CH-2025-BRS-000001 - [2025] EWHC 2373 (Ch)

The substantive judgment of the district judge in the court below was reserved, and later delivered in writing. It is a detailed judgment, running to 13 pages of single-spaced A4. It states first of all that it follows the hearing of the defendants’ application for the removal of the appellant as executor of both Jean’s and Alexander’s wills and as trustee of the 2008 trust (paragraph 1). It sets out the background facts in 20 numbered subparagraphs (paragraph 2). It deals with representation at the hearing (paragraph 3), and summarises the evidence before the court, which was all in writing (paragraph 4). So far as I can see, there was no application for any of the makers of the witness statements to be cross-examined. The judge considered the special position of Nigel’s estate, concluding that no one needed to be appointed to represent it at this stage (paragraph 5).

In the next section of his judgment, the judge considered the nature of the counterclaim and how it was to be resolved. He set out the contentions of the defendants’ counsel, which in summary were that it was simply for the removal of Julian as executor and trustee, and should be resolved at a one-day hearing without oral evidence and cross-examination and without the need to decide disputes of fact (paragraph 7). He also set out the contentions of the appellant’s counsel. In summary these were that the counterclaim was issued in proceedings under CPR Part 7, that provision had been made for disclosure and a four-day hearing and that the court intended to resolve all the issues raised by the pleadings rather than simply determine the question of the appellant’s removal and replacement (paragraph 8).

The judge referred to three decisions of Chief Master Marsh, namely Harris v Earwicker [2015] EWHC 1915 (Ch), Long v Rodman [2019] EWHC 753 (Ch), and Schumacher v Clarke [2019] EWHC 1031 (Ch). He said that these decisions

“established that applications for removal of the executors were to be dealt with pragmatically, that exercise of the power of the court was not dependent upon making adverse findings of fact, that consequently oral evidence, cross examination and lengthy hearings were not usually required” (paragraph 9).

The judge said it was not clear whether these authorities were cited to the earlier district judge when considering case management (paragraph 10), and considered that the counterclaim was simply one for the replacement of the appellant as executor and trustee, and did not seek the resolution of disputes in relation to the substance of the administration of either the estates or the trusts. In his view there was nothing to take the case out of the general run and it should be resolved at a relatively short hearing without oral evidence (paragraph 11). The judge then dealt with counsel for the appellant’s submissions that in the circumstances of the particular case there should still be a four-day trial (paragraph 12). But the judge decided that that was not the correct way forward, and not in accordance with the overriding objective (paragraph 13).

In the next section of his judgment the judge set out the legal framework. He referred to the decisions of Chief Master Marsh, mentioned above, and set out what he considered to be the law on removal of personal representatives in 11 numbered subparagraphs:

“14.

The legal framework is not contentious and is taken from Chief Master Marsh’s line of authorities. In summary:

(1)

The core guide is the welfare of the beneficiaries, and the discretion is to be exercised in a pragmatic way.

(2)

The court must consider first whether the circumstances are such that the discretion is engaged, second whether an order should be made, and third what order should be made.

(3)

It is unnecessary for the court to find wrongdoing or fault or a lack of good faith. The guiding principle is whether the administration of the estate is being carried out properly. Put another way, is it in best interests of the beneficiaries to replace the personal representative?

(4)

If there is wrongdoing or fault and it is material such as to endanger the estate the court is likely to exercise its power to replace. However, if the criticism is minor and will not affect the administration of the estate it may not be necessary to exercise the power to replace.

(5)

The wishes of the testator expressed in the will concerning the identity of the personal representatives is a factor to take into account.

(6)

The wishes of the beneficiaries may also be relevant, but the beneficiaries as whole or some of them have no right to demand replacement and the court has to make a balanced judgment between competing points of view as to what is in the interests of the beneficiaries as a whole.

(7)

In the absence of material wrongdoing or fault, the court must consider whether it has become impossible or difficult for the personal representatives to complete the administration of the estate or trusts. The court must review what has been done and what remains to be done. A breakdown in the relationship between some or all of the beneficiaries and the personal representatives will not without more justify their replacement. If, however, the breakdown of relations makes the task of the personal representatives difficult or impossible, replacement may be the only option. Friction or hostility between the trustees and beneficiaries is not of itself a reason for removal, but where that hostility is grounded on the mode in which the trust or estate is being administered, it is relevant.

(8)

Where the personal representative is or may be in a position of conflict because of intimated claims against him which need to be investigated, this is relevant. Conflict does not have to be established to merit removal; an outward appearance of potential for conflict can result in removal.

(9)

The additional cost of replacing some or all of the personal representatives in favour of professionals is a material consideration. The size of the estate and the scope of the work which will be needed will have to be considered.

(10)

It is rarely necessary for an application to result in a trial because it is usually unnecessary to make findings in respect of issues of fact. In fact, in circumstances where the application may be the precursor to a devastavit claim or similar, it is important for the court not to make findings of fact. The approach of the court is whether there appears on the evidence available (or likely to be obtained at proportionate cost) the basis for a claim which has reasonable prospects of success, subject to consideration of available defences. Such a claim must enhance the value of the estate relative to the costs of pursuing it. The evidence need not be determinative, but must not be speculative or contingent. A single borderline complaint might not merit investigation, but a number of complaints viewed as a whole may justify replacement and investigation.

(11)

It is not open to the parties to demand a trial or require a certain number of days for trial. It is for the court to control. It is exceptional for applications under section 50 or under the inherent jurisdiction to require a full trial. The use of the part 7 procedure, if even appropriate, does not inevitably lead to a trial with cross examination of witnesses.”

Apart from his reference to “Chief Master Marsh’s line of authorities” (referred to above at [17]), the judge did not cite authority for these propositions. I shall return to some of these points in due course. The judge then said (in paragraph 15) that the principles relating to the removal and replacement of trustees under the Trustee Act 1925 or the inherent jurisdiction of the court were similar, and referred to London & Capital Finance plc v Global Security Trustees Limited [2019] EWHC 3339 (Ch D) (a further decision of Chief Master Marsh) as authority for that proposition.

The final section of the judgment was headed “Consideration”. The judge set out in summary form the allegations made by the defendants, in six numbered subparagraphs (paragraph 16). He then summarised the appellant’s position in relation to these allegations (paragraph 17). I will quote paragraph 18 (which is short) in full:

“I do not propose to go through all of the issues raised by the parties and recite all the evidence referred to by the parties’ respective counsel. It is not pragmatic to do so, not least because in accordance with authority making findings of fact is unnecessary and may be inappropriate.”

In the next paragraph (paragraph 19), the judge set out what he called his “firm conclusion that Julian should now be substituted as executor and trustee of both the estates and the SJP Trust in favour of a professional trustee.” He set out his reasons in 12 numbered paragraphs over the next four pages of his judgment. Using at least some of his language, I can summarise these reasons as follows:

The judge was therefore prepared to make orders removing Julian “and any other current trustee of the [discretionary trust] appointed by him, and appointing the trust corporation, and all necessary ancillary orders” (paragraph 20). He asked counsel to agree a minute of order and said that he intended to list a hearing to deal with consequential matters, which could be vacated if the parties were agreed (paragraph 21). As I have said, that hearing was in fact held on 3 December 2024, when the question of costs was resolved.

On that day, the judge gave a series of extempore judgments in relation to consequential matters, including costs, which have been transcribed, running in total to some nine pages of single-spaced A4. The first three of these judgments cover (i) an application by Julian for an adjournment, (ii) an application by Julian that the judge should reconsider his judgment and his conclusion, and (iii) how the handover between Julian and the professional personal relationship should operate. The next three extempore judgments are (i) a brief acknowledgement that Julian is entitled to his costs of administering the estates on the indemnity basis, (ii) a decision in principle, briefly expressed, that the respondents as the successful party on the counterclaim were entitled to their costs, and (iii) a longer and more detailed decision that the appellant should pay the respondents’ costs of the application of 28 March 2024 on the indemnity basis, but otherwise should pay the respondents’ costs on the standard basis. Finally, there was a very short decision on the question of interest (assessed at 2% above base rate), and a slightly longer judgment on the question of a payment on account of costs (assessed at £55,000).

The order as made by the judge on 3 December 2024 ran to 15 paragraphs. Paragraph 1 dealt with the position of the estate of Nigel. Paragraph 2 gave judgment “on the Counterclaim” to the respondents. Paragraph 3 removed Julian as executor of the wills of Jean and Alexander. Paragraph 4 removed Julian and any other current trustee of the 2008 Trust. Paragraph 5 appointed a professional trustee to be personal representative of the two estates and trustee of the 2008 Trust. Paragraph 6 dealt with the vesting of the assets of the estates and the trust. Paragraph 7 dealt with the handover between Julian and the professional trustee. Paragraph 8 dealt with endorsing a memorandum of the order on the grants of probate. Paragraph 9 is the main costs order, set out below. Paragraph 10 dealt with payment on account of costs, and paragraph 11 with interest. Paragraph 12 dealt with the appellant’s position, and is set out below. Paragraphs 13-15 dealt with any appeal and refused an application for a stay. Paragraph 16 dealt with service of the order.

The main costs order made by the judge was contained in paragraph 9:

“The Claimant shall pay the First and Second Defendants’ costs of and incidental to the Counterclaim to be assessed on the standard basis and the Application assessed on the indemnity basis, both of which shall be the subject of a single detailed assessment if not agreed.”

The position of the appellant, Julian, was dealt with by paragraph 12:

“The Claimant shall not be permitted to indemnify himself from the assets of the Estates or Trust in respect of his own costs, expenses or liabilities of or incidental to this litigation subject to the provisions of that order, The Claimant has a statutory right of indemnity in relation to the costs of the administration of the Estates and Trust.”

By using the phrase “costs, expenses or liabilities of or incidental to this litigation” this paragraph extends not only to the costs which Julian incurred for his own account, but also to that costs liability which was imposed upon him by paragraph 9.