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

Grounds for removal or replacement

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.”

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.”

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.”

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.

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…”.

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].

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.”

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:

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.