09 January 2018

Three hearings and a jail sentence


Richard Walker
Associate | UK

Personal representative’s failure to provide truthful disclosure leads to 12 months in prison.

Ms Sandhu obtained letters of administration on 12 May 2009 in her late mother’s estate. A year later her sisters issued proceedings to remove her as personal representative and to get an account of the estate administration.

In 2011 the court decided that it would not remove Ms Sandhu as personal representative provided she supply her sisters with interim estate accounts and pay her sisters' legal costs. In the 5 years following that decision the court was kept busy as a result of Ms Sandhu's unhelpful conduct and persistent non-compliance. Between 2012 and 2014 the court assessed the costs Ms Sandhu was to pay, it issued further orders against Ms Sandhu for the provision of interim accounts, and following her continued failure to pay it issued third party debt orders addressed to her bank. In 2015 and 2016 the court ordered Ms Sandhu to comply with her sisters' formal request for further information and heard Ms Sandhu's unsuccessful applications for appeal of certain orders and for the recusal of one of the judges.

Three key hearings in 2017 sealed her fate.

Hearing 1

On 30 March 2017 the court granted the sisters' application for a freezing injunction against Ms Sandhu’s worldwide assets.
Because the order was made before Ms Sandhu was given notice, the court ordered a further hearing with Ms Sandhu on 6 April 2017.

Hearing 2

At the 6 April hearing, the court ordered Ms Sandhu to disclose information about her assets and about transactions she had entered into. She was ordered to do this by 11 April 2017 and follow this up with affidavit evidence by 18 April 2017.

Ms Sandhu missed both deadlines. Ten days after the 11 April 2017 deadline, the sisters commenced ‘committal proceedings’ to have Ms Sandhu imprisoned for non-compliance with the court's order.

Hearing 3

The committal proceedings were listed for a hearing on 11 May 2017. On 10 May Ms Sandhu's solicitors provided her sworn affidavit. It was accompanied by a letter stating that the affidavit satisfied her outstanding disclosure obligations and there was no need for a hearing.
The hearing continued on 15 May and 17 May 2017. On 15 May Ms Sandhu filed further affidavit evidence.

On 17 May 2017 counsel for the sisters argued that Ms Sandhu’s breach of the disclosure order was so serious as to deserve an immediate and significant custodial sentence. Counsel argued that Ms Sandhu had failed to provide the disclosure on time or properly, and her multiple excuses were inconsistent.

Outcome

The court found that Ms Sandhu had clearly breached the disclosure order, despite the judge explaining its effect to her.
She provided the information over a month late and provided the affidavit over three weeks after the deadline.

The court considered that the situation would not have been so serious if the 10 May affidavit had properly remedied matters. It did not. It was inadequate and false. The subsequent affidavit was no better.

The court also found Ms Sandhu unapologetic and portraying a persistent lack of respect for court orders. Admitting breach did not assist her cause. Neither did a letter from her doctor referring her for an emergency mental health assessment due to her depression and suicidal thoughts on 12 May 2017. The court did not explore these matters.

Case law from the Court of Appeal holds that breaching disclosure orders in the context of a freezing injunction normally merits a prison sentence. Accordingly, the court ordered that Ms Sandhu immediately be taken into custody and jailed for 12 months.

Ms Sandhu is entitled to be released once she has served half her sentence and may apply to have her sentence reduced if she remedies her breaches.

Gibbs v David Loveday

Kimyani and others v Sandhu is not the only recent case in which the court has handed down a prison sentence to a personal representative. David Loveday, who was his neighbour's executor, frittered away more than £220,000 of her estate, leaving almost nothing for her intended beneficiaries. The court found that Mr Lovejoy was in contempt of court for failing to comply with orders to remedy the situation. It sentenced him to six months in prison.

Conclusion

Arguably, these cases provide some comfort to beneficiaries that the court will not tolerate errant personal representatives (even if it does provide them with some opportunity to remedy matters before applying the ultimate sanction of imprisonment).

Richard Walker Associate | London

Category: Article