PT-2024-000461 - [2025] EWHC 2285 (Ch)

The claimants say that apart from being the registered legal proprietors of the Property in respect of the Property Trust, the defendants are strangers. They have no interest and no role in relation to the assets of the deceased. They are not Rutland Trustees, because the Rutland Trust was never established by an assent of any property to either of the original Rutland Trustees named in the will or to the defendants.

Mr Adams sought to sidestep the shortcomings in the Application itself by advancing his submissions as being based on the standing of the defendants. He submitted that the correct analysis was that the defendants were bare trustees of the legal title to the Property under the Property Trust only and not Rutland Trustees.

He argues that following Vicki’s death it is the claimants and Mr Bradshaw who have the obligation to pay any liabilities that arise in relation to the Property. The defendants therefore have no liabilities to be concerned about, and the court can simply order the transfer of the legal title under the Property Trust. There is no need for any protection or indemnity. They do not hold any property on the terms of the Rutland Trust and so have no entitlement to and do not need any indemnities or protections and have no entitlement to recover any costs or expenses for administering the Rutland Trust.

He argues that Vicki had only ever been a prospective trustee. The absence of any assent to Vicki as the prospective Rutland Trustee of the share in the Property or the Cash Sum was fatal. There was nothing to appoint the defendants to in 2008 when Vicki purported to enter into the DOA. Vicki died before any assent by the executors to her in her capacity as Rutland Trustee.

Further he argues that any assent of the share in the Property would have to have been in writing and express pursuant to s.36 Administration of Estates Act 1925 (“AEA1925”). In the absence of an express assent in writing, Vicki did not, in her capacity as prospective trustee, obtain any vested interest in the Property or the Cash Sum.

The defendants submit that the Rutland Trust was a will trust created by the will of the deceased which was constituted at the date of the grant of probate. Vicki and Mr Neal were the original Rutland Trustees who had vested in them a chose in action which was the right to call for due administration of and transfer of property under the terms of the will. Such a chose in action was transmissible and capable of being settled on trust. The Rutland Trust without more therefore had existed since 30 August 2002.

Further in any event an assent can be express or implied. The implication can be as a consequence of a change in the character in which the relevant assets were held and/or by inference from the conduct of the relevant parties in relation to the asset said to have been impliedly assented. Consequently, such an implicit assent does not need to be in writing particularly where it relates to a beneficial interest. There would therefore be no bar in principle to an implied assent in relation to the share in the Property which accrued to the Rutland Trust.

The starting point is to consider what is the nature of the interest that a beneficiary has in an unadministered estate.

In Commissioner of Stamp Duties v Livingston [1965] AC 694 at 707 the Privy Council considered the nature of the interest of a residuary legatee in an unadministered estate as well as those of an executor. The case concerned Mrs Coulson’s estate and its interest as a residuary legatee in her late husband, Mr Livingston’s unadministered estate.

“. . . whatever property came to the executor virtute officii came to him in full ownership, without distinction between legal and equitable interests. The whole property was his. He held it for the purpose of carrying out the functions and duties of administration, not for his own benefit; and these duties would be enforced upon him by the Court of Chancery, if application had to be made for that purpose by a creditor or beneficiary interested in the estate.”

Equity does not recognise or create a beneficial interest in the assets in the executor's hands during the course of administration for residuary legatees. However, having reviewed a number of authorities at 717C to D the Privy Council opined that the correct test was the one that had been considered in Sudeley (Lord) v Attorney General [1897] AC 1. Consequently it was necessary to determine the nature of the interest a person was entitled to under the will in the unadministered estate:

“If the present appeal is tried by this test … their Lordships regard it as clearly established that Mrs. Coulson was not entitled to any beneficial interest in any property in Queensland at the date of her death. What she was entitled to in respect of her rights under her deceased husband’s will wasa chose in action, capable of being invoked for any purpose connected with the proper administration of his estate; …”

Lewin on Trusts 20^th Edition (“Lewin”) at 2-040 explains it in this way:

Interests under estates in course of administration

It is well established that interests in estates in the course of administration are capable of being settled. [Commissioner of Stamp Duties (Queensland) v Livingston [1965] A.C. 694 PC]. This is often done by “instruments of variation” intended to take advantage of inheritance tax and capital gains tax reliefs, where it is normally essential that the “variation”, effectively a resettlement, should be made without consideration other than the consideration of making a variation or disclaimer of other dispositions within the same estate. It seems that in such cases the property which the settlor is settling is a present right to secure the due administration of an estate. While there is no difficulty in resettling by such instruments the present right to due administration as regards the capital or income of an unadministered residue, or an undivided share in it, or charging it with the payment of money (which usually takes the form of a “legacy” written into the relevant will), it is not clear whether it is permissible, as a matter of trust law, [the footnote records that “There is however no difficulty as a matter of revenue law: IHTA s.142 (6) …”] to resettle, without consideration, specific assets comprised in an unadministered residue, for a beneficiary has no beneficial interest in any specific asset in the estate until there has been an assent in respect of it. It is accordingly thought that the safer course is to ensure that the personal representatives make an express or implied assent in respect of such assets before the “variation” is made.

Williams Mortimer and Sunnucks on Executors, Administrators and Probate 22^nd Edition (“WMS”) at Chapter 72.03 explains the rights of beneficiaries in unadministered estates:

Right of beneficiary

Until assent or conveyance, a person interested under the will or intestacy has an inchoate right transmissible to his own representatives. It is a chose in action capable of itself being settled or transmitted [Marshall v Kerr [1995] 1 A.C 148 at 166]. A person so interested cannot, however, without the authority of the representatives, take possession of the property, even though the testator expressly directs that he shall do so; otherwise a testator might appoint all their effects to be taken in fraud of creditors. Should the beneficiary take possession, the representatives may sue them for possession, trespass or conversion, according to the circumstances. Thus, although the beneficiary is actually in possession of property specifically bequeathed, and the assets are fully adequate to the payment of debts, the beneficiary has no right to retain property in opposition to the representatives, by whom, in such a case, an action will lie to recover it. The inchoate right, is however, equivalent to a beneficial interest under a trust for limitation purposes.

In Marshall v Kerr [1995] 1AC 148, Mrs Kerr was entitled to half of the residuary estate of the deceased. Whilst the estate was still being administered, she entered into an arrangement varying the will so as to settle her share of the estate under trusts. The claim was primarily concerned with the tax treatment but in considering the issues their Lordships addressed the question of what interest Mrs Kerr had in the unadministered estate. Lord Templeman at 157E to 158A referred to the summary of Lord Radcliffe’s advice by Buckley J in In re Leigh’s Will Trusts [1970] Ch 277, 281 – 282:

" (1) the entire ownership of the property comprised in the estate of a deceased person which remains unadministered is in the deceased's legal personal representative for the purposes of administration without any differentiation between legal and equitable interests; (2) no residuary legatee or person entitled upon the intestacy of the deceased has any proprietary interest in any particular asset comprised in the unadministered estate of the deceased; (3) each such legateeor person so entitled is entitled to a chose in action, viz. a right to require the deceased's estate to be duly administered, whereby he can protect those rights to which he hopes to become entitled in possession in the due course of the administration of the deceased's estate; (4) each such legatee or person so entitled has a transmissible interest in the estate, notwithstanding that it remains unadministered. This transmissible or disposable interest can, I think, only consist of the chose in action in question with such rights and interests as it carries in gremio. . . . If a person entitled to such a chose in action can transmit or assign it, such transmission or assignment must carry with it the right to receive the fruits of the chose in action when they mature."

Lord Templeman then applied this analysis to the facts in Marshall v Kerr explaining at 158B:

“By the arrangement Mrs. Kerr assigned and created a settlement of the chose in action to which she was then entitled as a beneficiary under the will of the testator. The trustees of that settlement received the fruits of the chose in action in due course.”

And then continued at 158D:

“By the law of England, the arrangement was a settlement by Mrs. Kerr of a chose in action, namely the right to require the estate of the testator to be duly administered. Mrs. Kerr was the settlor of that chose in action which was not an asset of which the testator was competent to dispose.”

In Re Neeld dec’d [1962] (Ch) there had been a conditional devise of certain land to trustees on trust for a named beneficiary for life with remainder to others. The relevant issue for these purposes was when the beneficiary became entitled to require the executors to execute a vesting assent in favour of trustees. The Court of Appeal accepted that the devised property would not be required to meet any debts or the costs of administration but nonetheless considered that there were other matters that might provide justification for the executors refusing to execute a vesting assent having been called upon to do so.

Diplock LJ and Upjohn LJ at 690 and 691explained that the beneficiary was not entitled to the actual receipt of any income as a life tenant until either the executors executed a vesting assent or the beneficiary was entitled to call for it.

However, Upjohn LJ continued at 691:

“I do not want to throw any doubt upon the general proposition that it is no doubt legally correct to describe the third defendant as the person entitled in equity to the estates devised to him by clause 3.”

Thus, the right of a “person” entitled under a will in an unadministered estate was limited to a chose in action rather than a beneficial interest in the assets themselves that were in the executors’ hands. A chose in action is an asset. A “person” entitled under a will in an unadministered estate therefore has a valuable asset which allows them to seek due administration of the estate but does not entitle them to physical possession of the assets in the unadministered estate. Such a chose in action was transmissible which enables the person entitled to, for example, settle it on trust. But it is the chose in action not the underlying asset in respect of which the “person” entitled has rights not the underlying asset itself. As Mr Adams submits an assent is needed to pass on any beneficial interest in the underlying assets but it can be implied.

Mr Adams argues that the inchoate rights are those of beneficiaries but not those of a prospective trustee. He submits that the prospective trustees were never in the position of and could not be the “person” with the chose in action or the inchoate right.

Further whilst there may come a point during the course of the administration when a beneficiary with sufficient interest may be entitled to call for an assent, a prospective trustee has no such a right. Vicki as prospective trustee never had a sufficient proprietary interest to have standing to invoke the court’s supervisory jurisdiction to require the executors to assent the Property to her. Without an assent of property or assets the Rutland Trust could never have been properly constituted. Vicki remained a prospective trustee only and as a consequence the defendants did not have standing and were not and never could have been the Rutland Trustees and the Rutland Trust was never constituted.

I do not agree with Mr Adams. There is a clear distinction between a “person’s” beneficial interest in specific assets in an unadministered estate - whether clearly identifiable or not - and the chose in action which accrues to the person entitled when probate is obtained. The chose in action is an asset that is clearly identifiable property in which the person entitled has an interest. It is separate to any interest the person entitled asserts over a specific asset in the unadministered estate which they seek to have vested in them. The chose in action is a separate identifiable asset which exists and has value separate to the specific assets. In relation to those specified assets I agree an assent is usually required but it does not necessarily need to be express.

It seems to me therefore that if the defendants are Rutland Trustees, they have the same standing as any other “person” or “beneficiary” entitled under the terms of the will rather than qua trustees. They are not in that context any different from any other person or beneficiary entitled under the will. They would have the same rights to seek due administration of the estate by reason of a chose in action as any other “person” entitled under the terms of the will. That does not require an assent to vest property in the hands of the person entitled - in this case the Rutland Trustees. Indeed as Lord Templeman explained the chose in action was not an asset that had been the testator’s to dispose of. That chose in action was not something which the executors could be asked to assent to the person entitled to it.

Just like Mrs Kerr or Mrs Coulson, the Rutland Trustees in their capacity as beneficiaries/persons entitled would have a right to require the estate of the testator to be duly administered. As set out above “a right to require the deceased's estate to be duly administered, whereby [the trustees] can protect those rights to which [they hope] to become entitled in possession in the due course of the administration of the deceased's estate.” Re Neeld is entirely consistent with that distinction and does not assist the claimants.

If the defendants are Rutland Trustees of the Rutland Trust, they have a chose in action which gives them standing and the right to call for the due administration of the estate in their capacity as a “person” or “beneficiary” entitled to call for the estate to be duly administered under the terms of the will.

There is a separate question about whether in those circumstances the Rutland Trustees would have a sufficient interest to call for an assent of the actual property/assets to which they hope to become entitled to in possession in due course which I consider further below.