real property, an irrigation licence, fishing licence, bulldozers, tractors, irrigation equipment, motor vehicles, and much other farming equipment and accessories. There was little by way of liquid assets.

The application to appoint an independent administrator came after much conflict between the two sibling executors over access to documents, payments of debts from available bank accounts for insurance and other disagreements. By the time of the application, the executors had not opened an estate bank account and whilst one of the two remaining executors had suggested a meeting among the family to resolve the issues, many of the family refused to attend the meeting. To complicate matters further, one of the five adult children also gave notice and filed an application for further provision under Part 4 of the Succession Act 1981 (Qld).

The other remaining executor opposed the application along with one of the other adult children.

Notwithstanding the disputes regarding the payment of of debts and identification of assets, the respondent contended that these matters had been dealt with and payment of debts had been arranged. The Court identified the peculiar feature that the respondent contended that there was no reason that the remaining executors could acct jointly on matters, although the respondent had unilaterally attended to many of the matters which the Court noted was contrary to his contentions of the executors acting jointly.

In removing the remaining executors and approving the appointment of an independent administrator, the Court noted, at paras 44-50:

At the highest level, the question is what is in the best interest of the persons who have an interest in the estate, including creditors and beneficiaries and its due administration. Although a conflict between personal representatives is not determinative per se, there is no precondition of default of the part of the executors one of them before the power under s 6 can be exercised. Due regard must be paid to the testator’s wishes as to the identity of his executors and trustees. But it would be a mistake to assume that a testator who made a will where potential disputes among beneficiaries might arise should be taken to have anticipated such disputes among those of the beneficiaries he appoints as executors.

The obvious personal interests of each of the actors in the present case is likely to affect and to have affected the positions that they adopt.  None of them has been shown to have acted in the interests of the estate irrespective of their own personal interest.  As well, the concerns raised by the applicant include the possibility of conflict of interest between the respondent as executor and his personal interests in respect of potential liability to the estate.

Apart from the weight that might be accorded to the testator’s wishes generally, it should be observed that one of the executors has already renounced due to the internal conflicts among them.  Further, it is to be noted that although the respondent urged upon the Court that he and the applicant would be able to agree as to the future administration of the estate, he did not wish for the Court to make an order referring the matter to mediation so that any of the existing possible disputes might be explored and resolved before this application is decided.

There are a number of other cases that have concerned conflict or disputes among beneficiaries and executors.  In the end, each case must turn on its own facts. 

In the face of the conflict to date and the differing personal interests that appear to have affected the conduct of the applicant and the respondent and the absence of any likely agreement as to funding of the expenses of the estate, including the defence of David Franks’ application for further provision from the estate, there is likely to be benefit in an independent administrator who will not need the agreement for joint action and who will not be compromised by conflicts of interest or personal interest. 

In these circumstances, the countervailing factor of the testator’s wishes as to the identity of his executors should, in my view, give way.  The additional negative factor of the expense to the estate of an independent administrator is acknowledged.  However, at present there is no apparent practicable process by which the remaining executors appear to be able to take the administration of the estate forward by agreement, particularly in the absence of any proposal that may be agreed as to funding the expenses of the estate in defending David Franks’ application for further provision. 

In those circumstances, in my view, it is appropriate to make the orders sought by the application. 

You can read the full case here.