Jonathan Dorman v John William Reece & Ors

A specific devisee is generally entitled to the benefit of devised property from the testator’s death and must bear expenses attributable to that property. That principle may not apply where the specific devise fails because the estate’s other assets are insufficient to meet estate liabilities. A beneficiary cannot shift those expenses to residuary beneficiaries merely because probate administration or a caveat delayed sale, absent a recognised claim or proof that the devise has failed. A personal representative’s delay may instead give rise to a separate claim in devastavit. Where money is advanced as a bridging loan and repayment is not proved, the debt remains due to the estate. Interest may be awarded under Senior Courts Act 1981 section 35 A to compensate the estate for the lost investment opportunity.

The claimant, acting as administrator of William Reece’s estate, sought determination of issues concerning money advanced by the deceased to his son John, a flat devised to John under the will, and liabilities associated with that flat.

The court determined whether the advance was a debt, whether interest was payable, whether John was liable for service charges and other flat expenses, and whether he was liable for the costs of sale. The defendants relied on the probate administration and a caveat as reasons why flat expenses should fall on the estate.

1. The monies. The deceased’s payments totalling £254,656.86 were made as a bridging loan to enable John to purchase Ovaltine Court before selling Broadlawns Court. John’s contemporaneous statements accepted that arrangement and asserted repayment. The evidence showed that the sale proceeds were paid to John, not to the deceased. John’s later account was inconsistent and was rejected. The debt remained payable to the estate.
2. Interest. Under section 35 A of the Senior Courts Act 1981, the court had discretion to award interest. Interest at 3% simple was appropriate to compensate the estate for its inability to invest the monies, running from completion of the sale of Broadlawns Court.
3. Flat expenses. Applying Re Rooke [1933] Ch 970, a specific devisee is entitled to the property from death but is also liable for expenses relating to it. John’s inability to sell during the caveat did not transfer liability to the residuary beneficiaries. He could have sought a limited grant or brought the probate claim earlier. No legal basis for a claim against his sisters was established, and the estate’s other assets were sufficient to meet liabilities.
4. Any proven delay by the administrator in selling the flat would potentially constitute a breach of duty giving rise to a claim in devastavit, but that claim was outside these proceedings and would not justify reallocating the flat expenses.
5. The same principle applied to the costs of sale. Those costs were therefore John’s responsibility unless the specific devise failed because the estate’s other assets were insufficient to meet its liabilities.