Analysis
The will of the late Gladys Townsend contained at clause 11 a charging clause, the relevant part of which was couched in the following words:
‘MY TRUSTEES shall have the following powers in addition to their powers under the general law or under any other provisions of this Will or any Codicil hereto… (g) for any of my Trustees who shall be engaged in any profession or business [to] charge and be paid (in priority to all other dispositions herein) all usual professional and other fees and to retain any brokerage or commission for work or business introduced transacted or done or time spent by him [or] his firm in connection with the administration of my estate or the trusts powers or provisions of this Will or any Codicil hereto including work done or business outside the ordinary course of his profession and work or business which he could or should have done personally had he not been in any profession or business.’
A dispute arose as to whether an erstwhile executor, the appellant, had been entitled to charge under this clause for her time in administering the estate. The central issues were:
- (a) whether the charging clause provided that any of ‘my Trustees’ (which includes executors) who happen to be engaged in a profession or business can charge for all work done or time spent on the administration of the estate, irrespective of whether that had any connection with their profession or business or whether they can only charge for services rendered to the estate in the course of their profession or business; and
- (b) whether the executor could demonstrate that fees she had charged were for work performed in the course of her business.
At first instance, the Deputy Master decided that the narrower view was correct, saying that the administration time spent had to be part and parcel of the relevant business, and concluding that the evidence concerning the nature of the profession of the executor did not allow him to reach the view that she had been acting in the course of her business when administering the estate. This decision was appealed to a Deputy Judge of the High Court (Da Silva v Heselton & ors [2021]), who dismissed the appeal, concurring in the view that an executor could only charge for work done or time spent in the administration of the estate if that work fell within the scope of their profession or business in question. The Deputy Judge also found that the question as to whether the work carried out by the executor had fallen within the scope of her profession or business had been determined by the Deputy Master, and that there was no basis on which he could interfere with this finding.
This case was an appeal against the Deputy Judge’s judgment, relating to the same point of construction, and to the decision by the Deputy Judge that the Deputy Master at first instance had already determined that the work carried out by the executor was not within the scope of her profession. It was said that the Deputy Judge had adopted a different test to the Deputy Master as to whether the work was chargeable, and for this reason was required to re-evaluate whether the evidence met the new test which he had adopted. The Deputy Judge had not done so.
Held:
The appeal would be dismissed on both points. On its true construction, the clause permitted charging by an executor who is engaged in a profession or business for their time spent or work done in connection with the administration of the estate only if the time is spent or the work is done in the course of that profession or business. The Deputy Judge was right to say that the natural meaning of the words ‘to charge and be paid… all usual professional and other fees’ is that a professional can charge their usual professional fees for work that they perform in the course of that profession, and not for the performance of work which has nothing to do with their profession.
The fact that the clause allowed the executor to charge for time spent as well as work done did not allow the executor to charge their ordinary hourly rate for time spent, where that time was spent in the performance of work having nothing to do with their profession since, on this reading, the clause would be unworkable for anyone without a usual hourly rate (for example, professions typically remunerated on a commission basis) and since, in any event, a professional’s usual hourly rate will be an hourly rate for work done in the course of their profession. They would have, in truth, no usual hourly rate for work which forms no part of their business or profession. This sub-clause of the charging clause did, as the District Judge had held, indicate that the clause was aimed only at allowing those who are engaged in a profession or business to charge their usual fees for work done in the course of that profession or business.
Such a reading was supported by good sense. It would make no obvious sense for the estate to pay an executor for work that they carry out in which they have no relevant professional skill or business experience. It would be eccentric for a testator to provide that their executors should be remunerated if they happened to be engaged in a profession such as dentistry or a business such as market trading that was of no conceivable relevance to the administration of the estate, but not for the same work if they were not ‘engaged in any profession or business’, however relevant their experience.
Nor did the words ‘including work done or business outside the ordinary course of his profession’ allow for charging for work which was outside the course of the executor’s profession altogether. These words were intended to allow, for example, an executor who is a surveyor and whose practice consists of valuing commercial property, to charge for their work in valuing the testator’s residence for sale, if this was performed in connection with the administration of the estate, even though valuing residential property is not what they ordinarily do. The words ‘work or business which he could or should have done personally had he not been in any profession or business’ were intended to allow, for example, a solicitor executor to charge for work which might have been done by any executor in a lay capacity, for example attendances of an assorted nature. Such services would still be within the course of such an executor’s profession or business to the extent that it consisted at least in part in the administration of estates. The Deputy Judge had been right to conclude that these words did not permit a person who is not providing services in the course of their profession or business to charge.
Although authorities on the construction of charging clauses in other wills needed to be handled with care, support for these conclusions could be drawn from the previous case of Clarkson v Robinson [1900], in which a very similar charging clause had been held not to permit charging by an executor for work performed outside their profession.
The ground of appeal alleging that the Deputy Judge had adopted a different test to the Deputy Master, and hence needed to re-evaluate the evidence in light of this test, would also be dismissed. The test which the Deputy Judge had adopted was indistinguishable from the test which the Deputy Master had adopted. Although it was suggested that the Deputy Judge’s comment that:
‘a trustee or executor can rely upon the charging clause in the Will to charge for work done or time spent in the administration of the estate only if that work falls within the scope of their profession or business in question; that is to say if it is work of a type which would attract or incur their usual professional fees’
entailed that he was adopting a different test, ie whether the work was such as to attract usual professional or other fees, the Deputy Judge would not have thought this was any different to the original test. Since the appellant had not satisfied the Deputy Master that her activities in administering the estate were in the course of any business of hers, it followed that the work was not such as to attract her usual business charges either.
JUDGMENT LORD JUSTICE NUGEE: Introduction [1] This second appeal concerns the effect of a charging clause in a will. [2] I will set out the clause in question straightaway. It is found in clause 11 of the will of Ms Gladys Townsend. The relevant part of this clause reads as follows: ’MY TRUSTEES shall have …Continue reading "Da Silva v Heselton & ors [2022] WTLR 1229"