Thursday Law Report: Executor de son tort can be trustee

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25 March 1999

James v Williams

Court of Appeal (Sir Stephen Brown, President, Lord Justice Swinton Thomas and Lord Justice Aldous) 8 March 1999

AN EXECUTOR de son tort, being one of the adult children of an intestate parent, could become a constructive trustee.

The Court of Appeal allowed the plaintiff's appeal against a decision that her claim to be entitled to a one-third share in a property left by her mother, who had died intestate, was statute barred.

The plaintiff's mother died in 1972, leaving a property known as Rose Cottage. No attempt was made to take out letters of administration of her estate. By virtue of sections 46 and 47 of the Administration of Estates Act 1925, the mother's residuary estate was held on the statutory trusts for her three adult children, the plaintiff, her brother William and sister Thirza.

The plaintiff became estranged from her brother and sister, and they acted thereafter as if Rose Cottage was William's property. In 1993 William died, having appointed Thirza and her daughter, the defendant, as his executors and beneficiaries.

The defendant proved his will and purported to assent Rose Cottage to herself and her mother, subject to a charge to a building society from which William had obtained a loan. Thirza died in 1995, and, by her will, left all her property to the defendant, who thereafter claimed to be the sole owner of Rose Cottage.

In 1995 the plaintiff issued an originating summons claiming, inter alia, a declaration that she was entitled to a one-third share of Rose Cottage, and an order that the property be sold with the proceeds of sale to be divided as to one- third to the plaintiff and the balance to the defendant.

The judge dismissed the plaintiff's claim on the ground that it was statute barred, holding that, pursuant to section 15(1) of and para 2 of Sch 1 to the Limitation Act 1980, the statutory period of 12 years ran from the death of the plaintiff's mother.

The plaintiff had relied on section 21(1)(b) of the Act of 1980, which provided that no limitation period should apply to an action brought by a beneficiary under a trust to recover from the trustee trust property or the proceeds of trust property in the possession of the trustee, or previously received by the trustee and converted to his use.

She submitted that the definition of "trustee" in section 68(1)(17) of the Trustee Act 1925 made it clear that "trustee" in the Act of 1980 included a constructive trustee. The judge held, however, that William, and probably Thirza, were executors de ses torts and thus were not constructive trustees. The plaintiff appealed.

Hugh Parker (Pool Purchas & Stokes, Penzance) for the plaintiff; W.D. Ainger (Cornish & Birtill, Penzance) for the defendant.

Lord Justice Aldous said that it was accepted that by treating the property as his own William had, without valuable consideration, meddled in the estate of his mother, and that his actions had been such that he had become what was known as an executor de son tort. Since there was no direct authority on the point at issue, it had to be decided in accordance with general principles.

As a general rule a constructive trust attached to property which was held by a person in circumstances in which it would be inequitable to permit him to assert full beneficial title to the property. In many cases, an executor de son tort would not be a constructive trustee, but each case must depend on its own facts.

In the present case, had William taken out letters of administration after the death of his mother, he would have been a trustee pursuant to the provisions of the Administration of Estates Act 1925, and would have owed a fiduciary duty to the other beneficiaries.

That was relevant when considering the equitable position. The circumstances of the case were such that a constructive trust had arisen on the death of the mother. William had known that he was not solely entitled to the property. He had been under an equitable duty to hold it on trust for himself, the plaintiff, and Thirza. Accordingly, the plaintiff's case was not statute barred.