Source: http://costsbarrister.co.uk/uncategorized/and-the-last-enemy-to-be-destroyed-shall-be-death/
Timestamp: 2019-04-24 01:04:25+00:00

Document:
Capacity to make a contract arises as in issue in costs disputes, when a paying party wishes to dispute the validity of a retainer, on the basis that it is void or unenforceable because the client lacked capacity to enter into it.
The point has been thoroughly ventilated in the context of persons who lack mental capacity, and also minors, but there are other types of incapacity.
A particular point that arises from time to time, in costs claims made by the administrators of an estate or executors who pursue litigation on behalf of a deceased person’s estate or for the benefit of their dependents under the Fatal Accidents Act 1976, is whether the costs they incur under a conditional fee agreement will prove recoverable from a paying party, when the agreement is made before letters of administration are obtained or a grant of probate made. Do they lack capacity at that time?
The question then can be summarised as whether an eventual administrator can make a valid and binding contract, on behalf of a person’s estate before assuming that role through the completion of the appropriate formalities.
Every person to whom administration of the real and personal estate of a deceased person is granted, shall, subject to the limitations contained in the grant, have the same rights and liabilities and be accountable in like manner as if he were the executor of the deceased.
The effect of section 21, if applied widely means that principles which apply to probate cases may also be the same principles which apply to administration cases. It should be noted that the concept of administration is very old, and originally descends from the ecclesiastical courts or Church courts, which in medieval times had jurisdiction over the estates of dead persons. It follows that much of the law on this subject, is antique.
But this is a rule of law, which applies to the issue of proceedings: it does not provide an answer to the contractual point as to whether a retainer can be lawfully incepted.
 It is clear that the title of an administrator, though it does not exist until the grant of administration, relates back to the time of the death of the intestate; and that he may recover against a wrong doer who has seized or converted the goods of the intestate after his death, in an action of trespass or trover. All the authorities on this subject were considered by the Court of Common Pleas, in the case of Tharpe v. Stallwood , (12 Law J. N. S., 241. See also Brooke’s Abr., Relation, 15), where an action of trespass was held to be maintainable. The reason for this relation given by Rolle, C. J., in Long v. Hebb (Styles, 341), is, that otherwise there would be no remedy for the wrong done. The relation being established for the benefit of the intestate’s estate, against a wrong doer, we do not see why it should not be equally available to enable the administrator to obtain the benefit of a contract intermediately made by suing the contracting party; and cases might be put in which the right to sue on the contract would be more beneficial to the estate than the right to recover the value of the goods themselves. In the present case, there is no occasion to have recourse to the doctrine, that one may waive a tort and recover on a contract; for here the sale was made by a person who intended to act as agent for the person, whoever he might happen to be, who legally represented the intestate’s estate; and it was ratified by the plaintiff, after he became administrator: and, when anyone acting on behalf of the intestate’s estate, and not on his own account, means to act as agent for another, a subsequent ratification by the other is always equivalent to a prior command; nor is it any objection that the intended principal was unknown, at the time, to the person who intended to be the agent, the case of Hull v. Pickersgill (1 Bro. & B. 282), cited by Mr. Greenwood, being an authority for that position. We are, therefore, of opinion, that the plaintiff is entitled to recover.
Pollock , C. B. I am of opinion that this rule ought to be discharged. Unless the conduct of the party whose  act is relied upon as binding the estate of the intestate be done by him in the character of administrator, it can have no operation upon the estate, and, accordingly, the utmost effect that can be given to the defendant’s argument is, that where a party does an act professedly intending to take out letters of administration, and afterwards becomes administrator, the administration has relation back, and gives effect to what he had done by anticipation. But if that proposition be true in point of law, this case would entirely fail upon the facts, for there was no evidence whatever to warrant the jury in finding that the plaintiff had assented. Upon considering all the facts, there is no evidence bearing out the proposition of an assent, although it is true that the plaintiff was living at the time in the neighbourhood, and was probably aware of what the parties were doing, and did not choose to interfere; yet it does not follow that he was acting in the character, or even in the assumed character, of administrator. With respect to the legal consideration of the case, the only matter adduced by the defendant’s counsel, which is in the least in his favour, is what fell from the Court of King’s Bench in Kenrick v. Burges , and which turns out to have been a mere dictum, although, no doubt, the Judges entertained that view of the question. But the modern authorities are opposed to the defendant’s arguments, and, amongst other cases, that of Woolley v. Clark may be cited.
An act done by a party who afterwards becomes administrator, to the prejudice of the estate, is not made good by the subsequent administration. It is only in those cases where the act is for the benefit of the estate that the relation back exists, by virtue of which relation the administrator is enabled to recover against such persons as have interfered with the estate, and thereby to prevent it from being prejudiced and despoiled. It was not the duty of the plaintiff, acting in the character of administrator, to assent to a legacy till he had seen all the just debts owing by the estate duly satisfied.
These being the facts Mr. Potts, on behalf of the plaintiff, made a number of submissions of law based on statements in two textbooks, Williams Mortimer and Sunnicks, Executors, Administrators and Probate 16th ed. (1982) (to which I shall refer as Williams ) and Spencer Bower & Turner, The Law Relating to Estoppel by Representation, 3rd ed. (1977), (to which I shall refer as Spencer Bower ). These textbook statements were supported by footnotes referring to old cases none of which was or could have been available to counsel and with the consent of both counsel I have subsequently read the cases concerned to ensure that they do indeed support the textbook statements.
In essence Mr. Potts submitted that letters of administration do not in general relate back to the date of death nor can estoppel operate against a party who has changed his legal personality but that letters may relate back where this would operate for the benefit of the estate. The agreement concluded between the parties in the instant case not being of benefit to the estate since the decision of the Court of Appeal in Gammell v. Wilson was indeed upheld by the House of Lords  A.C. 27, the exceptions to the general rule do not apply and consequently the agreement between Mr. Dodgson and Mr. Peacock was not binding on a subsequent administrator.
The latter being supported by Bodger v. Arch (1854) 10 Exch. 333 which I am satisfied does justify it. I pause here to observe that it is clear from that statement that although letters may not have been granted a person may act “on behalf of the intestate’s estate” and it was therefore perfectly proper for Mr. Peacock to write the letter before action “on behalf of the estate” even though he knew that there was no administrator. The third statement in Williams is at p. 430: “The doctrine of ‘relation back’ must be applied only to protect the estate from wrongful injury occurring in the interval before grant.” A statement said to be supported by Waring v. Dewberry (1718) 1 Str. 97 and again I am satisfied that it is a statement supported by the ratio in that case.
Subject to a submission by Mr. Fox to which I shall refer below and subject to one possible ambiguity these statements seem to me to support Mr. Potts’s submissions. I have however to consider whether an act done for the benefit of the estate means objectively an act which looking back is of benefit to the estate or whether it may include acts which were done subjectively for the benefit of the estate even though looking back they have not benefited the estate at all. It is perfectly clear that in arriving at his decision to conclude an agreement with Mr. Dodgson, Mr. Peacock believed that he was acting for the benefit of the estate. Indeed had the *711 House of Lords in Gammell v. Wilson  A.C. 27 decided that damages for loss of expectation of life should be a token figure never intended to rise with inflation at all and consequently should have reverted to £250 the agreement would have been of considerable benefit to the estate.
I am satisfied, looking at all the cases as a whole, that relation back only occurs where it would be beneficial to the estate for the general doctrine not to operate. The exception applies to prevent injury to the estate, and in my judgment, the approach should be a purely objective one.
I am consequently quite satisfied that the plaintiff in this case cannot be estopped from denying the validity of an act done by him in relation to the estate before he became administrator.
This latter doctrine was not challenged in principle by Mr. Fox who nevertheless submitted that in the circumstances of this case the doctrine did not apply; nor did he challenge the general validity of the submissions made by Mr. Potts. In an ingenious argument however he submitted that where there was an agreement concluded between parties one of whom later became an administrator and where the agreement was such as would permit the administrator to sue upon it, the contract could then be used by the other party as a shield even though he could never use it as a sword.
There is no doubt in my mind that Mr. Fox’s first premise is justified. Let us suppose that before any act were done by the plaintiff, subsequent to letters of administration, to deny the validity of the contract, a witness had been discovered who wholly exonerated the defendant from all blame *712 for the death of the deceased. The plaintiff could successfully have sued upon the agreement. So, submits Mr. Fox, it would be wholly anomalous if in such circumstances the defendant could not, in answer to a claim, set up the same agreement as a defence.
This argument merits careful consideration but I can find nothing in the two textbooks or in the cases which supports it. In the light of the decision in Gammell v. Wilson  A.C. 27 the agreement concluded by both parents purportedly on behalf of the estate was not of benefit to it. The judgment at first instance in Gammell v. Wilson which the House of Lords later affirmed as good law was given on 27 July 1979 which not only preceded the agreement but also the death itself. The judgments in the Court of Appeal were delivered on 1 April 1980 which also predated the agreement. It cannot be said therefore that even at the date of the agreement it was of benefit to the estate. I do not therefore have to consider the position which might arise if the act done was, at the time of its performance, of benefit to the estate but as a result of supervening events including decisions of the courts had later become injurious to the estate.
In these circumstances I have reached the conclusions first, that this agreement was not concluded on behalf of the estate by the administrator; second, that the doctrine of relation back does not operate to bind him as administrator; and third, that as administrator he is not estopped from denying the validity of an agreement entered into by him on behalf of himself and his wife; and I consequently hold on the preliminary issue that the defendant has not made out the averment of accord and satisfaction.
I regard this decision as most important: it indicates modern acceptance of the doctrine that relation back applies to contracts made by an administrator, who is not, in fact an administrator at the time they are made provided that the contract is for the benefit of the estate, as objectively assessed.
Accordingly, looking at the nineteenth century cases, and also the decision in Mills it can be convincingly argued that a conditional fee agreement drafted to take effect between the solicitors, and the person who intended to become the administrator and did indeed become the administrator, will be valid, and not void for want of capacity.

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