QUESTIONS

1. What is the test to satisfy a claim for “maladministration” of the estate?

2. Would simply the failure to ascertain all debts and having distributed the estate be
sufficient to establish the maladministration or devastavit and therefore make the
personal representative liable for unsettled debts?

BRIEF ANSWER

1. Based on this research, the law does not lay out any tests to satisfy a claim for
maladministration. For example, in our situation, it is sufficient to show that one of
the devastavit is formed i.e. an executor has paid obligations of an inferior degree
ahead of a superior one; where, for example, he has paid legatees ahead and to the
detriment of creditors (This can be shown in Re Yorke (refer below)).

2. Based on my understanding of this research, failure to ascertain all debts could

amount to a breach of trust (as an executor) as it is one of the primary duties of an
executor (with reference to the previous research). A violation of his (executor’s)
duties is termed as a “devastavit”. (This can be shown in Re Marden (refer below))

ANALYSIS

WHAT IS MALADMINISTRATION OF ESTATE AND HOW TO SHOW

MALADMINISTRATION?
1. According to 17 Halsbury’s Laws of England, 4th Ed i.e.

a. Para 1542 i.e. “A personal representative in accepting the office accepts the duties
of the office, and becomes a trustee in the sense that he is personally liable in equity
for all breaches of the ordinary trusts which in courts of equity are considered to
arise from his office. The violation of his duties of administration is termed a
DEVASTAVIT; this term is applicable not only to a misuse by the representative of
the deceased’s effects, as by spending or converting them to his own use, but also acts
of maladministration or negligence.”

b. Examples of personal representatives’ acts of maladministration in para 1543 i.e.

i. “A personal representative commits a devastavit if, where there is a deficiency
of assets, he pays debts otherwise than in their due order to the prejudice of
preferred creditors known to him, if he makes payments to legatees without
providing for debts or for calls upon shares which have not been fully paid up,
or if he applies the assets in payment of claims which he has no right to satisfy.
The representative’s duties to get in the estate and invest money in hand have
already been considered; a breach of such duties amounts to a devastavit. An
executor is also liable for paying a legatee a sum greater than is warranted by
the existing state of the assets, but he will not be disallowed a payment made to
one of several residuary legatees, because through a subsequent decrease in the
 value of the assets such a residuary legatee may have received more than the
other residuary legatees.”

2. According to 5D Words, Phrases & Maxims by Anandan Krishnan, Lexis Nexis,

“devastavit” is defined as “loss suffered to the state of a deceased person by the
negligence of the executor or administrator. It is the mismanagement of the estate of a
deceased person in squandering and misapplying assets contrary to the duty imposed
on the executor or administrator.”
a. “For example, an action for devastavit may be brought by a beneficiary or creditor
if an executor disposes of estate property for an undervalue; makes an unauthorised
distribution before satisfying creditors’ claims or pays out in full a legacy which was
subject to abatement. “
b. A personal representative who is sued as such for damages and fails to plead
either plene administravit or plene administravit praeter may find himself, if the
plaintiff cannot satisfy the judgment out of the testator’s estate in the hands of the
personal representative, personally liable for the balance.

3. Taylor v Taylor (1870) LR 10 Eq 477 (Court of Equity) *This case was not cited in any
Malaysian cases.
a. FACTS
i. The testator possessed 20 shares in Leeds Banking Company. He bequeathed
200 pounds to Elizabeth (the legacy).
ii. The testator died and his debts and the legacy were paid by the executors
without setting aside any sum to answer the contingent liabilities, the banking
company being then a going concern.
iii. The banking company was ordered to be wound up and the shares belonging
to the testator had not been disposed of; but the testator’s estate was
insufficient to pay the calls.
iv. The official liquidator now applied for an order against the executors, making
them liable to pay in discharge of calls the sum of 200 pounds which they had
already paid to the legatee.
v. The question in this case was, whether the executors of a deceased
shareholder in the Leeds Banking Company, which was wound up after the
testator’s death and the distribution of his assets, were liable to pay, in
satisfaction of calls, a sum which they had already paid to a legatee under the
testator’s will.
b. JUDGMENT
i. It was held that the executors were liable to pay the amount of the legacy in
satisfaction of calls.
ii. (as per Lord Romilly MR) The executors had committed a breach of trust in
paying the legacy without providing for the liability attaching to the testator’s
estate at the time of his death in respect of these shares. The amount must be
paid to the official liquidator.
4. Bewley’s Estate, Re Jefferys v Jefferys (1871) 19 WR 464 **Could not find the full
judgment for the case therefore this analysis is based on the Case Overview [English
court pre-dating November 1874]
a. This case applied Taylor v Taylor (supra).
b. FACTS:
i. Testator, who had been a shareholder in a company, but had before his death
been released from all liability in respect of his shares in consideration of a
certain payment, by his will gave certain legacies, which his executors duly
paid.
ii. The company afterwards endeavoured to set aside the release, and they failed
in the 1st instance, but on appeal succeeded in setting aside the release.
c. HELD:
i. The executors were personally liable to refund the amount paid to the
legatees, to meet the calls made upon testator’s estate in respect of the shares.
ii. The rule that an executor who pays a legacy is personally liable to pay the
amount of the legacy to any creditor of testator whose claim is unsatisfied,
whether he had notice or not of the claim, applies to a case in which the
creditor has given testator what purports to be a release of his claim, and the
executor bona fide believes the release to be valid, and the creditor does not
question its validity till some years after the executor has paid the legacy, fails
in the first instance, but succeeds in setting aside the release on appeal.

5. Re Marsden; Bowden v Layland; Gibbs v Layland [1881-85] All ER Rep 993

[Chancery Division]
a. FACTS
i. An executor of a deceased mortgagor distributed the assets of the estate
among the legatees without providing for the mortgage debt, which he (the
executor) had previously acknowledged.
ii. The mortgagees brought an action against the executor.
iii. One of the issues considered was that whether the executor or either of them
had committed any devastavit in distributing the estate to beneficiaries while
certain secured debts were unsatisfied.
b. JUDGMENT
i. An executor was personally liable in equity for all breaches of the ordinary
trusts which, in courts of equity, were considered to arise from his office, and
where an executor had acknowledged a debt, it was a breach of trust to pay
the assets to the legatees leaving a debt unpaid.
ii. [page 997] … where an administrator or executor accepts that office, he
accepts the duties of the office, and he becomes, in the language of Williams
of Executors (8th Edn) p 1803, a trustee in this sense: “An executor is
personally liable in equity for all breaches of the ordinary trusts which, in
courts of equity, are considered to arise from his office.”
iii. [page 997] What is the ordinary trust when an executor acknowledges a debt
and pays interest upon it? Is it not to preserve the assets for payment of that
creditor so far as there are assets, and to take care not to dispose of the assets,
either by putting hem into his own pocket, or by paying them away to the
 legatees, or by otherwise committing a devastavit? Most certainly it is; and in
equity the executor is bound, by a most direct trust, to apply them in the due
course of the administration of the estate for the creditor he has
acknowledged.
iv. Made reference to Turner VC in Fordham v Wallis i.e. “… The payment over to
them by the executors, while the debts were unpaid, was an absolute and
unqualified breach of trust.”
v. [page 997] Breach of trust as regards whom? Of course, a breach of trust as
regards the creditors for whom they were trustees Having accepted their
office, and the creditors being bona fide creditors, the trustees were bound to
apply the assets to the payment of their debts before they handed over
anything to the residuary legatees.

The case below shows that when the personal representative distributed the assets to the
beneficiaries first instead of the creditors. The personal representative will be personally
liable. If the personal representative hope to protect him/herself from personal liability,
he/she could ask from the court for directions/decree for retention. This case also did a
comparison with Taylor v Taylor (supra) in which in this case, retention was not made by
the executors therefore, they were personally liable for the calls.
6. Re Yorke (deceased); Stone and another v Chataway and another [1997] 4 All ER
907 [Chancery Division]
a. FACTS
i. The plaintiffs were the executors of Y.
ii. Having settled the debts and liabilities of Y’s estate, other than the
unascertained or contingent liabilities, the plaintiffs wished to complete their
administration by distributing the residue.
iii. However, they wished to be sure that distribution would not involve them in
personal liability should creditors in respect of Y’s position as a name emerge.
iv. The plaintiffs applied to the court for directions as to whether, given the
protection of Equitas (a reinsurance group), they were under the duty to
distribute to the remaining beneficiaries without any retention and free of all
risk of personal liability; or whether they should retain something (and, if so,
how much and for how long) against the emergence of claim or claims against
Y’s estate.
b. JUDGMENT
i. [page 907-908] If a creditor sues an estate where there has been a
distribution such that the executor has insufficient funds left to meet the
creditor’s debt then the executor is able to answer that he has already duly
administered the estate (plene administravit). If the creditor is not satisfied
that the administration of the estate in question had truly recognised the due
order of priority and wishes to purse the matter then the burden is upon him
to prove a devastavit…
ii. [page 908] Amongst the various possible forms of devastavit is that which
occurs where an executor has paid obligations of an inferior degree ahead of
 a superior one; where, for example, he has paid legatees ahead and to the
detriment of creditors. Where such a devastavit is provided, the executor
concerned becomes personally liable in respect of the assets so misapplied.
He may be liable for interest thereon. He is also very likely to become
personally liable to the creditors in respect of costs.
iii. [page 908] Such a claim against an executor is not the only remedy open to an
unpaid or underpaid creditor; he may also sue the overpaid beneficiaries, but
such a claim is available and only open to him if and to the extent that he is
without remedy against the wrongdoer executor. Executors are entitled to
look to the persons to whom they have made distributions for a refund or an
indemnity in respect of their overpayment.
iv. [page 918] … if an executor distributed to a lower class without the absolute
certainty that he would have in hand funds to meet the superior one he could
be liable even if at the time of his distribution to the lower class he had
honestly and reasonably believed that sufficient funds to pay the superior
class would come to hand. Spode v Smith (1827) 38 ER 667
v. [page 921] … Where retention was ordered by the court (or fixed by the court
as to its amount and then paid by agreement between the parties), that the
position thus arrived at was intended to give executors total protection
against any devastavit on account of a premature distribution to legatees or
others of degrees inferior to that of the contingent creditor concerned.
vi. [page 922] compared Taylor v Taylor (supra) in which in this case, the
executors did not make any retention against the possibility of a call in the
estate

7. Re Seah Liang Seah (Deceased) [1937]1 MLJ 245 [Original Civil Jurisdiction;
Singapore]
a. FACTS
i. A claim was made against trustees of an estate that they had neglected their
duty by failing to recover debts due to the estate by reason of which failure
any claims against the debtors became barred by limitation and that the
trustees or their estate were liable therefor.
ii. The trustees were also beneficiaries and the applicant (another trustee)
sought to retain the beneficial interest of the beneficiary-trustees so far as
was required to make up the loss to the estate caused by the alleged breach
of duty
b. JUDGMENT
i. A claim against trustee beneficiaries to retain the share of the trustee-
beneficiaries in the estate must be a claim in respect of a debt which he owes
the estate. It does not apply to the trustee beneficiaries liability for devastavit
until such claims have been established.

8. Re K (deceased) [2007] All ER (d) 473 (Mar) [Chancery Division] *made reference
to Re Yorke (supra)
a. FACTS
 i. Following the deceased’s death, an order was made in appointing the
applicants as administrators of the deceased’s estate. (1st administrator –
deceased’s widow; 2nd administrator – solicitor)
ii. There were claims from various creditors, which the administrators
subsequently admitted or partially admitted.
iii. There were also a number of potential creditors who had commenced various
proceedings.
iv. The administrators applied for the court’s sanction to pay certain admitted
creditors and then to distribute the deceased’s estate to the beneficiaries
without reference to the claims of the potential creditors.
v. An issue arose whether any, and if so what, protection had to be afforded to
the potential creditors.
b. JUDGMENT
i. In cases where the cause of concern was a series of disputed and stale claims
against the estate, the court should consider whether any, and if so what,
protection should be afforded to the potential creditors. Such protection
could the form of retention, an indemnity from the beneficiaries or insurance.
The court would take a practical view and might in an appropriate case
conclude that no protection beyond the personal liability of the beneficiaries
was needed. Even if the court concluded that a greater degree of protection
was required, it was not bound to protect the potential creditors in respect of
the full value of their claims.
ii. Made reference to Lindsay J in Re Yorke i.e.
1. … if the case was that where an executor during his administration knew
of no likelihood of any contingent debt maturing he could, by having an
account taken in court of all known liabilities, obtain a decree which
permitted him to distribute to legatees without making any retention but
which none the less gave him complete freedom from devastavit.
2. Conversely, if, during an administration some real possibility of some
contingent debt maturing came to the executor’s notice, the executor
could, either of his own volition or under the guidance of the court, retain
a sum out of the estate against that risk or seek security direct from the
prospective recipient beneficiary.