RE ARMAH-KWANTRENG (DECD.); ARMAH-KWANTRENG AND OTHERS v. ARMAH-KWANTRENG AND OTHERS [1968] GLR 311

DIVISION: HIGH COURT, ACCRA

DATE: 27 MARCH 1968

BEFORE: CAMPBELL J.

NATURE OF PROCEEDINGS

APPLICATION by the beneficiaries of the will of Armah-Kwantreng to remove the executor-trustees for misconduct. The facts are fully set out in the ruling.

COUNSEL

Koi Larbi for the applicants.

D. Antwi for Narayan for Kate Kwantreng.

A. W. Acquaah for the executor-trustee.

T. K. Sey for the Administrator-General.

[p.312] of [1968] GLR 311

JUDGMENT OF CAMPBELL J.

This is an application brought by Dorothy Armah-Kwantreng under sections 11 and 14 of the Public Trustee Ordinance, 1952 (No. 24 of 1952), for the removal of the existing executor-trustees of the will of Kwamla Armah-Kwantreng, deceased, and for the appointment by way of substitution of the Registrar-General as Public Trustee. The latter having been served with the motion on notice, appeared and informed the court that he would have no objection to undertaking the administration of the estate and the trusts created therein in the event of the present trustees being removed subject to the usual inventory and accounts being rendered by the outgoing trustees. Associated on the record with the applicant are Margaret Welsing, Kate and Alice Armah-Kwantreng, all of whom are children of the deceased and beneficiaries under his will. Kofi Armah-Kwantreng, another child beneficiary, though not officially on the record, appeared in court and has not registered any objection. Mary Amassah, another child beneficiary is dead, but her son Nii Laryea Armah-Kwantreng having been adopted by the deceased testator as his own son, and made a direct beneficiary under his will, is represented by his attorney S. A. Allotey in opposition to the application; Elizabeth Armah-Kwantreng, another child beneficiary, is not officially recorded as either for or against the application, it is not known by the court whether she is alive or dead. To understand the reason for this application, it is necessary to consider certain provisions of the will of the testator a copy of which was annexed as exhibit A to the applicant’s motion papers. The testator executed his will in May 1954 and died without revoking the same on 24 June 1957. In the will, George Gad Hansen, John B. Armateifio and Nii Laryea Armah-Kwantreng were appointed his executors and trustees, the first two duly obtained probate of the will on 10 February 1958 and the other, who was overseas at the time of death of the testator, returned to Ghana in late 1963, and having on 13 December 1963 obtained double probate of the will, executed on the same day, a power of attorney in favour of S. A. Allotey his step-father, ostensibly to administer the trust estate and thereafter returned overseas where he has remained ever since. The salient provisions of the will in so far as they are pertinent to this application are summarised as hereunder:

(a) The executor-trustees, should they prove the will and accept the trusteeship, are to receive a monthly remuneration of £G5 after an initial £G1,000 has been collected by way of rents from stores in Beach Avenue, Accra, and deposited in the bank;

[p.313] of [1968] GLR 311

(b) The executor-trustees were enjoined to maintain their number always at three and not below;

(c) Pecuniary legacies ranging from £10 to £G5 per month were to be paid to the testator’s children, namely, Kate, Mary, Margaret, Dorothy, Alice, Elizabeth and Kofi Armah-Kwantreng for their respective lives, such payments subject to the payment of debts of the testator including testamentary and funeral expenses and the accummulation of, and deposit in the bank of £1,000 from rents of stores, were to commence from the date of his death.

(d) The testator’s house and stores at Beach Avenue which by consensus is D.762/4 were devised to the executor-trustees for use, as to the house, as a residence for his children including Nii Laryea as enumerated by him, and as to the stores, to be rented, and the rents deposited in bank to an account designated the Armah-Kwantreng Scholarship Fund. The house was directed never to be mortgaged or sold;

(e) The scholarship fund so established was to provide Nii Laryea with a medical education with alternative provisos, namely, that should he successfully qualify in the medical profession, the costs and expenses of his education should be refunded by him in instalments to be agreed upon by the executor-trustees, or should he fail to enter the medical profession by reason of his inability to pass examination he should be allowed to choose his own calling but would then receive an annuity of only £120 payable at the rate of £G10 per month. Other grand-children from generation to generation were also to be provided with professions if their parents were unable to meet the expenses of the same and were to be subject to the same conditions as governed Nii Laryea.

(f) All other real and personal properties, except personal effects and tools of his vocation specially dealt with, were devised and bequeathed by the testator to his children and their heirs excluding a son Kwamla Armah-Kwantreng Jnr.

(g) Disputes arising from occupation by the children of the house devised to the executor-trustees were to be adjudicated upon by arbitrators to be appointed by the executor-trustees with serious consequences to any child or children found to be at fault.

The applicant in her supporting affidavit stated that Nii Laryea though an executor-trustee of the will has remained outside Ghana for many years and requests by her for information as to his progress in his medical education had not been satisfactorily answered; that

[p.314] of [1968] GLR 311

S. A. Allotey the step-father of Nii Laryea is virtually the sole administrator of the estate as George Gad Hansen is incapable of acting effectively due to age, occasional nervous break-down with consequential impatience, touchiness and excitability; that S. A. Allotey in administering the trust of the estate seeks only the interest of himself and his step-son Nii Laryea at the expense of the other beneficiaries and to the detriment of the trust; that despite substantial remittances to Nii Laryea and his children, no pecuniary legacy has been paid to the beneficiaries thereof since the death of the testator; that despite these remittances to Nii Laryea and his children the resident co-trustee George Gad Hansen has collected rents from the residuary estate, namely, house D.762A/4 and remitted the same to Nii Laryea, and also acquiesced in the payment of a total of £G1,680 from the said property into Nii Laryea’s private account even though he well knew that this property was devised to all the testator’s children and was not the property of Nii Laryea alone; the applicant in the premises accused the co-trustee George Gad Hansen with conduct savouring of want of honesty and want of reasonable fidelity if not devastavit, and that the continuance in office of the trustees would be detrimental to the proper execution of the trust. These are no doubt serious accusations levelled against the trustees and there can be no doubt that there is at present open hostility between them and all the beneficiaries save and except Nii Laryea whose conduct is also impugned, and perhaps Elizabeth Armah-Kwantreng. As I understand it, the trustees have brought an action for an account against Kate Armah-Kwantreng while some other beneficiaries have sued the trustees for an account of their administration. This is, to say the least, a very unhealthy situation indeed.

The executor-trustees have opposed the application for their removal. It is not certain whether they were advised to relinquish the trust in view of this open friction and hostility. If they were not I am of the opinion that it is to be regretted; if they were, and refused the advice, it is the more to be regretted; in this respect I can do no more than quote from Lord Blackburn as to the appropriate thing to do, when delivering the Privy Council judgment in Letterstedt v. Broers (1884) 9 App.Cas. 371 at p. 386. He said:

“As soon as all questions of character are as far settled as the nature of the case admits, if it appears clear that the continuance of the trustee would be detrimental to the execution of the trusts, even if for no other reason than that human infirmity would prevent those beneficially interested, or those who act for them, from working in harmony with the trustee, and if there is no reason to the contrary from the intentions of the [p.315] of [1968] GLR 311 framer of the trust to give this trustee a benefit or otherwise, the trustee is always advised by his own counsel to resign, and does so. If, without any reasonable ground, he refused to do so, it seems to their Lordships that the Court might think it proper to remove him; but cases involving the necessity of deciding this, if they ever arise, do so without getting reported. It is to be lamented that the case was not considered in this light by the parties in the Court below.”

The executor-trustees instead of hearkening to the words of the learned Lord have strenuously opposed the application. They opposed it at first on the technical ground that executors could not be removed under section 14 of the Public Trustee Ordinance, 1952, but this was later abandoned having regard to leave being granted to amend the application to bring it under both sections 11 and 14 of the said Ordinance. They later opposed the application on the grounds that the issue whether or not pecuniary legacies were paid was a matter of distribution which presupposes that administration is complete, the latter is the proper function of executors and the court cannot substitute its will for that of the executors so long as they are carrying out their functions. Counsel has not been able to establish that the administration of the estate in the sense of paying the lawful debts of the testator has not been completed, in fact the accounts tendered in evidence, namely, exhibits 2A and 2B which they themselves accept as correct, show clearly that the executors have assumed the role of trustees, if this were not so, they would not themselves be entitled to claim and actually draw their honorarium which is only payable on their assumption of the trusteeship as provided for in clause 1 of the will. Further by section 2 of the Public Trustee Ordinance, 1952, “trust” includes “executorship.” Therefore the powers conferred by sections 11 and 14 apply equally to executorship as to trusteeship and whether the administration aspect of their work is complete or not. The executor-trustees further oppose the application on the ground that the payment of rents from house D.762A/4 had nothing to do with them as this property was not within their trust; no doubt this is so, but on that very score they ought not to have assisted Nii Laryea a co-trustee to collect and appropriate to himself the rents and profits accruing from this building knowing that the same was devised to all the children. The act of Nii Laryea was clearly dishonest and the fact that house D.762/4 from which he should have been maintained was wrongfully appropriated by Kate Armah-Kwantreng, is no justification for the executor-trustees acting in concert to penalise other beneficiaries by depriving them of their patrimony in [p.316] of [1968] GLR 311 respect of the residuary estate when they had done nothing to merit this course of conduct. As trustees, the respondents had a duty to inform the beneficiaries of their rights in respect of this house, they failed to do so, and thereby conduced to and actively assisted Nii Laryea in his dishonesty as admitted in their affidavit in opposition.

The executor-trustees in justifying their non-payment of legacies to the beneficiaries, claim that house D.762/4 which was the sole income earner was appropriated by Kate Armah-Kwantreng and that it only returned to the trust in November 1962. This submission in my opinion highlights the lack of prudence shown by the executor-trustees despite the fact that the estate had a solicitor thereto from as early as June 1958; a prudent man of business mindful of his duties to the estate would certainly have instituted action for a declaration of title to the house by virtue of the devise in the will, and apply for the appointment of a receiver of the rents pending the determination of the suit; had the executor-trustee George Gad Hansen done so, there would now be no necessity for involving the estate in the legal expenses of bringing a suit for account against Kate Armah-Kwantreng. By their lack of prudence, if not gross ineptitude, they have caused a loss to the estate of the rents and profits which accrued prior to the determination of the suit involving this house. Notwithstanding this exclusive appropriation of house D.762/4 by Kate Armah-Kwantreng, the executor-trustees have failed hopelessly to establish any good reason why pecuniary legacies were not paid between November 1962 and the present; in the accounts to 31 March 1966, rents collected amounted to £G5,500, and in the accounts to 31 March 1967 rent collected amounted to N¢4,862; over the same periods Nii Laryea, his children and sister were remitted a total of £G871 and N¢1,021 respectively despite the fact that he was at the same time dishonestly receiving the entire rents from house D.762A/4; the other beneficiaries received nothing apart from two payments of £G57 and N¢30.00 to Alice Armah-Kwantreng and her children; Dorothy Armah-Kwantreng was lent the lordly sum of £G40 and Kate had debited to her, the sum of £G500 which was paid off on the mortgage of the house D.762/4 which the executor-trustees in breach of the trust, and by their inaction, allowed to be mortgaged. The executor-trustee himself over the period withdrew £G252 by way of honorarium. In my opinion the applicant and those associated with her would have to be angels not to complain of this mode of administering the trust; there can be no doubt that the only persons who were really deriving benefits from the trust were Nii Laryea, his children and his sister who was also a step-daughter of S. A. Allotey. The partiality [p.317] of [1968] GLR 311 for these beneficiaries to the detriment of the trust and the welfare of other beneficiaries is amply established in this case.

Counsel for the executor-trustee seeks to establish that S. A. Allotey’s role was essentially circumscribed having regard to the power of attorney executed in his favour which was tendered as exhibit 1. This may be so, but it does not answer the question why the executor-trustee George Gad Hansen and the attorney for Nii Laryea have failed to comply with the clear directions in the will that their number should always be kept all to three. The testator must have had a good reason for so directing. Nii Laryea is himself a beneficiary and in his capacity as a co-trustee would not likely be in favour of ceasing to be a professional medical student, much less of refunding the cost of his education should he be successful in entering the medical profession. In the absence of another trustee I cannot see how any decision could be reached affecting him adversely, as he could always create a deadlock by vetoing the decision of a sole additional trustee; again if a dispute arose over the occupation by him as a beneficiary of house D.762/4 I cannot see how arbitrators not favourably disposed to him could ever be appointed if he and another were the only two executor-trustees. It is not unreasonable to predicate that the testator must have envisaged situations like these, leading to the clear direction as to the minimum number of executor-trustees. In breach of this clear direction we find a situation where from 1957 to 1960 there were only two executor-trustees, from March 1960 to December 1963 there was only one, and from December 1963 to the present only two with one of them continuously resident abroad and deputing his own step-father to act for him. This state of affairs in my opinion justifiably engendered distrust and opened the way for an administration of the estate in favour of Nii Laryea and against the interest and welfare of the other beneficiaries and to the detriment of the estate. It is inexplicable why with the benefit of a solicitor to the estate this breach of trust was permitted to continue even to this day. The executor-trustees in their affidavit have sworn to their awareness of the desirability and necessity for keeping proper accounts. It is rather unfortunate that they never lived up to their awareness. Between 1957 and October 1963 it is evident that no proper accounts were kept; the statement of account submitted for this period is clearly indicative of a novice’s attempt to embark in a field in which he neither has the innate aptitude nor the training. It does not disclose the assets of the estate including balances at bank nor does it reflect any analysis or differentiation of the alleged disbursements contained therein. It is designed to conceal rather than reveal anything about the estate to the beneficiaries. It is clear [p.318] of [1968] GLR 311 that it was only in 1966 that any attempt at preparing accounts was ever made perhaps due to the growing pressures from beneficiaries legitimately dissatisfied with the mode of operation of the trust of the estate.

The executor-trustees have also without any just excuse shown remarkable reluctance in providing the applicants with particulars of Nii Laryea’s education. In my opinion they were entitled to all reasonable information touching on matters of the trust; whether or not Nii Laryea was undergoing medical training was of vital concern to other beneficiaries, since on this question depended the issue whether he was entitled to be maintained out of the estate or alternatively only entitled to receive an annuity of £G120 for his life.

On the whole of the evidence contained in the affidavits of the applicant and the respondent and after hearing submissions by counsel for the respondent I am satisfied that the applicant has established a case of misconduct against the executor-trustees characterised by their collusive dealings with house No. D.762A/4 for the benefit of Nii Laryea exclusively. She has further established an unjustifiable partiality for Nii Laryea and his children by the executor-trustees while at the same time turning a blind eye and a deaf ear to the legitimate demands of other beneficiaries to be paid even a modicum of the pecuniary legacies to which they are entitled; the executor-trustees in my opinion are equally guilty of a breach of trust in failing to carry out the testator’s directions as to maintaining their number at not less than three, and also in failing to keep proper accounts of the estate for the period 1957 to October 1963. They further misconducted themselves by refusing to give reasonable information regarding Nii Laryea’s course of studies. They have shown a lack of reasonable fidelity in carrying out the trust which they have assumed and with the present hostility existing between them and the majority of beneficiaries arising from this mode of administering the trust, I am of the view that their continuance in office would be detrimental to the trust and against the interest and welfare of the majority of the beneficiaries, the concern for whom must always be the paramount consideration of the court in determining whether or not to remove trustees. In the circumstances I hereby order the removal of George Gad Hansen and Nii Laryea Armah-Kwantreng as executor-trustees of the estate of Kwamla Armah-Kwantreng, deceased, in exercise of the powers conferred by section 11 of the Public Trustee Ordinance, 1952, and do hereby appoint the Registrar-General as Public Trustee in place of the executor-trustees so removed, with a further order that the said Public Trustee, on demand, shall have transferred to him, for due administration, the estate of the aforesaid deceased with [p.319] of [1968] GLR 311 an inventory of all assets constituted in the estate at the time of death of the testator and account of their administration by the removed executor-trustees from this date to the date of transfer to the Public Trustee. The taxed costs of the applicant shall be payable out of the estate of the deceased with the respondent bearing his own costs of this motion.

DECISION

Application granted.

S. K. T.