Ugolor & Ors v Ugolor

Where the validity of a will or grant is disputed, the court may appoint an administrator pending suit under section 117(1) of the Senior Courts Act 1981. The central consideration is the best interests of the estate’s beneficiaries as a whole, whoever they may ultimately prove to be. The court may replace a person claiming to act as executor where there is a good arguable case that the person is unsuitable. An urgent risk of sale does not justify permitting an unsuitable person to retain control of estate property, particularly where the proposed refinancing is provisional, commercially unattractive or would create a misleading public record. The court should also avoid authorising contemplated proceedings where doing so might imply a view on their merits.

The claimants, beneficiaries of the estate of their late mother, challenged the validity of a will under which the defendant, their brother, claimed most of the estate, including a residential property. The defendant had obtained probate and sought variation of an undertaking preventing him from raising money on the property so that he could refinance an existing mortgage threatened with enforcement.

The claimants cross-applied for the appointment of an administrator pending suit, alleging that the defendant was unfit to administer the estate because of alleged misconduct, non-compliance with court orders and dealings concerning the property. They also sought further procedural orders and proposed that a professional connected with their solicitors should be appointed.

1. The defendant’s application to vary the undertaking and permit the proposed remortgage was dismissed. The court appointed Mr Stephen Laycock as administrator pending suit under section 117(1) of the Senior Courts Act 1981.

2. The court held that the principles applicable under section 50 of the Administration of Justice Act 1985 also applied. The core concern was the best interests of the beneficiaries considered as a whole. Where there was a good arguable case for removing a person claiming to act as executor, the court had power to do so, particularly while the identity of the beneficiaries remained disputed. The approach in Schumacher v. Clarke [2019] EWHC 1031 was applied.

3. The defendant was unsuitable because the court had already identified a risk of dissipation, allegations concerning the acquisition of assets from the deceased remained unanswered, he had failed substantially to comply with information orders, had not acknowledged service or served a defence, and there were reasonable grounds for concern about how probate and registration of the property had been obtained.

4. The threatened auction did not justify leaving control with the defendant. The proposed refinancing was only an offer in principle, there was no evidence that the lender would proceed with full knowledge of the dispute, and the transaction involved substantial costs, a high interest rate and a short term. Permitting it would also have created a potentially misleading land-registry record that the defendant alone owned the property.

5. The court declined to authorise the administrator positively to bring proceedings against the existing mortgagee. Although there was a reasonable case concerning undue influence, it was unclear whether the mortgagee had the necessary notice. The decision was left to the administrator, with initial funding by the claimants. The claimants’ undertaking in damages was to cover losses arising from the defendant’s inability to refinance.

6. The defendant was given 21 days to file an acknowledgment of service, defence and counterclaim, and to provide the outstanding information verified by affidavit. The grant of probate was to be lodged in court under rule 57.6(1) of the Civil Procedure Rules 1998. The proceedings were retained temporarily in the High Court for further directions.