Crowley v Murphy (Approved)

Factual and Procedural Background

The deceased passed away on 12th December 2015, having made a will in 2009 appointing the Defendant, a practising solicitor and partner at a law firm, as executor and trustee. The residue of the estate was left to the Plaintiff, described as the deceased's assistant and sole carer. The estate was of significant value, with a gross value exceeding €1.8 million. The Plaintiff became dissatisfied with the Defendant’s administration of the estate, particularly regarding delays in realising the principal asset, a property, and the transfer of shares.

The Plaintiff initiated proceedings in July 2019 seeking various orders, including the removal of the Defendant as executor and an order vesting the property in the Plaintiff. Prior to commencement, the Plaintiff’s solicitors had raised queries and complaints, including a complaint to the Law Society of Ireland. The Defendant responded with detailed documentation and a "Matter Summary" outlining the administration efforts, including addressing family disputes, tax liabilities, and asset management.

The parties engaged in extensive affidavit exchanges, cross-examinations, and multiple hearings delayed in part by the Covid-19 pandemic. By June 2021, the parties agreed the estate administration was substantially complete, with the remaining issue being the costs of the proceedings.

Legal Issues Presented

1. Whether the proceedings brought by the Plaintiff were justified given the reliefs sought, including the removal of the Defendant as executor.
2. Whether the proceedings were instrumental in causing the Defendant to complete the administration of the estate.
3. The appropriate order as to costs, specifically whether costs should be borne personally by the Defendant or by the estate.
4. The applicable legal principles governing costs in probate and administration suits, distinguishing between ordinary administration suits and hostile lis inter partes.

Arguments of the Parties

Plaintiff's Arguments

• The Defendant was dilatory and failed to administer the estate with due expedience, causing ongoing delay and loss.
• There was a failure to manage and protect estate assets, including unresolved title defects on the property and untransferred shares.
• The Defendant breached fiduciary duties and trust obligations, particularly as a professional solicitor executor.
• The Defendant failed to provide clear accounts and adequate responses to inquiries, including to the Law Society.
• The proceedings were necessary to compel the Defendant and his firm to engage meaningfully and complete administration.
• Costs should be borne personally by the Defendant, not the estate, as the proceedings were a hostile lis inter partes and not an ordinary administration suit.

Defendant's Arguments

• The proceedings were premature and ill-advised.
• The Defendant robustly denies any delay, breach of fiduciary duty, or misconduct in the administration.
• The Defendant contends that the costs of defending the proceedings should be treated as costs in the estate, consistent with standard practice in administration suits.
• The Defendant emphasizes that the Plaintiff’s solicitors instructed the transfer of the property to facilitate sale by the Plaintiff’s solicitors, which was executed.
• No evidence was presented to substantiate the Plaintiff’s allegations of loss or misconduct.
• The Defendant relies on the terms of the will which limit executor liability except for dishonesty or wilful breach of trust, neither of which is alleged.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court began by acknowledging the serious nature of removing an executor, which requires proof of serious misconduct or special circumstances. It examined the facts in context: the Defendant was a busy solicitor appointed by the deceased, with an understanding that administration would take time due to the estate’s complexity.

The Defendant provided detailed evidence of efforts to administer the estate, including resolving family disputes, tax liabilities, and asset management. Substantial distributions had been made to the Plaintiff, and the Defendant responded to queries and a Law Society complaint with comprehensive documentation.

The Plaintiff’s complaints largely arose after the grant of probate and intensification of involvement by solicitors. However, no independent expert evidence was presented to establish that the Defendant’s pace or conduct fell below the standard of reasonable administration under s.62 of the Succession Act 1965.

The Court noted that while the Plaintiff was frustrated by delays and perceived lack of responsiveness, such frustrations are common in estate administration and do not alone justify removal or costs orders against the Defendant personally. Allegations of loss were unsupported by evidence, and the Defendant’s liability was limited by the terms of the will.

The Court found that the proceedings were not the event that compelled completion of administration, as the estate was largely administered by the time proceedings commenced and the Plaintiff subsequently agreed to the transfer of the principal asset to himself. The Court concluded the proceedings were not the appropriate means to expedite administration and did not justify disallowing any portion of the Defendant’s costs.

Holding and Implications

The Court held that the Defendant was entitled to his costs of the proceedings, whether as costs of the proceedings themselves or as costs recoverable in the administration of the estate. The Plaintiff’s application for costs to be borne personally by the Defendant was rejected.

The direct effect is that the Defendant will recover his costs from the estate, and no order for costs against him personally is made. The Court did not find sufficient evidence of misconduct or special circumstances to justify removal of the Defendant or adverse costs orders. No new precedent was established, as the Court applied established principles regarding executor removal and costs in probate litigation.

The parties were directed to agree appropriate orders regarding costs, or to make brief written submissions within fourteen days, after which the Court would make orders without further reference.