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

Ground 5 – alleged breach of trust in allowing a non-beneficiary to occupy trust property

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.

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.

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:

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.”

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.

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.

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.

I therefore conclude that the matters raised under ground 5 do not justify or support the claim to replace the Trustees.