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22 Jan

PL-PRACTICE WEEK 19 (PERSONAL REPRESENTATIVES AND ASSENT)

WEEK 19– PERSONAL REPRESENTATIVES & ASSENT

Personal Representative: is an umbrella term for executors[1], administrators[2], and trustees[3] (anyone carrying out the wishes of the deceased and protecting the beneficiaries). They cannot assign their office-Re Odutola, Section 6 AEL.

APPOINTMENT OF PERSONAL ADMINISTRATORS

Express Appointment (by testator) in his Will. These ones are less likely to be challenged.

Implied Appointment: from the tenor of the will; if a person carries out duties that more or less equate with fulfilling the deceased person’s wish, such as collating the assets and settling the debts of the deceased. Adeniji v Probate Registrar, In the Goods of Cook.

  • Nominee Appointment/Power of Appointment: the deceased nominates a person in the will to appoint a PR.
  • Appointment by Court: Or 55 HCLSCPR if there is a Will but no executor; when the executor is outside jurisdiction; if the executor or a beneficiary applies to the court for appointment of another personal representative; if the will is being contested in court the court will appoint an administrator pende lite[4]; and when there is minority or life interest in a trust (court will appoint an additional administrator).
  • Appointment by Representation (Operation of the Law): means the executor of the last dead executor (who died testate) shall handle the testator’s will Section 8 AELL. This creates a chain of representation which can be broken if last surviving executor dies intestate (does not appoint executor) or does not obtain probate or renounced probate.

Executors de son Tort: become executors by intermeddling with the deceased’s estate, are liable to the extent of their interference, and make account of every asset they handle-Adeniyi Jones v Martins. If a person performs an act indicating his intention to take up administration of the estate such an act will be construed as acceptance of the office of PR-Re Odutola, Long and Feaver v Symes and Hamman.

In Harrison v Rowley the court held arranging the testator’s funeral is not one such act. In Adeniji v Jones, this was construed where a person collected rent on the property of her deceased brother.

It appears that an appointed executor who starts to act without applying for/grant of probate would also be regarded as executor de son tort. He is liable for losses, to pay for services rendered, liable to creditors, liable to pay fine, liable for citation, liable to pay inheritance tax, not entitled to indemnity/reimbursement.

– Substitutional Executors: which can only be appointed upon fulfilment of the condition. E.g. if the executor predeceases the testator.

FACTORS TO BE CONSIDERED IN APPOINTING PR. Since he is the living representative of the Testator, testator should consider; willingness, availability, capacity (mental and otherwise… whether individual or professional), credibility (not fraudster or one with low moral turpitude), honesty, knowledge, logistics, age (not minor), harmony of persons to be appointed, preferably literate, healthier and younger that testator, reside within the country where most of testator’s assets are located, etc.

Grant of representation may be restricted by custom, applicant’s infancy or unsoundness of mind. When minor, needs some other adults to act or trust corporation-Section 24 AEL?

NUMBERS OF PERSONAL REPRESENTATIVES: in practice, they are more than one but not more than 4 (i.e. 2—4)[5]. Probate can be granted to a sole executor (Section 9 AELL) and more than four executors can be appointed in the Will but probate will only be granted to the first four who apply-Section 24 AEL. Where executors are also trustees, at least 2 are needed for valid receipt on land.

Minor would make a double probate when he attains majority.

Persons Entitled to Probate: executors then a beneficiary under the will then creditors if any.

REMUNERATION OF PERSONAL REPRESENTATIVES: Payment of Personal Representatives: their services are presumed gratuitous-Re Gates, but they can be paid where the court so orders[6] (such payment should not exceed N10,000 and 5% of the value of the property administered–or N10,000 and 5% of the money realized from selling the property):

Where Will contains a charging clause NBA v Koku (note that the executor should not witness the will or he will lose any gift including professional fees Re Gates, Re Pooley, Section 15 Wills Act, Section 8 Wills Law Lagos), and for the rule in Cradock v Piper (if the executor is a lawyer litigating on behalf of other personal representatives) Finally for out of pocket expenses[7].

WITHDRAWAL/CESSATION/RENUNCIATION OF REPRESENTATION: is implied by law when the executor dies. If he is alive he must positively renounce the entire estate in a letter to the probate registrar, an affidavit, or FORM 71 (Renunciation of Probate Oath Form). If he is the only executor, it appears the estate would devolve as though no executor was appointed-Section 6 AELL.

Doing nothing is not renunciation. Any legal act of the executor before renunciation binds the estate and he cannot be sued for it, but an executor cannot renounce probate after meddling with the estate.

He may with leave of the probate registrar (or is it court?) return after renunciation giving exceptional reasons for his return (the court must be convinced his return will improve the estate). Section 7 AELL, In the Goods of Gill.

If a person appointed executor neither accepts nor renounces probate the court can order him via a citation to accept or renounce within 21 days (14 in Abuja).

POWERS OF PR:

Manage the estate (and purchaser of value can get interest except there is fraud or collusion) Can sue on behalf of the estate, sell[8], mortgage, invest, insure, lease or delegate the part of the estate over which he was granted probate (to generate income to satisfy debts) executors can act personally or jointly but all must concur for alienation of interest in realty-S4 AEL, Ibrahim v Ojomo (except court grants otherwise OR other PRs have renounced or not yet been granted probate);

Power to invest the assets of the deceased estate in investment authorised by the will/law (Trustee Act)-Re Power, Re Wragg, 37 AELL. he can postpone distribution of the estate for 1 year maximum (the first year)—‘Executor’s Year’ (subject to interest of the estate (depreciation, interest, etc.) and beneficiaries or order of Court Or debts as debts should still be paid even during the executor’s year); power to continue/run the business or trade of the testator-Re White power to appoint trustees for infant (absolutely (not conditionally) entitled beneficiaries; power to appropriate assets in the estate to satisfy a legacy or any other interest after professional valuation of the estate Re Bythway, Re Phelps, S 44 AELL[9]. Power to sue and be sued on behalf of the estate of the deceased (personal actions like defamation, seduction, etc. would not survive).

In the case of a Bini man, no action can be maintained in respect of his estate until after the burial-Ovensiri v Osagiede, Idehen v Idehen.

Power to insure, Distress for rent, power to delegate

DUTIES OF PERSONAL REPRESENTATIVES:

They are in a position of trust and confidence. Their duties include; proving the will (by applying to the Probate Registry n proving in common or solemn form), giving the testator a decent burial, gathering and ascertain the nature and value of the estate, duty of care (no negligence or waste)-19 AEL, duty to act in good faith (being a fiduciary, he should not convert, misappropriate, etc.), keeping inventory/ account (which can be inspected by persons interested in the estate[10], and issuing assent- S 3 AELL[11], duty to diligently pay out liabilities and just debts;

  • – ascertain beneficiaries[12] and distribute the assets in accordance with the wishes of the testator, tenor of the will and stipulations of law. not appoint his firm as solicitor, no conflict, remuneration accordingly.

NBA v Koku: an executor cannot appoint himself as lawyer to the deceased’s estate; if he wants to be remunerated he should ensure the will contains a charging clause or some other trust document. A lawyer–executor who acts against the wishes of the deceased person is guilty of conduct incompatible with the status of a legal practitioner and will be suspended from practice for 3 years. Read full case. It appears he also encouraged the winding up of Apalagada Investment Ltd to pay his legal fees.

LIABILITIES OF PERSONAL REPRESENTATIVES:

liability for waste (he is to repair) and conversion[13]; liability when he intermeddles with the estate without taking probate, to pay inheritance tax and other estate taxes, liability for conversion/waste, liability to creditors or beneficiaries, liability to take out probate (or be cited or regarded as intermeddling) and liability for co-representation (especially where he acquiesced in the breach by the other PR or he was the one that breached… as all PRs administer the estate together; they cannot agree to divide administration) .

ACCOUNTS TO BE MAINTAINED AND FILED BY PERSONAL REPRESENTATIVES: every PR must (throughout his administration) keep accurate accounts and file in court where called upon to do so (in Lagos and Rivers; every 12 months[14])-OR 57 Lagos, 14 AELL. 49 Abuja. Thompson v Dunn.

To properly depict true state of administration and development of endeavours. The account shall include;

– Inventory of all the assets in the estate.

– Account of all monies had and received on behalf of the estate.

– Account of purchases

– Account of expenses.

– Vouchers relating to the administration of the estate and

– Verifying Affidavit

Registrar would scrutinise such account and may require rectification within such time as judge may deem reasonable.

For the clarification of doubt; he is accountable for any profit made from estate-Regal v Gulliver, negligent distribution; accountable for waste and conversion-Head v Gould, Renner v Renner, Adeniji v The Probate Registrar.

As a precaution, he should avoid instances of actual or implied conflict of interest, he should avoid mixing funds, he should get receipt/invoices for expenses.

PR may be called to render account (by registrar in writing with 60 days lee or additional grace period may be added where deserving) where there is a complaint of maladministration, application is made to the court for PR’s removal, where he is applying to surrender the estate vested in him or upon completion of administration of the estate for discharge by the court. Accounts should be filed with verifying affidavit and accounts should be open for inspection by any person interested in the estate.

EFFECT OF FAILURE TO MAINTAIN AND FILE PROPER ACCOUNTS: pays a penalty of #100 for each day of default if not; face imprisonment for a term not exceeding 6 months-Order 57 Lagos, 49 Abuja

DISCHARGE / EXCULPATION OF PERSONAL REPRESENTATIVES: by express discharge in the will for all acts except fraud and dishonesty; discharge by the affected creditor or beneficiary of full age and capacity who is aware of breach; by the court where deserving… especially if the executor acted honestly and reasonably-Sodipo and Ors v Ademola and Ors; and by plea of limitation (statute bar) not covering fraud[15].

Ultimate Discharge occurs upon proper conclusion of administration (i.e. satisfaction of all legitimate claims and distribution of residue), personal representative is to file final accounts and the estate is wound up.

Where the court is satisfied, it may discharge the PRs. (such discharge may not relieve him of liabilities though). The administration bond entered at the time of application for grant would be discharged. If the bond is not discharged as a result of the administrators default, the bondsman loses the bond but is entitled to indemnity from the administrator. On discharge generally, see Chief Registrar v Somefun.

ASSENTS (NATURE AND ELEMENTS): is used to transfer title in real property from the PR to the ENTITLED beneficiary when the beneficiary is not the PR. It should not be by deed (and when by deed should not be registered) but must be in writing precisely stating the beneficiary and the property and signed by all the PRs Re Stirrup’s Contract. 40 AEL

A personal representative may demand security for the discharge of any duty, debt or liability as a condition for giving assent (S 40 AEL), but shall not postpone the giving of assent[16] for that reason if a reasonable agreement has been reached for discharge of the debt[17].

Provisions in the will may grant equitable interest but assent confers legal interest on the beneficiary 40 AEL. On assents, see Renner v Renner. Addition to effects; it shows that Beneficiary is the one entitled ot the estate, it does not remove existing liabilities on the property, it does not prevent the right to trace.

Assent has the commencement, parties, vesting, assent clause, declaration, acknowledgement, testimonium, execution/attestation

GRANT OF PROBATE OR ADMINISTRATION can be revoked (through the registry or court (writ of summons or originating summons-Doherty v Doherty) where a will (for LOA) or latter will (for probate) appointing another person as executor is discovered after the grant, where grant was issued to a wrong person or obtained by fraud or material misrepresentation which was instrumental to the grant or where the probate was granted while a Caveat is in force-Dan Jumbo v Dan Jumbo, where testator is found to be alive, executor/Administrator becomes incapacitated by reason of insanity, infirmity, disinterested, absent without trace, a grant to the Administrator General can be revoked where a person within 6 months from grant satisfactorily proves that he is entitled to the grant and was not served a citation-Section 20 AELL, where court revokes for better administration of the estate.

The PR loses capacity to deal with the estate from the date of revocation (not retrospective as acts prior to revocation are not affected-17 AEL).

IDENTIFY ETHICAL ISSUES ARISING FROM THE ABOVE OUTCOMES

OBUSEZ V OBUSEZ [2007] 10 NWLR (PT. 1043) 430, NBA V KOKU (2006) ALL FWLR (PT.334) 192

Unlike PRs, trustee can appoint another person as trustee and thus transfer the duties and retire from the trust.

[1] Where the testator provided for PR.

[2] Where Will does not provide for them.

[3] Unlike executors, trustee’s discretion is limited and trustee has power to appoint another trustee.

[4] Ladejobi v Odutola holdings. Such an administrator will not have to apply for letters of administration.

[5] It is advantageous to appoint more than one as one of the executors may die, division of labour, standing in for a busy or unavailable co-representative. Although there is greater likelihood of conflict between the executors.

[6] Or 55 R 43 HCLSCPR 2004.

[7] Like transportation, telephone calls, etc-Craddle v Piper.

[8] Personal assets can only be resorted to when other assets are insufficient to defray costs and debts.

[9] He not mandated to give where the beneficiary is not yet in existence or cannot be found or is a lunatic with no committee or trustee. Also specific legacies must not be appropriated.

[10] I.e. inventory, account of administration, vouchers, affidavit in verification, oath for administration, bond, form for surety, . Chk Or 55 Rule 46 HCLSCPR 2004. He should justify every expenditure and expenses made by him. Lagos requires rendition every 6 months and he can use the lagos Form of Administration Account may be used. All Order 55. Accounts may be needed wehre there is an allegation of mal administration, there is an application for removal/discharge of PR, on completion of administration. Unauthorised payments should not be made.

[11] Accounts kept by PR and filed in court every 12 months (in Lagos) until the estate is fully liquidated: inventory, income and expenditure accounts, vouchers, and affidavit in verification, to be inspected by any person interested in the administration of the estate. /Penalty: N100 per day of default and 6 months in prison for contempt.

[12] He could advertise and grant time frame for distribution.

[13] Devastavit: wasting the assets of a deceased person/such that a creditor or beneficiary loses.

[14] Failure may ground summoning to show why he should not be punished Or 57 Lagos.

[15] Plea of Limitation: against creditor–6 months, against beneficiary–12 months.

[16] An executor cannot be compelled to give assent in the Executor’s Year.

[17] Doctrine of Relation Back means something done today will be treated as though it had been done earlier. In relation to personal representatives: they are not allowed to commence actions regarding the estate until they have secured probate or letter of administration, or else the suit will be struck out Mallam v Mairiga. But when the suit is brought by a personal representative, he may after securing probate amend the writ to show he is the official administrator of the estate. The subsequent grant of administration will relate back to when the suit was commenced Jeddo v Imiko. i.e. the fact that the grant of administration was not made at the commencement of the action would not affect the proceedings provided the action was not commenced as an administrator.

Isochukwu

Quite eccentric really

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