Nathan James Smith & Ors v Ian Patrick Campbell & Ors

Deputy Master Holden: Introduction

1. This is a claim to replace the trustees of the trust established by the will of the late Graham Cheslyn-Curtis, whom I will refer to in this judgment (without intending any disrespect to the deceased) as Graham.

2. Graham dedicated much of his life to the success of his business, the Millpledge Group (‘ Millpledge ’). Millpledge is comprised of a UK group holding company – Millpledge Group Limited – and a variety of subsidiary companies in the UK and overseas. Millpledge is in the business of sourcing and supplying medical products, principally to the veterinary sector. It was co-founded by Graham and his business partner, the late Derek Carthew (known as ‘Slim’), in the late 1970s.

3. At some point, Slim “ cashed out ” of the business, selling his shares to Graham. But Graham never cashed out. He continued to dedicate such time and energy as was available to him to the business right up until his death, which sadly occurred on 22 February 2018 from pancreatic cancer, at the age of 69.

4. At the time of his death, Graham was the sole owner of Millpledge, the probate value of which was around £6.8 million. Graham also owned several valuable residential and commercial properties, chattels, and cash at bank. The total net probate value of his estate was around £8.2 million.

5. By his last will dated 26 February 2016, Graham appointed the Defendants to be his executors and trustees. I will refer to the Defendants in this judgment collectively as the ‘ Trustees ’. I address the identity of the Trustees in more detail at paragraphs 16 – 18 below, but in short they were a combination of Graham’s trusted business advisers – the First Defendant, Ian Patrick Campbell (known as ‘ Paddy ’); and the Second Defendant, Malcolm Taylor (‘ Malcolm ’) – and family members – the Third Defendant, Graham’s sister, Sarah Cheslyn-Curtis (‘ Sarah ’); and Graham’s partner’s brother, Maldwyn Worsley-Tonks MBE (‘ Maldwyn ’).

6. Graham left his residuary estate to his Trustees to hold on the terms of a discretionary trust (which Graham referred to as “ The Whinleys Trust ”, but which I refer to in this judgment simply as the ‘ Trust ’) for the benefit of the Claimants – being his long-term partner, the Third Claimant, Suzanne Smith (‘ Suzanne ’); and Suzanne’s children, the First Claimant, Nathan Smith (‘ Nathan ’) and the Second Claimant, Leah-Jane Styring (‘ Leah ’) – as well as for his son, Guy Cheslyn-Curtis (‘ Guy ’), and for the issue of Nathan, Leah, and Guy.

7. Graham conferred broad dispositive and administrative powers on his Trustees, but he also wrote a detailed letter of wishes indicating how he wished them to administer the Trust. In that letter, Graham set out a comprehensive vision for the future of Millpledge. At the final hearing the parties referred to this as Graham’s “ worldview. ” What Graham wanted to happen was for Nathan and Leah to be directors of Millpledge. He wanted Paddy and Malcolm to “ tutor and mentor ” them in that role. He wanted much of the profit generated by the business to be re-invested into its future success. In particular, he wanted Nathan and Leah to consider re-investing their share of the profits paid to them as directors back into the business. He wanted the business to flourish in the longer term under the stewardship of Nathan and Leah, just as it had under his.

8. Unfortunately, Graham’s worldview has not come to pass. On the contrary: since Graham’s death there has been a comprehensive breakdown of relations, culminating in Nathan and Leah being removed as directors and dismissed as employees of Millpledge. Shortly after Nathan’s dismissal, the Claimants brought the present claim seeking to replace the Trustees.

9. In a self-deprecating WhatsApp message to Sarah, Graham described his attempt to “ rule from the grave ” as a “ bloody awful prospect. ” In fact, what he wanted was a continuation of his life’s work by members of his family under the guidance of his trusted advisors. There is nothing awful about that prospect, and it is deeply regrettable for all concerned that it has not been fulfilled. The result is that I must now resolve the Claimants’ claim to replace the Trustees. Factual Background

10. The parties disagreed as to the court’s ability to resolve disputed issues of fact in circumstances in which neither party elected to seek a direction requiring any witness to attend court for cross-examination. I address that issue later on in this judgment (see paragraphs 67 – 80 below). For the purposes of this summary of the factual background, I refer to the contemporaneous documentary evidence (which is voluminous, with the document bundle running to nearly 900 pages). I also refer to witness statements filed by the parties (which, at circa 400 pages, were also voluminous) where the evidence given is not in dispute, or where I have been able to resolve any dispute by reference to the contemporaneous documents. (a) The parties

11. The Claimants are members of the Smith family. They are connected to Graham through Suzanne. Graham and Suzanne started their relationship in 1989. They were both previously married and divorced. They remained in a relationship for almost 30 years until Graham’s death in 2018.

12. Graham’s first marriage was to Barbara Cheslyn-Curtis (‘ Barbara ’, also known as ‘Barbie’). Graham and Barbara had one child – Guy – who was born on 19 October 1975. By order of Master Clark dated 16 December 2024, Guy was given notice of this claim. He did not become a party to the proceedings, but he did provide witness statements supporting the Trustees’ position.

13. Suzanne had been married to Neville Smith, and they had two children together – Nathan, who was born on 19 February 1976, and Leah, who was born on 3 March 1978.

14. In her evidence, Suzanne says that Graham assumed the role of father to Nathan and Leah and sought to treat Guy, Nathan, and Leah equally. Nathan and Leah have given evidence that Graham referred to himself as their father. That surprised Julie Soulsby, Graham’s long-time secretary, who recalled that neither Nathan nor Leah ever referred to Graham as ‘dad’ in her presence. But Nathan has exhibited a nice birthday card from Graham, in which Graham refers to himself as “ your loving father. ” It is clear that Graham treated Nathan and Leah as his children.

15. Guy also has three children – Leo (who at the time of the final hearing was 22); Logan (10); and Lucien (8). Leah has two children: Henry (18) and Oscar (16). Neither Leo nor Henry has been joined as a party or notified of the claim, and no party has been appointed to represent the interests of any minor beneficiaries. As this claim has been fully argued by counsel for both sides, in my view it was unnecessary for any other party to be joined or to be represented.

16. The First Defendant – Paddy – is an independent turnaround consultant. In that role, he was introduced to Graham in 2002 when Graham was having some difficulties with a business that had been acquired by Millpledge. Having dealt with that situation, Paddy continued to work for Graham as an advisor. The Claimants downplayed Paddy’s role in the business, but Graham himself described Paddy as his “[b] usiness adviser and confidant for many years. ”

17. The Second Defendant – Malcolm – also joined Millpledge in around 2002. His primary role was managing the company’s cashflow forecasts. He did so for about 22 years until his retirement in May 2024. He was never appointed as a director of Millpledge. In his submissions on behalf of the Claimants, Mr Burton said that Malcolm “ has every appearance of a de facto director ” of Millpledge. I reject that submission: there is no evidence that Malcolm ever held himself out as a director of the company, or in practice assumed the functions of a director. He was nevertheless one of Graham’s trusted associates.

18. The Third and Fourth Defendants are members of the family. The Third Defendant – Sarah – is Graham’s sister. She is a retired surgeon. The Fourth Defendant – Maldwyn – is a retired officer of The Parachute Regiment, who went on to a successful career in the City. Maldwyn is Suzanne’s brother. (b) Graham’s will

19. Graham’s will was executed on 26 February 2016. The will appoints the Trustees as Graham’s executors and trustees, and creates a single discretionary trust of Graham’s residuary estate in favour of a class of Discretionary Beneficiaries comprising Suzanne; Guy; Nathan; Leah; and Guy, Nathan, and Leah’s respective issue. Following proceedings pursuant to the Inheritance (Provision for Family and Dependants) Act 1975 , which I address at paragraph 31 below, Suzanne’s interest under the Trust has become fixed.

20. The following provisions of Graham’s will are relevant to this claim: a. Clause 2.1 appoints the Trustees as Graham’s executors and trustees. b. Clause 5.1.1 defines the ‘Trust Period’ of the Trust as 125 years. Combined with the inclusion of Guy, Nathan and Leah’s respective issue in the class of Discretionary Beneficiaries of the Trust, and in light of Graham’s detailed wishes, it is clear that the Trust is intended to operate as a dynastic trust for the benefit of several generations of Graham’s family. c. The class of Discretionary Beneficiaries is defined at clause 5.1.2. Clauses 5.2 and 5.3 of the will confer on the Trustees broad discretionary powers in respect of the disposition of both the capital and income of the Trust Fund. d. Clause 7 incorporates by reference a Schedule conferring a broad range of administrative powers on the Trustees. e. Paragraph 19.3.1 of the Schedule empowers the Trustees to vote shares they hold in a company to “ bring about join in or accept the appointment of one or more of themselves as directors or other officers or as employees of the company ”, and permits any trustee so appointed to keep any reasonable remuneration or other benefit received from the office or employment. f. Paragraph 19.3.5 of the Schedule is a so-called ‘anti- Bartlett clause’ permitting the Trustees to “ leave the management and conduct of the affairs of the company in the hands of its directors and refrain from supervising or enquiring into it unless they have actual notice of an act of dishonesty by a director. ” g. Paragraph 19.4 of the Schedule authorises the Trustees to exercise their powers under paragraph 19 “ even though my Trustees may be personally interested either as beneficiaries under this Will or any Codicil to it or (independently of the Will and any Codicil) as directors or other officers or employees of the company or owners of any of its securities or in any other way. ” h. Paragraphs 24 and 25 of the Schedule permit the Trustees to engage in a transaction even if one or more of their number are acting in a “ dual capacity ” (i.e. acting both as a trustee and either in their personal capacity or in some other capacity, such as a director of a company or as the trustee of some other trust), so long as there is at least one trustee who does not act in a dual capacity who is satisfied that the transaction is fair to the Trustees. (c) The letter of wishes

21. Graham provided a very detailed letter of wishes indicating how he wished the Trustees to exercise their broad discretionary powers conferred by his will. The Trustees say that, while they are not bound by the letter of wishes, Graham’s wishes are an important factor in the exercise of their discretion. Indeed, the Trustees have said that they would try to honour Graham’s wishes wherever possible. So long as they do not do so blindly, there is nothing inappropriate about trustees exercising their discretion to implement a settlor’s wishes.

22. The letter of wishes records (incorrectly) that Graham’s will was signed ‘today’, which indicates that the letter of wishes was being prepared at the same time as the will. However, the letter of wishes was in fact signed some months after the will was executed, on 9 November 2016.

23. Graham’s letter of wishes provides as follows (this summary is adapted from the skeleton argument of Mr Learmonth KC on behalf of the Defendants, which contained a helpful summary of the main provisions of the letter of wishes): a. It was important to Graham that Millpledge continue to exist. b. The Trustees were to appoint the chair of “ the Company ” (which is defined by Graham to mean “ Millpledge Limited, Millpledge Group Ltd and all other group [s] of companies where previously I was named as director ”). In the first year that would be Paddy. c. Nathan and Leah would be made directors of the Company, if they had not already become directors, along with Philip Wood and Richard Talbot, and they would be paid at the market rate. Paddy and Malcolm would “ tutor and mentor ” them into becoming “ professional and responsible corporate directors. ” d. The Company's profits would be used as to one-third for expansion of the business; as to one-third as incentives for the directors of the company (including Nathan and Leah, though expressing the hope that they may wish to re-invest some of their share); and as to one-third to be paid into the trust fund to make payments to Nathan, Leah, and Guy. e. Graham’s main residence (Whinleys House) and another property (Black Barn) were for Suzanne to use as long as she wished, though Graham hoped other family members could use them too. They would then be held for Guy and his children. Suzanne would also receive a salary as a ‘consultant’. f. Guy would be permitted to continue to rent a property called Lakeview (a semi-detached property which is connected to another property owned by Graham called Tunnel Beck, which features in the Claimants’ grounds of removal). g. Rent from the other properties, including the commercial properties, would be paid to Guy, as to 75%, and the 25% balance retained or used to develop the property portfolio. If any property were sold to Millpledge prior to Graham’s death (as had in fact occurred in respect of Millpledge’s commercial premises), Guy would still receive 75% of the rent Graham had previously received from that property. h. Inheritance tax would be paid in instalments and met from the two income streams to be received by the Trust (the one-third of Millpledge profits and the 25% of property profits). i. Graham's assistant of 30 years, Julie Soulsby, would be employed as secretary and assistant by the Trustees.

24. Graham’s letter of wishes can fairly be accused of an attempt at micromanagement that is impractical from beyond the grave: for example, in one paragraph he says that, if he had not already altered his office, “ I recommend the cupboard door in the office is reversed to provide extra storage from the corridor and allow the filing cabinet at the end of my desk be position [ed] against the old opening so extending the conference table has more room. ” Nevertheless, the letter of wishes is the end product of a thorough process of reflection. It clearly represents Graham’s considered wishes for the administration of the Trust.

25. There is also a ‘Supplement Letter of Wishes’ (sic), which is dated the same date as the principal letter of wishes. It is not signed. The Defendants say that they have been “ cautious ” in taking into account the wishes set out in this document. They refer to the fact that the letter appears to be unfinished. They also refer to Ms Soulsby’s evidence that Graham discovered a document on his computer, which seems to have been this document, and that he was “ shocked ” by it. I do not need to resolve any dispute over the status of this document, principally because (i) I do not see any inconsistency between this document and the signed letter of wishes; and (ii) to the extent that the ‘Supplement Letter of Wishes’ supplements the signed letter of wishes, it is common ground that it does so in a way that reflects Graham’s true wishes. One point in particular that can be drawn from the ‘Supplement Letter of Wishes’ is that Graham wanted his grandchildren to “ have their private school fees and education i.e. university forward advancement paid through the trust. ”

26. The parties – and principally Suzanne – have also referred variously to wishes said to have been expressed orally by Graham. I do not need to make any determination in relation to this evidence, on the basis that nobody suggests that wishes expressed orally by Graham ever fundamentally deviated from the wishes articulated by him in his formal letter of wishes. (d) Graham’s death and the immediate aftermath

27. Graham was diagnosed with pancreatic cancer in September 2016. He was given a poor prognosis. Naturally this seems to have accelerated him putting his affairs into order.

28. Graham signed his letter of wishes in November 2016. Paddy, Nathan, and Leah (along with Philip Wood and Richard Talbot) were appointed as directors of Millpledge Limited (the main UK trading company) on 14 December 2016. They seem then to have taken up their roles as directors.

29. Graham died on 22 February 2018. After his death, the Trustees began to implement Graham’s wishes: a. Graham’s office was converted into an office for the Trust under the supervision of his secretary, Ms Soulsby. b. Paddy was appointed as the Chairman of the board of Millpledge. That position was formalised via an employment contract dated 11 April 2018, employing Paddy for an initial annual salary of £6,000 (together with an additional consultancy fee). c. After it was discovered that no directors other than Graham had been appointed to the board of Millpledge Group Limited (the group holding company), Nathan, Leah, Paddy, Mr Talbot, and Mr Wood were appointed. d. The Trustees took legal advice. That legal advice has been disclosed save insofar as it relates to Suzanne’s Inheritance Act claim, in respect of which the advice as to how the Trustees should respond to the claim has been redacted. The Claimants submitted that the redaction of the legal advice was unsatisfactory and struck at the admissibility of the evidence. I disagree – in circumstances in which Suzanne and the Trustees were on opposite sides of the Inheritance Act claim, it was appropriate and indeed inevitable that the legal advice taken by the Trustees in respect of the claim would be redacted, because it remains privileged against Suzanne.

30. Probate of Graham’s will was granted to the Trustees on 28 December 2018. (e) Suzanne’s Inheritance Act claim

31. Suzanne brought a claim for financial provision from Graham’s estate pursuant to the Inheritance Act. That claim was subsequently settled on confidential terms that were annexed to a Tomlin Order. For the purposes of this judgment, all that need be said about those terms is that Suzanne’s interest as a discretionary beneficiary of the Trust has been replaced with a right to receive fixed, regular distributions. The Trustees therefore no longer have any discretion to exercise in relation to Suzanne. (f) Breakdown in relations at Millpledge

32. The genesis of this claim is the complete breakdown in relations between Nathan and Leah – on the one hand – and the other members of the board of Millpledge, including Paddy – on the other – that occurred following Graham’s death.

33. Although the company level dispute is the principal occupation of the more than 400 pages of witness statements that have been filed in these proceedings, it is clearly not the function of the court either to attribute blame or to grant relief in respect of that dispute. Accordingly, it is neither necessary nor helpful for me to undertake a blow-by-blow account of the company level dispute. For the purposes of resolving the Claimants’ claim to replace the Trustees, the following is a sufficient summary of the dispute.

34. Nathan and Leah worked for Millpledge for many years before Graham’s death. Leah’s evidence is that she joined the Group “ formally ” in 1999, but that she had worked in the business since the age of 12. Nathan’s evidence is that he began working in the business at the age of 16. He says that in 2011 he volunteered to move to the United States to develop Millpledge’s business there. He has since lived in the United States, and worked for Millpledge’s US subsidiary from that date until his dismissal as an employee in 2024.

35. Following Graham’s death, Paddy assumed the role of Chairman of the Group. Almost from the outset, it seems that relations between Nathan and Leah – on the one hand – and Paddy – on the other – deteriorated. Tensions also quickly developed between Nathan and Leah and the other directors, Mr Wood and Mr Talbot. In his witness statement filed on behalf of the Defendants, Mr Talbot describes a “ hostile work environment ”, responsibility for which he attributed to Leah.

36. One particular source of tension was a disagreement as to a cap which the Trustees placed on ‘profit share’ payments to the directors – including Nathan and Leah – of 1.5 times base salary. Mr Talbot’s evidence is that the cap was imposed in order for the business to conserve cash during a difficult period of trading caused by the COVID-19 pandemic. Nevertheless, it is apparent from contemporaneous emails that Nathan was very unhappy with the imposition of the ‘profit share’ cap. Nathan was also unhappy as to the exchange rate that was used to calculate his compensation.

37. During 2022, relations continued to sour between Nathan and Leah, and Paddy. Nathan’s evidence is that, in October 2022, certain of his responsibilities were removed from him and given to Mr Talbot and Mr Wood. There was also some tension with the other Trustees – Nathan says that he sought to meet separately with Maldwyn and Sarah, but that he was rebuffed: Paddy told Nathan that the Trustees had to act unanimously, and that any meeting with the Trustees should therefore be with all of them.

38. On 28 April 2023, Mr Wood sent an inflammatory email addressed to Mr Talbot, but also sent to Paddy, Nathan, and Leah, referring to Nathan and Leah as “ the 2 fucking overpaid idiots. ” Leah’s evidence is that in May 2023 she and Nathan then raised a grievance about Mr Wood, and she asked Paddy to suspend Mr Wood for a week and to have his laptop searched. She says Paddy refused to do so. By contrast, the Defendants’ evidence is that there had been (in Mr Wood’s words) “ a lot of unrest and complaints ” concerning “ the way that Leah had conducted herself in her role ”, and which needed to be investigated.

39. In July 2023, the company wrote to Leah setting out various complaints about her performance as HR Director. It is unnecessary for the purposes of this judgment to particularise the complaints, but they related to various alleged failings in Leah’s performance of her role. She attended a disciplinary hearing on 20 July 2023. On 26 July 2023, the company then wrote to Leah notifying her of her termination as a director of the company. Leah appealed. The appeal was handled by an external HR consultant. On 28 September 2023, the appeal was dismissed. The appeal outcome stated that grounds for dismissal existed. Leah remained as an employee of the company, with some of her functions being reassigned (although Leah’s employment of the company has been terminated since the commencement of these proceedings).

40. Relations between Nathan and the other board members were on a similar downward trajectory. In July 2023, the board decided to bring in an external consultant called Charles Hudson. This seems to have been a reaction to the possible loss of a relationship with a US distributor, which would have threatened Millpledge’s US revenues. The Claimants allege that Leah’s removal as a director was “ planned ” and was done in order to “ make financial space for Charles Hudson. ” That is denied by the Defendants. Nathan also says that, from August 2023, Mr Hudson began to carry out many of his responsibilities.

41. In November 2023, the board decided that Nathan should concentrate exclusively on the North American market to transition to smaller distributors, removing his responsibility for purchasing and design. The Defendants say this was a rational commercial decision. The Claimants say it was an attempt to undermine Nathan.

42. In January 2024 Mr Talbot records a personal incident involving contact by Nathan with a member of Mr Talbot’s family who had recently suffered a mental health crisis. Mr Talbot treats the contact as reckless and damaging. Nathan’s position is that he was intervening because of social media posts about Millpledge made by Mr Talbot’s family member. The incident caused yet further hostility between Nathan and the other board members.

43. By early March 2024 the company had, on the Defendants’ evidence, obtained UK and US employment law advice in relation to Nathan. On 6 March 2024, Nathan’s employment was terminated with immediate effect, and he was removed as a director of the company. The termination letter sets out various allegations of misconduct and poor performance by Nathan, all of which he disputes. It is unnecessary to particularise those allegations in this judgment. (g) These proceedings

44. The present proceedings were issued on 10 April 2024, exactly five weeks after Nathan’s termination as a director of the company. Prior to issuing the proceedings, the Claimants had obtained written consent to act from two professional trust companies – Roythornes Trustees Limited and Mills & Reeve Trust Corporation Limited (‘ Mills & Reeve Trust Corporation ’) (in the event, the Claimants ask the court to appoint Mills & Reeve Trust Corporation in place of the Trustees). These proceedings were then issued without any warning, and without the Claimants engaging in any pre-action correspondence with the Trustees or their representatives whatsoever. The proceedings constitute the Claimants’ direct and immediate reaction to Nathan’s dismissal as a director and employee of Millpledge.

45. The Trustees oppose their removal from office. On 10 May 2024, the Trustees filed and served witness statements made on behalf of all four of the Trustees, together with witness statements from Guy and Ms Soulsby. The content of Paddy’s witness statement in particular forms part of one of the Claimants’ grounds of removal, which I address at paragraphs 146 – 154 of this judgment.

46. Reply evidence was filed on 7 July 2024. There was then a directions hearing before Master Clark on 16 December 2024. The Master directed that Guy be given notice of the claim (which was duly done). She also gave permission to file and serve further evidence, and gave permission to both parties to apply to the court for an order pursuant to CPR r.8.6(3) for directions requiring the attendance of witnesses for cross-examination. Neither side availed itself of this opportunity, such that the final hearing of the claim did not involve any cross-examination of any witness.

47. The matter came before me for a disposal hearing on 27 and 28 August 2025. The Claimants were represented at the disposal hearing by Mr Paul Burton. The Trustees were represented by Mr Alexander Learmonth KC. I am grateful to them both for their high-quality written and oral submissions. Legal principles

48. The court’s jurisdiction to remove or replace trustees is very well-established, and is in regular use in this court. There were nevertheless a number of differences between the parties as to the applicable legal principles. Those differences require me to set out the legal principles more fully than would ordinarily be the case in relation to such a well-settled jurisdiction. (a) The source of the jurisdiction

49. The court has a statutory jurisdiction to appoint new trustees pursuant to section 41 of the Trustee Act 1925 , which extends to replacing the existing trustees in office (by appointing “ a new trustee or new trustees… in substitution for … any existing trustee or trustees ”). The court also has an inherent jurisdiction to remove or replace trustees, even without their consent or co-operation, which is one aspect of the court’s inherent jurisdiction to supervise and, if necessary, intervene in the administration of trusts. (b) The applicable test

50. The jurisdiction to remove or replace trustees is highly fact-sensitive, and is likely to involve the court evaluating and weighing a wide range of factors, in respect of which the scope for reasonable disagreement as to the appropriate course of action is likely to be material. In that sense at least the jurisdiction is discretionary, albeit it is not a “ freewheeling unfettered discretion to do whatever seems fair when it comes to trusts ” (to use Lord Neuberger’s memorable phrase in Crociani v Crociani [2014] UKPC 40 ), but one which must be exercised by applying a well-established test.

51. The test applied by the court in exercising its jurisdiction is derived from the judgment of the Privy Council in Letterstedt v Broers (1884) 9 App Cas 371 . In that case, trustees charged substantial commissions to the trust, which were subsequently disallowed. Those substantial overcharges contributed to a complete breakdown in relations between the trustee and the beneficiary. Without making any finding that the trustee had committed a breach of trust, the court removed the trustee from office. Lord Blackburn – giving the judgment of the Board – held that the court’s jurisdiction to remove and replace trustees “ is merely ancillary to its principal duty, to see that the trusts are properly executed. ” In exercising its jurisdiction, the court’s “ main guide must be the welfare of the beneficiaries. ”

52. These principles have been repeatedly approved and applied by the court in many subsequent cases, with minor nuances of language not altering in any way the substance of the applicable test. The applicable test is whether the removal or replacement of one or more of the trustees would be in the best interests of the beneficiaries of the trust as a whole, with a view to securing the proper administration of the trust in their favour. (c) Grounds for removal or replacement

53. At pp.385 – 386 of his judgment in Letterstedt , Lord Blackburn referred with approval to the following passage from Story’s Equity Jurisprudence : “[I] n cases of positive misconduct, Courts of Equity have no difficulty in interposing to remove trustees who have abused their trust; it is not indeed every mistake or neglect of duty, or inaccuracy of conduct of trustees, which will induce Courts of Equity to adopt such a course. But the acts or omissions must be such as to endanger the trust property or to shew a want of honesty, or a want of proper capacity to execute the duties, or a want of reasonable fidelity. ”

54. It is clear from this that a breach of duty or other misconduct by a trustee can therefore potentially warrant a trustee’s removal or replacement. If the trustee has acted dishonestly or the trust property is at risk, removal or replacement is very likely to be ordered. However, a breach of duty or other misconduct does not necessarily dictate the trustee’s removal or replacement. As Park J said in Isaac v Isaac [2005] EWHC 435 (Ch) , at [73], “[s] ome trustees slip up occasionally, but it does not follow that, if an application is made to the court, the court is obliged to remove them. ”

55. Conversely, the court may conclude that a trustee should be removed or replaced without any breach of duty or other misconduct on his part being either alleged or proved. At p.386 of his judgment in Letterstedt , Lord Blackburn noted that “ though it should appear that the charges of misconduct were either not made out, or were greatly exaggerated, so that the trustee was justified in resisting them, and the Court might consider that in awarding costs, yet if satisfied that the continuance of the trustees would prevent the trusts being properly executed, the trustees might be removed. It must always be borne in mind that trustees exist for the benefit of those to whom the creator of the trust has given the trust estate. ”

56. There are many circumstances other than breach of duty or other misconduct which may lead the court to remove or replace a trustee. At paragraph 14-081 of the current edition, the editors of Lewin on Trusts list no fewer than twenty-three examples of cases in which the court has removed or replaced a trustee. Given the nature of the jurisdiction, it is impossible to provide a complete list of the circumstances in which the court will intervene.

57. One particular ground of removal relied on by the Claimants in this case is an alleged breakdown in the relationship of trust and confidence between the trustees and the beneficiaries. Again, the starting point in relation to an allegation of this type is Letterstedt : at p.386 of his judgment, Lord Blackburn said that “[a] s 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 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… ”.

58. Thus, a breakdown in relations between the trustee and the beneficiaries may warrant the trustee’s removal or replacement “ if it is obstructing the administration of the estate, or even sometimes if it is capable of doing so ”: see Kershaw v Micklethwaite [2010] EWHC 506 (Ch) , [2011] WTLR 413, per Newey J (as he then was) at [11].

59. On the other hand, the mere fact that there is friction or even hostility in the relationship between the trustee and the beneficiaries does not, without more, justify the trustee’s removal or replacement: Lord Blackburn went on to say (at p.389 of his judgment) that “ friction or hostility between trustees and the immediate possessor of the trust estate is not of itself a reason for the removal of the trustees. ” As Sales J (as he then was) said in National Westminster Bank v Lucas [2014] EWHC 653 (Ch) , at [83]: “ There are many contexts in which trustees or those in equivalent positions, such as personal representatives of a deceased person, have to make judgments which involve striking a balance between different competing interests and which may thus adversely affect some persons claiming under the trust or in respect of the estate of the deceased. It is to be expected that in such cases there will often be an element of friction between the trustee or personal representative and those disappointed by their decisions. This is not in itself a good ground to remove the trustee or personal representative from their office. ”

60. In his skeleton argument, Mr Burton submitted that “[r] eplacement will be justified where the trustees display inappropriate hostility to a beneficiary, or provoke hostility. ” In this regard: a. I accept that, if a trustee displays hostility toward a beneficiary, from which the court forms a reasonable concern as to whether the trust will be administered fairly and impartially in the interests of the beneficiaries as a whole, that is likely to be a powerful factor in favour of removing or replacing that trustee: see Hudman v Morris [2021] EWHC 1400 (Ch) , at [28], per Master Clark citing National Westminster Bank plc v Lucas . (Mr Learmonth KC submitted that the positive statement in Hudman – that a trustee’s hostility towards a beneficiary can warrant removal – was an incorrect reading of the earlier authorities, but in my judgment it is clearly right that trustee hostility that gives rise to a reasonable concern as to whether the trust will be properly administered may well justify removal). b. I do not however accept that a trustee “ provok [ing] hostility ” in a beneficiary is in the same category. As Master Brightwell said at paragraph [146] of his judgment in Seymour, Earl of Yarmouth v Ragley Trust Company Limited [2025] EWHC 1099 (Ch) , “ animosity and even aggression between trustees and a beneficiary does not lead without more to the removal of the trustees. The willingness and ability of the trustees to perform their role properly despite the circumstances are the key factors. ” Accordingly, and as the Master held at paragraph [201] of his judgment, “ it is clear that removal claims are capable of being dismissed in the face of hostility, at least coming from a beneficiary, where the trustees are suitable and willing to administer the trusts in the interests of all the beneficiaries. ”

61. Accordingly, when it is suggested that a trustee ought to be removed or replaced in office as a result of hostility, friction, or a breakdown in the relationship between the trustee and the beneficiaries (or a subset of them), the test remains as I have set it out above: namely, whether in those circumstances removal or replacement of the trustee would be in the best interests of the beneficiaries of the trust as a whole, with a view to securing the proper administration of the trust in their favour. In other words, hostility, friction, or a breakdown in relations is only relevant insofar as it has an adverse effect on the welfare of the beneficiaries or on the proper administration of the trust. (d) The exercise of the jurisdiction

62. In his oral submissions, Mr Burton accepted that the correct approach to the claim would be for the court to consider the individual grounds relied upon by the Claimants, but then to step back and look at the claim in the round. I consider that it is the correct approach as a matter of law where multiple grounds of removal are relied upon. The court’s task is to consider each ground individually, but then to consider in the round whether the trustee’s removal or replacement is warranted.

63. Similarly, where there are multiple individual trustees and the claim seeks the replacement of all of the trustees, Mr Burton accepted that the correct approach is to consider whether the removal or replacement of each trustee is appropriate. In this case, the Claimants’ position is that the trustees should all be replaced – that they stand together, and should fall together – but in my view it is correct as a matter of law that their position should be considered individually.

64. Mr Learmonth KC relied on the dictum of Park J in Isaac v Isaac , at [66], that the removal of trustees is “ quite a drastic step for the court to take, and in my judgment should only be taken in a clear case. ” I do not think that the Judge intended by those words to add any permanent gloss to the applicable test, and was instead making no more than the common sense observation that the removal or replacement of trustees is likely to have serious ramifications for the future administration of a trust, and as such is not a step that the court will take lightly. The appointment of professional replacement trustees may also impose additional costs on the trust, which are also plainly relevant to the exercise of the jurisdiction. The applicable test remains as I have set it out above.

65. Relying on dicta of Newey J in Kershaw v Micklethwaite [2010] EWHC 506 (Ch) (that “[t] he fact that Mrs Kershaw chose the defendants to be her executors… militates against their removal ”), and of the Chief Master in Harris v Earwicker [2015] EWHC 1915 (Ch) (that “[t] he wishes of the testator, as reflected in the will, concerning the identity of the personal representatives is a factor to take into account ”) Mr Learmonth KC also submitted that the fact that trustees are selected by the creator of the trust is a factor that weighs against their removal or replacement. I agree, although again this does not alter the applicable test. The fact that trustees have been chosen by the creator of the trust does not change the court’s focus on the welfare of the beneficiaries and the proper administration of the trust, but it does indicate that the removal or replacement of trustees who have been specially selected for their knowledge, experience and relationships may harm, rather than promote, the administration of the trust. Where such features exist, the court will take them into account in the exercise of its jurisdiction, but again the applicable test remains as set out above.

66. Finally, it is common ground that the wishes of the beneficiaries of the trust are also relevant to the exercise of the jurisdiction, but are not determinative. (e) Resolving disputed issues of fact

67. The parties disagreed as to the correct approach to resolving disputed issues of fact in the context of a claim to remove or replace trustees.

68. The issue arose because the Claimants invited the court to resolve various disputes involving the evidence of witnesses of fact, where no order for cross-examination had been sought or made. To take two striking examples: a. The Claimants invited the court to find that Maldwyn had made various remarks to Suzanne about the activities and motives of the Trustees, which Suzanne said he had made, but which he denied ever making. b. More seriously, the Claimants initially invited the court to find that Paddy had “ lied ” to them (when he was alleged to have told them that they were not beneficiaries of the Trust, and that the Trust “ had no beneficiaries ”), thereby inviting the court to make what would be tantamount to a finding of dishonesty against Paddy.

69. The first example involved a direct conflict of testimony between two witnesses, neither of whom had been cross-examined. The second example involved a request to find that a witness had acted dishonestly, without that allegation having been put to the witness in cross-examination.

70. In this context, I drew the parties’ attention to the decision of the Supreme Court in TUI UK Ltd v Griffiths [2023] UKSC 48 . In that case, the court was concerned with the issue whether the uncontroverted evidence of an expert witness could be rejected as inadequately reasoned when it had not been challenged in cross-examination. Giving the court’s judgment, Lord Hodge referred (at paragraphs [42] – [44] and [70]) to the “ longstanding rule of general application ”, often referred to in practice as “ the rule in Browne v Dunn”, and applicable to both witnesses as to fact and expert witnesses, that “ a party is required to challenge by cross-examination the evidence of any witness of the opposing party on a material point which he or she wishes to submit to the court should not be accepted. ” That rule, which derives from the need to ensure the fairness of the trial, is not confined to challenges to the honesty of a witness or analogous challenges (e.g. allegations of bad faith, or aspersions against a witness’s character), but is of general application, albeit subject to certain qualifications and exceptions (some of which are addressed by Lord Hodge at paragraphs [61] – [69] of his judgment in the context of expert witnesses).

71. Mr Burton submitted that the court could nevertheless resolve disputes involving the evidence of witnesses of fact without the need for cross-examination (although ultimately he did not invite the court to make any finding that Paddy had “ lied ” in the manner originally alleged). He submitted that: a. The principles in TUI apply primarily to Part 7 claims, and that the Part 8 procedure that governs a claim to remove or replace a trustee is of a different character. He submitted that the Part 8 procedure is designed to permit the resolution of disputes efficiently, and usually without the need for extensive cross-examination, and that the Part 8 procedure is therefore not of a “ fully adversarial ” character. Rather, he submitted that the court can and should exercise its jurisdiction to remove and replace trustees on the basis that any disputes of evidence, including those arising out of the testimony of the witnesses, can be determined without the need for cross-examination. b. He relied on the judgment of Chief Master Marsh in Long v Rodman [2019] EWHC 753 (Ch) , where the Chief Master said at paragraph [19] of his judgment that the court’s discretion is to be exercised in a “ pragmatic way. ” He also relied on the Chief Master’s judgment in Schumacher v Clarke [2019] EWHC 1031 (Ch) , where the Chief Master said at [18] that: “[t] he power of the court is not dependent on making adverse findings of fact, and it is not necessary for the claimant to prove wrongdoing. It will often suffice for the court to conclude that a party has made out a good arguable case about the issues that are raised. If there is a good arguable case about the conduct of one or more of the executors or trustees, that may well be sufficient to engage the court’s discretionary power under s.50, or the inherent jurisdiction, and make some change of administrator or trustee inevitable. The jurisdiction is quite unlike ordinary inter partes litigation in which one party, of necessity, seeks to prove the facts its cause of action against another party… ”. c. On the basis of these authorities, Mr Burton submitted that the court does not need to resolve the Claimants’ allegations of breach of duty and misconduct against the Trustees on the balance of probabilities in order to exercise its jurisdiction to replace them in office. Instead, the court can proceed on the basis that a good arguable case has been made out in respect of those allegations of breach of duty and misconduct. He submitted that that would be a sufficient basis for me to order that they be replaced.

72. By contrast, Mr Learmonth KC submitted that the principles in TUI apply with equal force to the resolution of disputes of fact in the context of a Part 8 claim, and that the correct approach is that of Master Brightwell in Seymour, Earl of Yarmouth v Ragley , at paragraph [154], namely that in circumstances in which no party elects to seek permission to cross-examine the witnesses who file witness statements, the court’s assessment will not involve a resolution of disputed evidence between witnesses of fact based solely upon their oral testimony; rather, the claim will be determined by considering the witness evidence in the context of the contemporaneous documents.

73. As to the dicta of the Chief Master in Long v Rodman and Schumacher v Clarke referred to above, Mr Learmonth KC submitted that they were incorrect in their approach to disputed issues of fact. He submitted that it is incorrect to say that a “ good arguable case ” that trustees have engaged in misconduct or a breach of duty is sufficient to warrant their removal from office. His position was that, in seeking the removal or replacement of trustees, the burden of proof rests on the claimant, and that the court should not exercise its jurisdiction based simply on a “ good arguable case ” of misconduct or breach of duty, but only on the basis of proven allegations (if any).

74. Two separate but connected questions emerge from these submissions, which for clarity ought to be posed and answered separately: a. In a trustee removal claim, can the court resolve disputes involving the evidence of witnesses of fact without cross-examination? b. Can the court exercise its jurisdiction to remove and replace trustees on the basis that a good arguable case has been established that the trustees have committed a breach of duty or misconduct, or must those allegations be proved on the balance of probabilities?

75. As to the first question, in my judgment the principles set out by the Supreme Court in TUI are of general application in civil litigation, and apply as much to claims to remove and replace trustees as to any other dispute. The result is that, as a general rule, in the context of a claim to remove or replace trustees the court will not resolve disputes between witnesses of fact based solely on their oral testimony arising in circumstances in which neither witness has been cross-examined (although it may be possible to resolve such disputes by reference to contemporaneous documentary evidence). Still less will the court find that a witness of fact has acted dishonestly if that witness has not had the allegation fairly put to them in cross-examination.

76. As to the second question, the Chief Master’s statements in Long v Rodman (that the court’s jurisdiction to remove and replace trustees is exercised in a “ pragmatic way ”) and in Schumacher v Clarke (that the court’s jurisdiction is not dependent on making findings of wrongdoing against the trustees, and that, if the claimant makes out a good arguable case of misconduct, that may well be sufficient to engage the court’s jurisdiction to remove or replace the trustees) are well-established and have been applied in subsequent authority, most recently by HHJ Paul Matthews, sitting as a Judge of the High Court, in Fernandez v Fernandez [2025] EWHC 2373 (Ch) (which decision was handed down following the final hearing in this case, and in respect of which therefore the parties provided short written submissions following the hearing). In my judgment, they are also correct in principle.

77. The Chief Master’s statements are correct in principle because the jurisdiction to remove and replace trustees may be exercised without any breach of duty or misconduct on the part of the trustees being established. It follows that, on the facts of a particular case, the court might well think it right to remove or replace trustees on the basis that there is a good arguable case of some misconduct on their part, and (crucially) that in those circumstances the welfare of the beneficiaries and the proper administration of the trust in their favour warrant the court’s intervention. Plainly that does not mean that a trustee will always be removed from office wherever a good arguable case of breach of duty or misconduct has been made out. That is a non sequitur .

78. It is significant that the Chief Master’s judgment in Schumacher followed a directions hearing, at which the defendants submitted that they had been accused of bad faith (although the claimant disavowed any such allegation), and that therefore there would have to be a full eight-day trial with cross-examination of the witnesses. The Chief Master’s judgment is therefore concerned primarily with an application of the overriding objective in determining the appropriate mode of trial on the facts of that particular case: see in that regard paragraphs [33] – [34] of the judgment. In essence, the Chief Master held that bad faith was not alleged or relevant to the claim to any significant degree, and that the removal application in that case could be determined fairly without the need for what he called a “ battle royal ”, i.e. a lengthy trial involving full cross-examination.

79. Accordingly, the true ratio of the Chief Master’s judgment in Schumacher was that a full trial with cross-examination should not be directed on the facts of that particular case, because it would be contrary to the overriding objective to do so. What the Chief Master did not purport to do was suspend the ordinary rules of evidence in the context of trustee removal claims.

80. As this claim came before me on a final hearing on written evidence without either party having sought permission to cross-examine any witness, I do not need to consider, and do not consider, the circumstances in which the court might make an order for cross-examination in the context of a trustee removal claim. I do however note that both Long v Rodman and Schumacher v Clarke concerned the court’s statutory jurisdiction under section 50 of the Administration of Justice Act 1985 to remove or replace the personal representatives of an unadministered estate. While that jurisdiction is exercised on the basis of the same basic principles as the jurisdiction to remove and replace trustees (see Thomas and Agnes Carvel Foundation v Carvel [2008] Ch 395 ), the administration of an unadministered estate is a time-limited process, which should be completed as expeditiously as possible. That feature may well have influenced the Chief Master’s application of the overriding objective in those cases. However, as the question whether to order cross-examination does not arise for determination by me on this case, I say no more about it here. Grounds of removal

81. Through the course of these proceedings, the Claimants’ case as to why the Trustees should be replaced did not remain fixed. In their witness statements filed in support of the claim, it is fair to say that Nathan and Leah were both preoccupied with events at Millpledge board level, and in particular with their respective removal as directors of the company. They each provide a concluding summary of the grounds on which they seek the Trustees’ replacement in office, which contain numerous complaints about company level matters.

82. Thus, for example, Nathan complains in his first witness statement about “[t] he numerous decisions [the Trustees] have made behind our backs in relation to the Company and the lack of accountability as between the Trust and the Company, for example increases to salaries and appointments beyond manageable levels, the changing of staff roles and responsibilities without consultation, removing responsibilities and informing Leah and I after such decisions had been made and poor communication with respect of the available funds for new product pipeline with the funds then being taken as dividends ”. Nathan also complains about the Trustees having “ failed to take steps to prevent the improper way in which the Directors have acted ”, before giving a series of examples of what he says was board level misconduct.

83. Many of these complaints about the goings on at Millpledge did not ultimately feature in the presentation of the Claimants’ case at the final hearing (although, as I explain below, some company level disputes did continue to feature in the Claimants’ case). In his second witness statement, Nathan said: “ I would emphasize that this is a claim for Trustee removal and as such I do not consider it appropriate to get distracted by the management of the Company… we are not here to audit the Company – we are here to get new Trustees… ”. Nevertheless, it is clear that the Claimants remained preoccupied with what they perceived to be Paddy’s maltreatment of them in respect of their roles at Millpledge, culminating in their dismissal as directors.

84. In an Agreed Case Summary filed on 22 August 2025, the following ten grounds were articulated. The same ten grounds had been set out in a Case Summary prepared for the directions hearing before Master Clark in December 2024: a. Failure by the Trustees to provide accounts for the Trust; b. Failure by the Trustees to recognise the First and Second Claimant as beneficiaries of the Trust; c. A conflict of interest as a result of the First Defendant acting as Trustee and Chairman and Director of the Company; d. A lack of oversight of the Company by the Trustees as both are controlled by the same person; e. Failure by the Trustees to follow the Deceased’s wishes; f. A lack of consultation by the Trustees with the First and Second Claimants over important Company matters; g. The removal of the First and Second Claimants as Directors of the Company and subsequently, their dismissal as employees; h. The Trustees failing to hold the Directors to account for inappropriate actions they have taken in respect of the Company; i. The breakdown in relationship in trust and confidence between the Claimants and the Defendants; and j. The Trustees allowing non-beneficiaries to utilize Trust assets.

85. From Mr Burton’s skeleton argument, it was not entirely clear to me whether these grounds remained the grounds on which the Claimants sought the replacement of the Trustees. At the outset of his oral submissions, I therefore sought to clarify the basis on which the Claimants’ case was put. Mr Burton indicated initially that the Claimants sought to rely on the totality of the evidence and documents they had filed, but in my view it was important – both for the efficient disposal of the claim, and so that the Trustees had a fair and proper opportunity to respond to the case against them – for the Claimants to articulate the specific grounds on which they said that the Trustees ought to be replaced. Mr Burton ultimately accepted that the Claimants’ grounds could be found in his skeleton argument, and that they could be conveniently grouped into the following six particular grounds: a. The Trustees committed a breach of their duty to notify the beneficiaries of their interest in the Trust. b. The Trustees committed a breach of trust in failing to keep and provide accounts. c. The Trustees committed a breach of trust in failing to act fairly and disinterestedly between the beneficiaries. d. The Trustees committed a breach of trust in failing to exercise independent oversight of the company. e. The Trustees committed a breach of trust in allowing a stranger to benefit from Trust property. f. There has been a breakdown in relations, and the Claimants have lost trust and confidence in the Trustees.

86. Mr Burton submitted that the Claimants’ case rested on all of these grounds, and that the court ought to evaluate them in their totality. As I have already noted, at the hearing he did ultimately accept that, before undertaking an overall evaluation of the merits of the case, the court must consider each of the specific complaints made about the Trustees separately and individually. In his subsequent written submissions on the decision in Fernandez v Fernandez , Mr Burton sought to retreat from that approach somewhat, submitting that grounds of removal should not “ distract ” the court from dealing with the “ central issue ” (being whether the applicable test is satisfied), but I reiterate that in my judgment the only sensible way of approaching a complex and multivalent claim of this nature is for the particular grounds of removal articulated by the Claimants to be considered separately and individually, before the court then “ steps back ” and considers the claim in the round. Accordingly, in this judgment I adopt the six grounds set out above as the framework through which I evaluate the claim. Discussion and disposal (a) Ground 1 – alleged breach of the duty to notify

87. In his first witness statement, Nathan says that “[t] he first couple of board meetings after Graham’s death were most unusual. At the first meeting of the trustees/board of directors of the Company after Graham’s death, Leah and I told Paddy what Graham had indicated to us was the future for the Company and Paddy told us that we were not beneficiaries of the Trust and that there were no beneficiaries. That is of course incorrect, given the contents of the Will and the Letter of Wishes… ”. Paddy does not directly address this allegation in his evidence, and the minutes of the relevant board meeting do not record this interaction.

88. The Claimants submitted that the Trustees were under a duty to familiarise themselves with the class of beneficiaries of the Trust, and a duty to notify the beneficiaries of their interest under the Trust. In his skeleton argument, Mr Burton submitted that Paddy had “ lied ” to Nathan and Leah about the true nature of their entitlement under the Trust. When I suggested to him that this would be tantamount to a finding of dishonesty against Paddy – which, for the reasons already articulated in this judgment, seemed to me to be impossible to make in circumstances in which that allegation had never been put to Paddy (it is not an allegation that Nathan himself even makes in his witness statement) – Mr Burton accepted that he was not seeking a finding that Paddy had acted dishonestly. Rather, he submitted that Paddy’s statement that Nathan and Leah were not beneficiaries of the Trust and that “ there were no beneficiaries ” was incompetent, and that it constituted a breach of the Trustees’ positive duty to notify Nathan and Leah of their interests under the Trust.

89. In response, Mr Learmonth KC accepted that, as a general principle of law, there is a duty on trustees to notify beneficiaries of their interest under a trust. He submitted that Paddy’s alleged statement had been made at the first board meeting following Graham’s death. He suggested – although, given the lack of Paddy’s evidence on the point, this was speculation – that there had been a misunderstanding on Nathan’s part. In any event, he noted that Leah’s evidence was that she had found Graham’s will online in May 2018, and was concerned that her name had been listed in a document that was available online. This demonstrated that the Claimants were aware, at least from May 2018, that they had been named as beneficiaries of the Trust created by Graham’s will. Mr Learmonth KC submitted that this was therefore a purely historical allegation, and that – 7 years on – it provided no justification for the removal of the Trustees from office.

90. In the absence of any written evidence from Paddy directly in response to Nathan’s allegation on the point, and in the absence of any cross-examination to test Nathan’s evidence, or to put the point to Paddy, it is impossible for me to draw any firm conclusions.

91. In my judgment, it is inherently implausible that Paddy would have told Nathan that he and Leah were not beneficiaries of the Trust and that “ there were no beneficiaries. ” Not only is that obviously untrue, but it would have been a bizarre thing to have said (whether deliberately or mistakenly), given that Nathan and Leah were named in the will as beneficiaries and clearly intended by Graham to receive benefit from the Trust. Nevertheless, given Nathan’s evidence, it does seem that something along the lines he alleges was said to him by Paddy at the first board meeting. It seems to me that the most likely explanation is that the conversation related to the fact that the Trust is a discretionary trust, under which no beneficiary has a fixed entitlement as such. Whether through a poor choice of words by Paddy, or through a misunderstanding, Nathan appears nevertheless to have understood Paddy to be saying that neither he nor Leah were beneficiaries of the Trust, and that the Trust had no beneficiaries. However, I recognise that this also involves an element of speculation on my part. Given the paucity of the evidence, this is about the best that can be made of the allegation.

92. If Paddy did tell Nathan that he and Leah were not beneficiaries of the Trust, I accept that, on a strict view, this could have constituted a breach of the Trustees’ duty to notify them of their interests under the Trust. However, I do not consider that, individually, this is a sufficient basis to warrant the Trustees’ replacement in office, or that the incident should be attributed any real weight in the overall evaluative exercise. I say that for the following reasons: a. First, as I have said, it seems to me that the most likely explanation is that Paddy either misspoke, or that Nathan misunderstood what he was attempting to say. Even if, strictly speaking, the episode constituted a breach of the Trustee’s duty to notify the beneficiaries of their interest under the Trust, it did so in a technical sense only. I do not consider that the incident provides any support for any broader criticism of the Trustees’ conduct in the administration of the Trust. b. Second, any consequence of any such breach of trust was extremely short-lived, as it is clear that the Claimants had become aware of their interest under Graham’s will by May 2018. c. Third, the incident occurred over 7 years ago, almost immediately following Graham’s death. I agree with Mr Learmonth KC that it is a purely historical allegation, which has no material bearing on the issue whether the continuation of the Trustees in office is in the best interests of the beneficiaries of the Trust as a whole.

93. I therefore conclude that the matters raised under ground 1 do not justify or support the claim to replace the Trustees. (b) Ground 2 – alleged failure to keep and provide accounts

94. The next ground is an allegation that the Trustees failed to keep accounts of their administration of the Trust, and then failed to produce accounts to the Claimants when asked to do so.

95. It is common ground between the parties, and in any event it is right as a matter of law, that trustees have a duty to keep accounts, and to render an account of their administration of the trust to the beneficiaries.

96. Mr Burton submitted that accounts were repeatedly requested by the Claimants, but that no accounts were provided by the Trustees until after these proceedings had been issued. Even then, it is said that the account provided consisted of “ a single page. ” Mr Burton suggested that the Trustees had not in fact kept accounts, and that accounts had only been prepared following the issuing of these proceedings. He submitted that by the Trustees’ failure to keep and produce accounts, the Claimants were thereby “ kept in the dark ” in relation to the assets of the Trust, and that this constituted a serious and sustained breach of one of their basic duties, which he submitted constituted misconduct which in and of itself justified the replacement of the trustees; or alternatively was a source of the friction and hostility in the relationship that justified the Trustees’ replacement in office; or in the further alternative is “ part of the accumulation of reasons justifying the court’s intervention. ”

97. The documentary evidence relevant to this ground consisted of a short series of emails. On 26 September 2023, Nathan emailed Paddy asking him to provide trust accounts since Graham’s death. Paddy replied on 3 October 2023 to suggest that Nathan and he should “ concentrate on the future of Millpledge ”, and suggesting that Nathan contact Malcolm “ to discuss what information… you wish to have and what you may be entitled to. ” On 9 October 2023, Nathan then replied, copying Malcolm, and stating “ I'm disappointed that you have not yet seen your way to supplying me with the full trust accounts to include the Whinleys estate accounts since Graham’s passing… I repeat my request and I'm copying in Malcolm herewith though with regard your suggestion that I contact Malcolm as entirely unnecessary (sic)”. However, it appears that no further email was sent requesting accounts or following up on these emails, and there is no evidence of any other request for accounts having been made, either before or since. The matter was simply left there.

98. Nathan refers to these emails in his witness statement in support of the claim, saying “[t] his request was plainly a legitimate enquiry and I understand that we are entitled to this information by virtue of our position as beneficiaries, yet the Trustees have failed to co-operate with this request. ” However, he does not give evidence of any other requests for accounts having been made.

99. Mr Learmonth KC characterised this allegation as a “ fig leaf ”, on the basis that it related to a single request by Nathan for the production of accounts which was “ unfortunately overlooked. ” Mr Learmonth KC submitted that, had Nathan genuinely wished to obtain trust accounts, there would have been a further and indeed sustained attempt to obtain them, but there is no evidence he made any such sustained effort to obtain accounts. Mr Learmonth KC asserts that there is no evidence that accounts were not kept – that is said to be untrue speculation on the Claimants’ part – and notes that trust accounts were in any event provided over a year ago.

100. I accept that, as a matter of general principle, trustees ought to be ready to provide beneficiaries with an account of their administration of the trust on request. As such, the email exchange between Nathan, Paddy and Malcolm in September/October 2023, in which Nathan asked to be provided with trust accounts and was not provided with them, constituted a failure by the Trustees to provide an account. However, on the basis of the available evidence I do not conclude that the Trustees failed to keep accounts. Nor can I conclude that any other request was made by any of the Claimants for the production of accounts which was either refused or ignored by the Trustees. The short email exchange is also plainly insufficient to be able to infer that accounts were withheld from the Claimant for an improper motive – in particular, that the Trustees declined to provide accounts deliberately so as to keep the Claimants “ in the dark ” as to the state of the Trust fund. Overall, I agree that the evidence indicates that a single request by Nathan for the production of accounts was, for whatever reason, unfortunately overlooked by Malcolm.

101. In my judgment, that conclusion does not justify the replacement of the Trustees, and should not be given any real weight in the overall evaluative exercise. I say that because: a. A single failure to provide trust accounts, while regrettable, does not support the conclusion that the Trustees’ replacement is required to secure the welfare of the beneficiaries as a whole, or the proper administration of the Trust in their favour. b. Had the Claimants made a serious and sustained attempt to obtain trust accounts which had been rebuffed by the Trustees, that may have been a weightier factor, but in the event Nathan’s request for the production of accounts does not appear to have been repeated. In this regard, the fact that no pre-action correspondence was sent making any formal request for the production of accounts is in my view significant. c. In any event, trust accounts have now been provided. In submissions, Mr Burton articulated a complaint about the form and content of the accounts, but the Claimants have made no separate and free-standing complaint or request for relief in that regard. For example, no application has been made for a direction that the Trustees be required to provide an account in some other form, on the footing that the account that has been provided by them is inadequate. In any event, that would have been a difficult contention to sustain, as the information provided to the Claimants does not appear to me to be inadequate on its face. On the contrary, it provides a relatively good level of information about the state of the Trust fund and how the assets have been managed.

102. I therefore conclude that the matters raised under ground 2 do not justify or support the claim to replace the Trustees. (c) Ground 3 – alleged failure to act fairly and disinterestedly in the administration of the Trust

103. Next, the Claimants allege that the Trustees have failed to act fairly and disinterestedly in the administration of the Trust. In truth, this ground consisted of a variety of sub-grounds, which were collected and presented together as allegedly demonstrating an overall lack of impartiality on the part of the Trustees.

104. The first sub-ground concerns an alleged lack of impartiality in the distribution of Trust assets. In their evidence in support of the claim, the Claimants alleged that they had received no distributions from the Trust, other than payments towards Leah’s children’s school fees. They contrasted this lack of any distribution with the position of Guy, whom they said had received substantial benefits from the Trust.

105. In response, Paddy’s evidence is that Graham wanted Nathan and Leah to receive their benefit from the Trust primarily via their remuneration as directors of Millpledge, including via the ‘profit share’ that they might receive. Paddy set out in his evidence the aggregate remuneration (including salary, ‘profit share’ and other benefits) received by Nathan and Leah from Millpledge between 2016 and 2023. I did not take this summary of the amounts received to be contested by the Claimants. I do not think it is necessary for me to set the figures out here, but substantial annual payments were made.

106. Following the removal of Nathan and Leah as directors of Millpledge, and indeed following the issuing of these proceedings, the Trustees have recently indicated to Nathan and Leah that they are now in a position to begin making regular distributions of income to them.

107. On the particular issue of school fees, Leah alleged an unfair difference of treatment between the beneficiaries: she said in her witness statement that the Trustees had “ withheld school fees from me for nearly 3 years whilst I believe paying Guy’s son’s school fees in full immediately and potentially including a deposit despite his son being at twice as expensive a school. ” In his evidence, Paddy explained that the Trustees had considered it appropriate to cap payments for school fees. It seems that this resulted in Guy’s children’s school fees being paid in full, but Leah’s children’s school fees were not paid in full because her son was attending a more expensive school. In her reply evidence, Leah states that she had never been informed of this cap, and that in any event she has two children whereas Guy has three, such that, even were her children’s school fees to be paid in full, the aggregate payment towards her children’s school fees would still be less than the aggregate payment towards Guy’s children’s school fees. The Claimants also complain that the Trustees assisted Guy in respect of his tax affairs (by ensuring that he was provided with an annual Form R185), but that similar assistance was not afforded to the Claimants.

108. In his skeleton argument, Mr Burton submitted on behalf of the Claimants that the disparity of treatment in respect of distributions reflected the fact that the Trustees view Nathan and Leah as “ entitled spoilt brats ”, and that the Trustees had in reality set about to exclude Nathan and Leah from receiving any benefit from the Trust. In both his skeleton argument and in oral submissions, Mr Burton rejected the contention that the payment of remuneration (salary, ‘profit share’ and other benefits) by Millpledge to Nathan and Leah constituted benefits received from the Trust: rather, he submitted that Nathan and Leah were “ paid their salaries in return for the work they completed as directors and employees of the company, and in accordance with their respective contracts. ” He submitted that the more recent indication by the Trustees that regular distributions of income would be made to Nathan and Leah was not guaranteed and could be withdrawn at any time, and that Nathan and Leah have little confidence that the Trustees will continue with these distributions.

109. In response, Mr Learmonth KC submitted that Nathan and Leah had between them, and during their tenure as directors, received the lion’s share of payments made by Millpledge under its ‘profit share’ scheme, and that these sums were not paid to them simply as a result of their position as directors and employees of the company, but in recognition of their position as beneficiaries of the Trust. Mr Learmonth KC submitted that this was entirely consistent with Graham’s worldview, pursuant to which Graham wanted Nathan and Leah to receive their benefit from the Trust primarily via their remuneration as directors and employees of Millpledge, and that Graham envisaged and wanted Nathan and Leah to reinvest the majority of these payments back into the company. As to school fees, Mr Learmonth KC submits that the Trustees’ decision to place an upper limit on school fees was a reasonable decision, taken in light of the financial conditions then faced by the Trust.

110. I do not consider that this sub-ground has any real merit. I do not consider that the Trustees’ approach to the Trust in the period between Graham’s death and Nathan and Leah’s dismissal as directors of Millpledge can be said to demonstrate unfair or partial treatment of the beneficiaries. On the contrary, in my judgment the approach taken to the administration of the Trust in that period seems to me to have closely followed Graham’s wishes, with Nathan and Leah receiving considerable benefits from their roles in Millpledge, whereas Guy received distributions derived from the Trust’s properties.

111. In this regard, I do not accept that the benefits received by Nathan and Leah from their roles in Millpledge should be disregarded or treated as irrelevant. It is undeniable that this is primarily how Graham wished Nathan and Leah to receive benefits from the Trust, and it seems to me to be obvious that their status as beneficiaries of the Trust was taken into account in the decision that they would between them receive the majority of the ‘profit share’ made available to the company’s directors.

112. Following their dismissal as directors, Graham’s wish that Nathan and Leah receive benefits primarily through their role at Millpledge has been thwarted. In those circumstances, the Trustees have evaluated the situation, and have decided to commence monthly distributions to Nathan and Leah. I do not consider that decision to have been unreasonable or indicative of a lack of impartiality. Nor do I consider that the possibility that such payments are not fixed, and therefore may be subject to future change, is in itself supportive of the claim – it is in the nature of discretionary trusts that the provision of benefits from the trust remains subject to an exercise of the trustee’s discretion from time to time. I do not accept that the Trustee’s decision to place a cap on school fees is inherently unreasonable, and it is certainly not so unreasonable as to constitute a breach of duty on the Trustees’ part.

113. I therefore reject the assertion that the Trustees’ approach to distributions constitutes a breach of their duty to act fairly and disinterestedly in the administration of the Trust.

114. The next sub-ground is that the Trustees have acted improperly and in breach of duty in respect of the expulsion of Nathan and Leah as directors of Millpledge. At the outset I should say that, while this sub-ground was grouped under ground 3 – that is, the allegation that the Trustees have acted in breach of their duty to act fairly and disinterestedly in the administration of the Trust – it does not fit naturally under that heading, because it does not on its face relate to a disparity of treatment between the beneficiaries of the Trust. In reality, it is more of a free-standing complaint that the Trustees have acted in an unlawful and unfair manner towards the Claimants. But at the final hearing it was dealt with under this ground, and I therefore address it at this stage of my judgment.

115. In essence, the complaint is that Nathan and Leah’s removal as directors of Millpledge was unlawful because a proper process was not followed. Mr Burton submitted that section 169 of the Companies Act 2006 confers on directors a non-derogable statutory right (i) to receive a copy of any notice of an intended resolution to remove that director from office; (ii) to be heard on the resolution at the meeting; and (iii) to have any written representations on the intended resolution circulated to the members of the company (or read out at the meeting, if it is too late to circulate them). It is said that these statutory provisions were not complied with in relation to the removal of Nathan and Leah as directors of the company. It is therefore said that the Trustees acted unlawfully. The Claimants also point to the fact that, on the same day that Nathan was removed as a director of the company, the Trustees executed a written resolution amending the Articles of Association of Millpledge, which in his oral submissions Mr Burton characterised as being a bungled attempt by the Trustees to facilitate Nathan’s removal as a director of the company (‘bungled’ because the Claimants’ case is that the rights conferred on the directors by section 169 of the Companies Act cannot be disapplied by a company’s Articles of Association).

116. In response, the Trustees’ position was that there was ample justification and need for both Nathan and Leah to be removed from their position as directors of the company. As to the allegation that a proper process was not followed, Mr Learmonth KC provided what he said was a direct answer to that point, that the statutory rights at section 169 of the Companies Act 2006 are engaged only in respect of a resolution to remove a director pursuant to section 168 of the Act , which was not the route adopted in respect of the removal of Nathan and Leah as directors. However, he also made the more fundamental point that the Claimants have not brought any proceedings or sought any relief in respect of the allegation that their dismissal as directors of Millpledge was undertaken unlawfully.

117. Moreover, while the Trustees accept that Nathan and Leah’s removal as directors of the company is contrary to Graham’s worldview, they say that the decision was taken in the best interests of the company, and therefore of the Trust. Mr Learmonth KC submitted that the removal of Nathan and Leah as directors of the company is actually a reason against, rather than in favour of, the Trustees’ replacement in office, as the principal source of friction between the Claimants and Paddy in particular (namely, the hostility at board level) has now been removed.

118. In my judgment, this sub-ground does not provide any support for the claim: a. In relation to the allegation that a proper process was not followed in respect of Nathan and Leah’s removal as directors of Millpledge, in my judgment it would be inappropriate for me to make any determination in that regard. That is because, if it is correct that Nathan and Leah’s removal as directors was procedurally defective, the appropriate course of action would be for them to seek relief to remedy that – for example, a declaration that their purported removal as directors of the company was void. They have not done so, and the company law issues that would be ventilated on any such claim have been addressed so tangentially before me that it would be inappropriate for me to determine that issue. b. In any event, and more fundamentally, a procedural defect in the removal of Nathan and Leah as directors of Millpledge would provide no real support for the replacement of the Trustees in office if that removal was, on its substance and on its merits, a proper action for the Trustees to have taken in the interests of the beneficiaries of the Trust as a whole. But I am in no position to determine whether the removal of Nathan and Leah as directors of Millpledge was in the best interests of the beneficiaries of the Trust as a whole, or not. In his skeleton argument, Mr Burton rightly accepted that “ it would be impossible for the court to adjudicate on whether their termination was justified from a commercial basis. ” In the absence of any such determination being possible, a procedural defect – even if established – would not in and of itself support the claim to replace the Trustees.

119. Two other points were grouped under this ground, which may be taken relatively shortly.

120. First, it was submitted that the Trustees had misapplied Graham’s letter of wishes, “ slavishly ” following it in respect of the benefits conferred on Guy from the Trust’s property income, such that Nathan and Leah had not even been considered for benefit from that source of income. It was submitted that this was established on the face of Malcolm’s evidence in his second witness statement. But looking at the passage referred to, Malcolm referred to Graham’s letter of wishes requesting that Guy be treated as the “ main beneficiary of Graham’s property portfolio ” and that “ Nathan, Leah and Guy [be] the main intended beneficiaries of any Company profits. ” That does not show that Guy is being treated as the sole beneficiary of the property portfolio – rather, it refers to Graham asking that Guy be treated as the main beneficiary of the income generated by that portfolio. That is precisely what Graham’s letter of wishes asks the Trustees to do. I do not consider that there is any basis in the evidence to conclude that the Trustees have failed to exercise their discretion properly in respect of the distribution of the property portfolio income.

121. Second, it was submitted that the Trustees had failed to act unanimously. Thus, in respect of the expulsion of Nathan and Leah as directors of Millpledge, it was suggested that the ‘family’ trustees - Sarah and Maldwyn – “ were either kept in the dark until after the event or simply, passively, went along with everything Paddy and Malcolm wanted. ” It was also submitted that there was “ good evidence ” from which it could be inferred that Sarah and Maldwyn had simply taken “ a back seat ” in the administration of the Trust. The trouble with those allegations is that both Sarah and Maldwyn are very clear in their evidence that they have always been fully involved and engaged in trustee decision-making. Thus, for example, Maldwyn said in his witness statement that “[t] he Claimants appear to aver that I am not in agreement with my fellow Trustees around the management of the Trust. This could not be further from the truth. Whilst my co-trustees and I have been confronted with some difficult decisions over the years, we have always been unanimous in our decision-making and I consider it a privilege to have served with them. ” Sarah has provided similar evidence.

122. In circumstances in which neither Maldwyn nor Sarah has been cross-examined, this seems to me to be another situation in which it would be impossible for the court to disbelieve their evidence and to find – notwithstanding their direct evidence to the contrary – that the Trustees have not acted unanimously in the administration of the Trust. I therefore decline to do so.

123. In the premises, in my judgment none of the points grouped together under ground 3 provides any support for the claim to replace the Trustees. (d) Ground 4 – alleged failure to exercise independent oversight of the company

124. The next ground is the assertion that there is currently no independent oversight of Millpledge.

125. This allegation is directed primarily against Paddy – the Claimants submit that Paddy has an irreconcilable conflict of interests arising as a result of his position as a director of Millpledge and as one of the trustees of the Trust, which conflict is said not to be authorised by the terms of Graham’s will (save in respect of remuneration, which is said to be catered for in the will). It is also submitted that the other Trustees are not properly supervising Paddy in his performance of his role as a director of the company.

126. As Mr Learmonth KC pointed out in his submissions, this allegation began life as an insinuation that Paddy was using his position on the board of Millpledge to obtain an improper profit for himself. Thus, in his witness statement, Nathan said that “[s] ince Paddy became chairman, he has agreed with the Trustees to (1) pay himself a salary, (2) pay himself a profit share, (3) have income in lieu of private healthcare which increases the value of his profit share, (4) have a company pension and (5) have a company car on a lease which is below market rate. There is plainly a complete lack of oversight between the Trust and the Company. ” The tenor of that paragraph seems to me to be an insinuation that Paddy is drawing remuneration and other benefits from the company which are not justified, and this is being allowed to happen because nobody is supervising him.

127. In the event, no allegation that Paddy has in fact abused his position as a director of Millpledge has been pursued by the Claimants. The allegation is really now therefore that having one of the Trustees sit on the board of the company is structurally inappropriate, unauthorised by Graham’s will, and means that there is a lack of fiduciary oversight of Paddy’s actions in his capacity as a director.

128. In his oral submissions, Mr Burton acknowledged that Graham’s will contains a provision which on its face appears to authorise any conflict inherent in one of the Trustees sitting on the board of the company: in particular, clause 19.3.1 provides that the Trustees may “ bring about join in or accept the appointment of one or more of themselves as directors or other officers or as employees of the company and any trustee so appointed may keep for himself any reasonable remuneration or other benefit received from the office or employment. ” However, Mr Burton submitted that neither this clause nor the ‘anti- Bartlett ’ provision at clause 19.3.5 of the will permits the Trustees to wash their hands of any oversight of one of their number so appointed. He submitted that there is no evidence (for example, contemporaneous minutes) indicating that the Trustees have performed this duty of oversight; in any event, he submitted that the Trustees must act unanimously, such that Paddy could block any attempt at independent oversight by the Trustees of the performance of his role as a director of Millpledge.

129. In response, Mr Learmonth KC submitted that no allegation had been made (or at least persisted with) by the Claimants that the Trustees had failed to prevent mismanagement by Paddy, or by the board of directors as a whole, in respect of the affairs of Millpledge. As I have said above, he noted that there was no evidence and indeed no sustained allegation that Paddy had profited improperly from his role as a director of Millpledge. Mr Learmonth KC also relied on the fact that Graham’s will authorised the Trustees to appoint one of their number to the board of the company; that Graham had himself appointed Paddy as a director of the company; and that Graham’s letter of wishes had made it clear that Graham wished Paddy to act as the first Chairman of the board of Millpledge after his death. He submitted that the Trustees did not rely on the ‘anti- Bartlett ’ provision in Graham’s will; rather, he said that the Trustees were complying with their duty to supervise the affairs of the company.

130. In relation to this ground, I do not think it can be said that Paddy’s role as one of the directors of Millpledge created an irreconcilable conflict that was not authorised by the terms of Graham’s will. In my judgment, the will clearly contemplates that the Trustees might appoint one or more of their number to act as one of the directors of the company, and authorises the conflict that would otherwise prevent the payment of remuneration to that trustee-director.

131. As to whether Graham envisaged Paddy playing this role, there is something of a tension in Graham’s letter of wishes: on the one hand, Graham writes that he would like Paddy to act as the Chairman of the company “[i] n the first year after my death ”, and that “ in subsequent years the Chairman will be elected annually by the Trustees by unanimous agreement ” (incidentally, it is not clear whether Graham envisaged that Paddy might be re-elected to the role of Chairman, as has happened). On the other hand, Graham stipulates that “ I do not want any of the Trustees to also be appointed as directors of the Company unless there are no other suitable alternatives to take on this position. In this event, and in this event only, all four trustees should agree with the appointment. ” Since a chairman of the board of directors is ipso facto one of the directors, these wishes are not easy to reconcile, although it may simply be that Graham viewed the roles as “ Chairman ” and director as being distinct from one another. In any event, I do not think it can be said that Paddy’s role as a director of Millpledge is contrary to Graham’s wishes as expressed in the letter of wishes.

132. Accordingly, in my judgment there is nothing inherently impermissible about Paddy serving as one of the directors of Millpledge. Further, I do not think that the evidence establishes that the Trustees have failed to supervise the activities of the board of Millpledge, or in particular Paddy’s actions as a director of Millpledge.

133. In light of the final conclusion I reach on the claim, as set out below, which will in any event resolve any concern as to lack of oversight over the board of Millpledge, I do not further lengthen an already long judgment by addressing this ground in more detail. It suffices to record that I do not consider that any alleged impropriety on Paddy’s part in his role as a director of Millpledge, or the alleged failure by the Trustees to supervise Paddy’s actions as a director, has been proven.

134. I therefore conclude that ground 4 does not support the claim to replace the Trustees in office although, as I explain below, in the overall evaluative exercise I do take into account the desirability of having independent oversight of the board of Millpledge. (e) Ground 5 – alleged breach of trust in allowing a non-beneficiary to occupy trust property

135. The Claimants next allege that the Trustees committed a breach of trust in permitting Graham’s ex-wife (Guy’s mother) Barbara to occupy a trust property, despite her not being one of the beneficiaries of the Trust.

136. In short summary, Barbara moved into a property called Tunnel Beck, which is owned by the Trust. Tunnel Beck is next to Lakeview, which is another Trust property. Guy is living in Lakeview, and so by occupying Tunnel Beck Barbara is living next to her son.

137. In his submissions in support of this ground, Mr Burton originally submitted that the Claimants did not accept that Barbara occupied Tunnel Beck pursuant to a tenancy agreement. However, an assured shorthold tenancy agreement between the Trust and Barbara dated 1 May 2023 was in the bundle. In the absence of any contention that that tenancy agreement was not genuine, I suggested that it was clear that Barbara occupied Tunnel Beck pursuant to that tenancy agreement. Mr Burton accepted that, but said that the Claimants do not accept that the tenancy agreement is being performed. In that regard: a. The tenancy agreement stipulates a monthly rent of £500. b. There is a letter from Ms Soulsby on behalf of the Trust to Barbara dated 1 May 2023 (the same date as the tenancy agreement) saying “[a] s discussed and agreed by the Trustees and yourself, we confirm that the Trustees have agreed to a 2 year or 24 month ‘rent free period’ to repay the cost of the improvements on Tunnel Beck undertaken and paid by yourself during 2022 & 2023… Thank you for your help and assistance in returning Tunnel Beck to a home. ” c. Mr Burton submitted that the Claimants were not in a position to “ interrogate ” whether Barbara had in fact paid for renovation work to Tunnel Beck, or whether the value of that renovation work was greater than the value of the rent-free period offered to Barbara by the Trustees in recognition of that work.

138. I agree that there is no direct evidence available to the court of the works undertaken by Barbara; the amount spent; or whether the cost of the works exceeded the value of the rent-free period offered to Barbara. However, the evidence of Ms Soulsby – who was not cross-examined by the Claimants – was that “ I am aware that Barbie has in fact invested quite a substantial amount of money into renovations at Tunnel Beck. The property is now habitable as a result, and so Barbie’s investment is in fact an investment on behalf of the Trust, as she has inevitably increased the value of the property. This is of benefit to the Trust and the Discretionary Beneficiaries and so I fail to see why the Claimants have raised an objection to Barbie’s occupation of Tunnel Beck. ”

139. Mr Burton submitted that there was no evidence to corroborate Ms Soulsby’s statement that the renovation work undertaken had increased the value of the property. On the other hand, there is no evidence that it did not, and no objective reason to doubt Ms Soulsby’s account of the circumstances.

140. In my judgment, there is simply no proper evidential basis on which I could conclude that the arrangements between the Trustees and Barbara constituted a breach of trust. Indeed, on their face they appear to be perfectly legitimate and sensible arrangements, by which a Trust property has been renovated at Barbara’s expense, in exchange for a rent-free period of occupation by her.

141. In any event, I do not accept that Barbara’s occupation of the property would necessarily constitute a breach of trust by the Trustees, even if it were at less than full market value. It would in principle be legitimate for the Trustees to permit Barbara to occupy Tunnel Beck, if they considered that her occupation of the property conferred a benefit indirectly on Guy. In that regard, it appears from Ms Soulsby’s evidence that Barbara is unfortunately in poor health, and that it is beneficial for Guy for his mother to occupy Tunnel Beck so that she is close by him. Certainly that is Guy’s view: in his evidence he said that, “[m] y mother living so close by has also brought me and my children great joy, which I know my Father would have wanted. I fail to see how my mother’s occupation of Tunnel Beck can be seen as a legitimate reason for arguing that the Trustees ought to be removed from office. ” I agree.

142. I therefore conclude that the matters raised under ground 5 do not justify or support the claim to replace the Trustees. (f) Ground 6 – breakdown in relations / hostility

143. The final ground relied upon by the Claimants is a breakdown in the relationship between themselves and the Trustees, and what they say is the hostility shown towards them by Paddy, and (to a lesser extent) the other Trustees.

144. In this regard, it is undeniably the case that the relationship between the Claimants – on the one hand – and the Trustees – on the other – has deteriorated. There is no need to rake over the causes of the deterioration in the relationship again – the summary of facts at paragraphs 10 – 43 of this judgment and my discussion and disposal of grounds 1 – 5 have already done so in some detail. In very broad summary, the fundamental cause of the breakdown in the relationship has been the complete falling out between the Claimants and the other directors of Millpledge, and in particular Paddy, culminating in the Claimants’ removal as directors of the company. The Claimants consider that Paddy has orchestrated their ouster from the position that Graham wanted them to hold on the board of Millpledge, and that the other Trustees have either supported him in doing so, or at least been supine in failing to prevent him from doing so. The Trustees, by contrast, consider that removal of the Claimants as directors of Millpledge was necessary and legitimate.

145. Were the matter left there, I do not consider that any of the foregoing grounds of removal, either individually or collectively, would have justified the court’s intervention. In addition, and as I have already explained, mere friction or hostility in the relationship between trustees and beneficiaries does not, without more, justify the removal or replacement of the trustees: the key issue is whether the trustees can be trusted to continue to administer the trust properly in the interests of the beneficiaries of the trust as a whole, notwithstanding any difficulties in the relationship.

146. However, the matter is not left there, because in his first witness statement in response to this claim – which was filed and served in the weeks following the sudden issuing of the claim following Nathan and Leah’s removal as directors of Millpledge – Paddy made the following remarks about the Claimants. He said this: “ The Trustees have not been willing to place the personal interests of individual Discretionary Beneficiary’s ahead of the interests of other Discretionary Beneficiaries, and nor have we been willing to set aside Graham’s wishes. The Claimants have grown frustrated at not getting their own way all of the time, and this sense of entitlement is plain for all to see in their statements, and in the way that they have continually placed their own individual interests ahead of the interests of others. The Claimants have shown themselves to be entitled and greedy, with their sole focus being the acquisition of money and control. The Claimants have refused to accept the structure of the Trust and that they are not in control of Graham’s estate, and this has always been a source of extreme frustration to them. Nathan and Leah’s sense of entitlement morphed into complacency where the Company was concerned, and it is this complacency and their deep-rooted greed which drove Nathan to pursue an agenda against me as Chairman, and against the Board as a whole, and which ultimately resulted in Nathan’s termination from the Company as both a director and employee and Leah’s termination as a director of the Company too. Sadly, Nathan and Leah’s complacency was jeopardising and disrupting the performance of the Company and in turn, the performance of the Trust. This being the case, the Trustees were left with little option but to terminate Nathan and Leah as directors. ”

147. In essence, Paddy has formed the view as a result of their company level battle that Nathan and Leah are self-interested, entitled, complacent, acquisitive, and greedy. Paddy’s view is that Nathan and Leah’s actions have been driven by their complacency and, as he has called it, their “ deep-rooted greed. ”

148. In his second witness statement, filed some months later, Paddy sought to contextualise the remarks he made about the Claimants, saying that “ my first statement was prepared following a difficult period of over 12 months in which Nathan had caused considerable disruption and problems within the Company, which as Chairman of the Company, I have been obliged to resolve, including taking the decision to dismiss Nathan and Leah as directors of the Company… Having come through this difficult period, we were then served with these court proceedings very shortly afterwards, and without any prior notice. I will readily admit that these court proceedings caught me off guard, and as someone who believes himself to be a rational and reasonable man, I was disappointed and somewhat hurt that Nathan and Leah had taken the drastic step of issuing court proceedings, without having first taken the time to sit down with me and my co-trustees, to talk through, and hopefully alleviate their concerns from a trust perspective. I was also upset to note that most of the issues raised in Nathan and Leah’s witness evidence were directed against me, and include allegations that relate to my performance as Chairman of the Company…. I therefore admit that I was shocked, saddened, and rather offended by what was said in these court proceedings. My comments [in] my first witness statement were a result of all of the above. Now that more time has passed, I recognise that I expressed myself in that moment more emphatically than I intended. ”

149. On behalf of the Claimants, Mr Burton submitted that in his first witness statement Paddy displayed outright hostility towards the Claimants. He submitted that these were not the remarks of a person who is a fit and proper person to act as a trustee of the Trust. He submitted that Paddy’s second witness statement contextualising his remarks was “ too little, too late ”, and that the hostility displayed towards the Claimants by Paddy gave rise to a reasonable concern on their part that, were he to remain in office, the Trust would not be fairly and properly administered in a manner that took into account their interests as beneficiaries. Mr Burton also submitted that the same concern applied to all of the other Trustees, who had not disassociated themselves from Paddy’s remarks (with Malcolm having stated that he agreed with the paragraphs of Paddy’s witness statement containing these remarks, but without repeating their content himself; and with Sarah and Maldwyn having not explicitly disagreed with Paddy’s remarks). In essence, Mr Burton characterised the Trustees as being aligned with one another, and being aligned against the Claimants.

150. On behalf of the Trustees, Mr Learmonth KC submitted that this was a case in which the beneficiaries had, by their conduct, provoked an angry initial reaction from one of the Trustees, but not a situation in which the Trustees as a body were hostile towards the Claimants. Rather, he characterised the situation as being analogous to the position in Isaac v Isaac [2005] EWHC 435 (Ch) , in which relations between the trustees and beneficiaries had become very strained as a result of disputes at company level, but which strained relationship would not have caused the court to replace the trustees in office.

151. As to Paddy’s particular remarks, Mr Learmonth KC submitted that, in circumstances in which the Trustees had not acted in breach of duty or otherwise improperly in any fashion (with which conclusion I agree), the claim was seeking to “ pull itself up by its bootstraps ”, in that the Claimants had made many untrue and unfair allegations against Paddy, but now based their claim on Paddy’s angry reaction to those very allegations. Mr Learmonth KC suggested that the service of the claim (via process servers) without any forewarning had created a degree of shock and anger on the part of the Trustees, and of Paddy in particular, and that his angry reaction could be explained in large part by reference to the provocative allegations made by the Claimants against him, many of which have either not been pursued or have not been substantiated. Mr Learmonth KC also noted that, following Nathan and Leah’s removal as directors of Millpledge, much of the source of the contention in the relationship between the Claimants and Paddy has now been resolved.

152. Having already considered and rejected the various allegations of misconduct made by the Claimants against the Trustees, I am sympathetic to the submission that the issuing and service of these proceedings without any forewarning, and the fact that the Claimants’ evidence contains a broad array of accusations of improper and/or inappropriate conduct against the Trustees, and in particular against Paddy individually, constituted provocative behaviour on the Claimants’ part. I also understand why Paddy may have reacted angrily to that provocation.

153. Nevertheless, the distinct impression that I am left with from his evidence is that he has formed a deeply negative view, not simply of the Claimants’ actions, but of their character as individuals. In my judgment it is fair to say that the views he has expressed show outright hostility towards the Claimants. In his subsequent witness statement, Paddy did not retract these views, or apologise for having expressed them – he simply said that he had expressed himself “ more emphatically than [he] intended. ”

154. Whatever the provocation, in my judgment the trenchant and deeply negative views expressed by Paddy about the Claimants give rise to a reasonable concern that he will find it very difficult to carry out his duties as one of the trustees of the Trust with the objectivity and impartiality required. It seems to me that this is a case which has gone beyond mere friction and hostility, and is a situation in which the hostile views about the Claimants formed and expressed by Paddy could well have an adverse impact on the proper administration of the Trust. For example, Paddy’s view that the Claimants are motivated by “ deep-rooted greed ” could well adversely impact on his consideration of any request made by the Claimants to receive a distribution from the Trust.

155. I have therefore formed the view on ground 6 that some intervention by the court is needed to safeguard the welfare of the beneficiaries and to ensure the proper administration of the Trust. I now turn to undertake the overall evaluative exercise, in the course of which I will consider the precise nature of that intervention. (g) Overall evaluative exercise

156. Looking at the position overall, I consider that the various allegations of misconduct and of breach of duty that have been made by the Claimants do not justify, either individually or in aggregate, the replacement of the Trustees in office. In large measure those allegations have simply not been made out on the evidence before me. Even where it might be argued that a breach of duty has occurred, any such breach is of a technical nature, has caused no loss to the Trust fund, and is sufficiently historical and tangential that in my judgment it plainly does not warrant or support a conclusion that the Trustees should be replaced.

157. However, further to my analysis of ground 6 above, I have reached the conclusion that Paddy should be removed as a trustee of the Trust. In light of the clear hostility he has shown towards the Claimants, and of the risk that his hostility may have an ongoing adverse impact on the proper administration of the Trust, in my judgment it is necessary to secure the welfare of the beneficiaries and the proper administration of the Trust for Paddy to cease to act as one of the Trustees.

158. In relation to Malcolm, the position is finely balanced. Malcolm has acted as a trustee without remuneration, and in that capacity has clearly undertaken important services for the Trust, including preparing the Trust’s regular cashflow forecast. The loss of those services to the Trust would be unfortunate. However, in his evidence Malcolm has explicitly agreed with the hostile remarks about the Claimants made by Paddy. Ultimately, I consider that I ought to ensure that negative personal views about the Claimants’ character which have been formed by Paddy, and which appear to be shared by Malcolm, do not adversely affect the future administration of the Trust. I have therefore decided that Malcolm should also be removed as one of the trustees of the Trust.

159. In those circumstances, it seems to me that the court has two options. First, I could proceed to order the replacement of all four Trustees with an independent professional trustee. The alternative approach would be for me to appoint an independent professional trustee to act alongside the remaining ‘family’ trustees, namely Sarah and Maldwyn.

160. In this regard, the Claimants submitted that all four of the Trustees should be replaced. It was submitted that the Trustees were wholly aligned with one another, and that, in Mr Burton’s words “ where they have chosen to stand together, they bring each other down. ” It was also submitted that Graham’s wishes in respect of the composition of the trustee body had been shown by subsequent events to be misconceived – the Trustees had not acted as a check and balance on one another, and the Trustees appointed to ‘represent’ both sides of the family – Sarah and Maldwyn – had not done so.

161. I reject those submissions. In my judgment, the right approach is for me to appoint an independent professional trustee to act alongside Sarah and Maldwyn. I have reached that conclusion for the following reasons: a. The appointment of an independent professional trustee will resolve any concern that the management of Millpledge is not subject to proper oversight. A professional trustee will also be able to undertake the day-to-day administration of the Trust (potentially continuing to retain the services of Ms Soulsby, who clearly has an extensive knowledge of the history and affairs of the Trust). b. Graham’s letter of wishes clearly indicates that he wished the trustee body to be composed of both professionals and family members. He said “[w] here possible, there should always be a family member from the Cheslyn-Curtis side of the family and a family member from the Smith side of the family. ” In circumstances in which the appointment of a professional trustee will ensure oversight of Millpledge and the proper running of the Trust, it does not seem to me that there is any compelling reason to depart from Graham’s wish that family members from both ‘sides’ of the family also act as trustees. Indeed, there are good practical reasons for that arrangement to continue: Sarah and Maldwyn were both selected by Graham to act for their knowledge of the family, and if they continue to act as trustees the Trust will continue to benefit from that knowledge. I would also observe that they are both experienced and successful professional people in their own right. c. Neither Sarah nor Maldwyn has exhibited any animus towards the Claimants. I do not consider that their opposition to the Claimants’ claim disbars them from continuing to act as trustees of the Trust. In light of this judgment it seems to me that there was much that it was reasonable to oppose in the Claimants’ claim, both in its substance and in the manner in which it was pursued. There is no particular reason to suppose that a trustee body composed of an independent professional trustee together with the family members specifically selected by Graham for that role will not administer the Trust in a proper fashion. d. The retention of Sarah and Maldwyn as trustees will also provide for a measure of continuity in the trusteeship. Conclusion

162. I therefore conclude that I ought to: a. Remove Paddy and Malcolm as trustees of the Trust; and b. Appoint a professional trustee to act as trustee of the Trust together with Sarah and Maldwyn as the continuing trustees.

163. I have not heard submissions on the suitability of Mills & Reeve Trust Corporation to act as one of the trustees of the Trust, and in any event it will be necessary in light of this judgment for Mills & Reeve Trust Corporation to confirm that it is willing to act as a trustee of the Trust together with the continuing trustees. I will therefore invite further submissions on the appropriate orders consequential on this judgment.

164. That is my judgment.