Younger v Saner

A professional administrator must exercise the care and skill expected of an experienced solicitor. The duty is one of diligent administration, not exceptional initiative or entrepreneurial skill. The administrator need not finance the administration personally or expose himself to personal liability without adequate protection.

Breach and causation must be assessed on orthodox contractual and tortious principles, without hindsight. A breach may be established, but recovery still fails where the breach caused no more than a speculative possibility of financial benefit. In a complex estate, the administrator’s decisions must be judged in their factual and financial context.

The appellant, one of three beneficiaries of her father’s intestate estate, sued the respondent solicitor, who had acted as administrator, alleging breaches of duty in relation to a hotel business and associated companies. The deputy judge found one breach, namely allowing OAL to be struck off the register, but held that it caused no loss. He rejected the remaining allegations, including failures to obtain profits, enforce a contractual finder’s fee, obtain valuations and press the hotel’s leaseholder.

Permission to appeal was granted on some grounds and renewed on others. The central issues were whether the administrator had acted in breach of duty and, if so, whether any breach caused recoverable loss.

1. Appeal dismissed. The Court of Appeal unanimously upheld the deputy judge’s dismissal of the claim. Permission to appeal on the additional grounds was refused, and the appellant was ordered to pay the costs.
2. A professional administrator must meet the degree of care and skill expected of an experienced solicitor. The duty is to act as a diligent administrator, not as an exceptional negotiator or entrepreneur. The administrator is not required to use personal or firm funds, or assume personal liability, without adequate protection.
3. The administrator’s conduct must be assessed without hindsight and by reference to the pleaded case. The court should not construct a more attractive course of action after the event and treat failure to adopt it as a breach.
4. The income-stream claim failed. The estate’s rights depended on a complex and doubtful chain involving OAL, INL, the trading agreement, the trust deed and the finder’s fee agreement. The court accepted that a more direct fiduciary-accountability argument might have been arguable, but it had not been advanced at the relevant time and could not support a finding of breach on the pleaded case. It was not the administrator’s duty to pressure or harry Lansdowne into hostile litigation.
5. The finder’s-fee claim also failed. The deputy judge was entitled to find that Lansdowne’s offers of £240,000 and £350,000, subject to dilapidations, were conditional on Shane vacating the hotel. The criticisms concerning failure to obtain a valuation, quantify dilapidations, reject the offers or press Lansdowne harder did not establish breach.
6. Allowing OAL to be struck off was a breach of duty. However, OAL’s assets were highly speculative and probably worthless, and earlier control would not probably have produced a satisfactory settlement. The breach therefore caused no loss.
7. The court did not need to decide whether mitigation principles apply to equitable compensation for breach of duty by a personal representative. The expression loss of a chance could bear a wider meaning, but the claim failed independently on breach and causation.

• Court of Appeal (Civil Division): appeal from the order of Deputy Judge Michael Briggs QC dated 17 December 2001. Appeal dismissed; permission to appeal refused.
• High Court, Chancery Division: the deputy judge dismissed the beneficiary’s claim against the administrator, finding one breach concerning OAL but no causative loss.