PT-2024-000315 - [2025] EWHC 3011 (Ch)

Ground 2 – alleged failure to keep and provide accounts

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.

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.

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.”

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.

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.

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.

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.

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:

I therefore conclude that the matters raised under ground 2 do not justify or support the claim to replace the Trustees.