Brudenell -Bruce v Moore & Ors

This case concerns an estate (“the Estate”) at Savernake Forest in Wiltshire that the family of the claimant, the Earl of Cardigan, has owned since soon after the Norman Conquest. The Estate is the subject of a trust established by a conveyance dated 29 September 1951 (“the Trust”) of which Lord Cardigan is a beneficiary. In these proceedings, Lord Cardigan challenges the remuneration that the first and second defendants, respectively Mr John Moore and Mr Wilson Cotton, have received as the present trustees of the Trust and alleges a variety of other breaches of duty by them. He also seeks an order for the removal of Mr Moore and Mr Cotton (“the Trustees”) as the trustees of the Estate.

Lord Cardigan is the son of the 8^th Marquess of Ailesbury, who is now in his 80s. A younger half-brother of the Marquess, Lord Charles Brudenell-Bruce, also features in events relevant to the proceedings before me. Lord Charles is a year or two older than Lord Cardigan, who is himself 61.

Lord Cardigan married in 1980, and the couple had two children, Viscount Savernake (who is now aged 32) and Lady Catherine Brudenell-Bruce (who is 29 years old). Lord Cardigan and his first wife were, however, divorced in March 2009, and his first wife died of cancer on 4 July 2012.

Lord Cardigan re-married in 2011, and a year or so ago he became a father for the third time.

The Estate includes a number of houses. Much the largest of them is Tottenham House, which was largely rebuilt in the 1820s for the 1^st Marquess of Ailesbury. The family lived in the property until the Second World War, but in 1946 it was let for use as a preparatory school before being used by a charity called the Amber Foundation. Since about 2005, the house has lain empty, except that a Ms Prue Chetwynd-Talbot was employed as a caretaker for a period.

There is a large stable block adjacent to Tottenham House and a gardener’s cottage nearby. Like Tottenham House, the gardener’s cottage is at present unoccupied.

The next largest properties on the Estate are (in order of approximate value) Savernake Lodge (where Lord Cardigan is living), Sturmy House (which is vacant) and Little Lye Hill Cottage (which is occupied by Lord Charles Brudenell-Bruce and his wife). Ten or so smaller residential properties are also still comprised within the Estate, as are an estate office and yard.

As well as buildings, the Estate includes about 3,950 acres of woodland and agricultural land. Much of this has, however, been leased to the Forestry Commission since 1939.

The Estate was rather larger in the past. Over the years, parts of the Estate have been sold off. In recent times, properties known as Morleigh Cottage, Leigh Hill Cottage and Luton Lye House have been sold (in the latter part of 2009 and early 2010) to reduce bank borrowings and Leigh Hill House was transferred to Lord Cardigan’s first wife pursuant to a divorce settlement.

At the end of the 1940s, the Estate was held by a company owned by Lord Cardigan’s father (later to become the 8^th Marquess of Ailesbury) and grandfather (the 7^th Marquess). The former was beneficially entitled to 49% of the shares and the latter to the remaining 51%.

Between 1949 and 1951, the company was replaced by a partnership. The company was put into members’ voluntary liquidation, and it was resolved that its assets should be divided between its members in specie. On 29 September 1951, the 7^th and 8^th Marquesses entered into a partnership agreement under which, it appears, the 7^th Marquess was to have a 51% share and the 8^th Marquess a 49% share (as had been the case with the company). On the same day, the Estate was conveyed by deed to the 7^th and 8^th Marquesses to be held on trust for sale as part of their partnership property.

By the early 1960s, there had been a generational shift. An agreement dated 9 July 1963 provided that the partnership was in future to be carried on by (a) the 8^th Marquess and (b) trustees for Lord Cardigan. The 8^th Marquess now had a 51% share, while his son’s trustees had a 49% share.

In 1987 there was another generational shift. The 49% partnership share which had been held on trust for Lord Cardigan was appointed to him absolutely on 22 May 1987. At the same time, the 8^th Marquess assigned assets including his 51% share in the partnership to a Mr David Shorey (a solicitor) and a Mr Brian Butler on trusts for Lord Cardigan’s children (“the Children’s Trust”). An agreement of the same date provided that the partnership was henceforth to be carried on by Lord Cardigan on the one hand and the trustees of the new trust on the other. The assets of the partnership were stated to belong as to 49% to Lord Cardigan and 51% to the trustees of the Children’s Trust. Lord Cardigan replaced Mr Butler as a trustee of the trusts affecting the Estate.

The Children’s Trust contains a power to make appointments in favour of Viscount Savernake and Lady Catherine Brudenell-Bruce. Had Lord Cardigan had other children before 27 May 2011, they would also have become potential beneficiaries, but in the event the class closed on that date. Viscount Savernake stands to become absolutely entitled to the trust property on attaining the age of 40 years.

In 1994, Mr Butler retired as a trustee of the Children’s Trust, and Lord Cardigan was appointed in his place. As a result, Lord Cardigan and Mr Shorey became the only trustees of both the Children’s Trust and the trusts affecting the Estate. A new partnership agreement was entered into reflecting the change of trustee. The agreement stated that the partnership was now to be carried on by, on the one hand, Lord Cardigan and, on the other, Mr Shorey and Lord Cardigan as trustees of the Children’s Trust.

In 2003, Mr Shorey retired as a trustee of the Estate and the Children’s Trust. He was replaced as a trustee by a Mr Richard Ford, a partner in the firm of solicitors that has become Thrings (formerly Thring Townsend).

In 2007, Mr Ford instituted proceedings in which he alleged that Lord Cardigan had been guilty of breach of trust and sought his removal as a trustee. Lord Cardigan denied the allegations against him.

The proceedings were compromised on the basis of an agreement set out in the schedule to a Tomlin order made by Kitchin J on 21 October 2008. The agreement provided for Mr Moore and Mr Cotton to replace Lord Cardigan and Mr Ford as trustees of the Estate, and for Mr Cotton also to take over from Lord Cardigan as a trustee of the Children’s Trust. Mr Moore and Mr Cotton were thus to be the only trustees of the trusts affecting the Estate, and Mr Ford and Mr Cotton the only trustees of the Children’s Trust.

Two deeds of retirement and appointment of trustees were executed on 3 November 2008. One related to the Children’s Trust, the other to the Estate.

Mr Moore is the senior clerk and practice manager in the chambers of Mr John Gardiner QC in Lincoln’s Inn. After leaving school, he took Part I of the Bar exams before joining a company called Air Express International. He became a barristers’ clerk in about 1987 at Mr Gardiner’s suggestion.

Mr Moore and Lord Cardigan met 30 or more years ago when the latter joined the local branch of the Conservative Party, of which Mr Moore was then the chairman. The two became close friends.

Mr Moore and his wife live in Savernake Forest, on the fringes of the Estate.

Mr Cotton is a chartered accountant and a partner in Smith & Williamson LLP. He has specialised in trusts and estates since 1981 and has acted as a trustee or executor since about 1988. On a number of occasions, he has been appointed as a trustee by the Courts. He was a founding member of the Society of Trust and Estate Practitioners (“STEP”) and served for many years on its council.

After leaving school, Lord Cardigan attended the Royal Agricultural College in Cirencester and then took over the management of the Estate, a role that he performed for more than 30 years. In August 2005, however, Lord Cardigan went to the United States, and he spent relatively little time in this country between then and 2011. Except for a period in 2006 (when he lived close to the Estate), he was mainly in either the United States or the British Virgin Islands. During at least some of this period, he was receiving therapy. To his obvious distress, his then wife instituted divorce proceedings in 2006.

Lord Cardigan first approached Mr Moore in May 2007 about the possibility of his becoming a trustee. Although Mr Ford did not issue the proceedings for his removal as a trustee until December 2007, Lord Cardigan told Mr Moore in an email that relations with Mr Ford had “utterly collapsed, and irrevocably”. Lord Cardigan went on:

“You will know that over the last few decades I have confided in you more than anyone else, and it is to you first that I have always come when legal problems have arisen ….

The point is, I REALLY want to find a way to involve you in the Estate, even in this small mainly-symbolic way. Life ahead looks pretty rosy with the Hotel deal now signed, and I can think of no-one better suited to be a co-Trustee of the 51% share than your goodself.

There are no meetings, you virtually never need to sign anything, except the occasional new lease. I will need to seek your guidance occasionally, but I do that anyway, as you know.

Please say you will at least think about it.

And don’t say ‘pressure of work’. You haven’t got to do anything much, apart from receive the occasional monthly report from me on how things are going on the Estate.

It would be deeply wondrous if you would say ‘Yes’.”

Lord Cardigan first met Mr Cotton, whom Mr Ford had proposed as a trustee, at the end of February 2008. Mr Cotton appears to have given Lord Cardigan lunch in London.

During the first half of 2008, Lord Cardigan, Viscount Savernake and Mr Moore met on several occasions to discuss matters relating to the Estate. The minutes prepared following a meeting on 8 June included this:

“It was agreed that in spite of the fact that [Lord Cardigan] was prepared to stand down from trusteeship of the Settlement and there would be a scheme of appropriation of properties the Estate would continue to be managed as a whole. [Lord Cardigan] would fulfil the role of Estate Manager subject to the restrictions which had been previously discussed and which restrictions would be revisited in these minutes for the sake of the record.”

Professional consultants were to be used “in areas of their relevant expertise”.

On 3 August 2008, Mr Moore sent Mr Cotton an email about Lord Cardigan. As well as noting that Lord Cardigan “does tend to conduct correspondence on a somewhat adversarial basis”, Mr Moore said:

“[Lord Cardigan] is under enormous pressure on a number of fronts and is inclined to react rather severely to many of the twists in the … pathway to what he sees as a denial of his birthright. He is slowly coming to accept the concept of a new regime with its limitations on his control of the Estate but he is somewhat fragile and easily flashes over on hearing anything which relates to a tightening of controls on his freedom ….

[Lord Cardigan] interprets the appointment of Land Agents to manage the Estate as a usurpation of his birthright and a serious blow to his dignity, self respect and standing in the community. [Lord Cardigan] was somewhat taken aback by what he saw as something close to a reversal in your position in relation to him, since he met with you as he heard, a couple of months ago … that you were content with Land Agents managing the Estate. I have told [Lord Cardigan] …, and he largely accepts, that you and any new trustees have no choice over the appointment of Land Agents to manage the Estate, as that is a requirement of the bank ….

Whilst I think [Lord Cardigan] is reluctantly resigned to the way the Estate must be managed he is eager to know more of the detail as to his own role, as he hopes to retain some role in the management.”

By October 2008, as can be seen from a written “Proposal for the Governance of The Savernake Estate”, Mr Moore and Mr Cotton were envisaging that the “strategic and general management of the land” would be placed in the hands of Strutt & Parker. The Estate was “approaching its borrowing limit”, but its bankers, Adam & Company, had indicated that they might consider an increase in the lending limit provided that when Lord Cardigan ceased to be a trustee “suitable arrangements [were] made to protect the assets of the Estate and secure its management in a robust and reliable manner by the use of Retained Agents with relevant expertise and appropriate stature”. As regards Lord Cardigan’s role, the document said this:

“We will need to be explicit over what Lord Cardigan can and cannot do. He may act as the eyes and ears of the retained agents, dealing with access by members of the public eg DofE scheme hikers, Scouts etc. He might also be a useful go-between for minor repairs, but he will not be able to pay bills or authorise their payment. He will not be able to negotiate with tenants and must not hold himself out as being able to do so.”

A footnote added to the document by Mr Ford stated:

“The reason for the Court appointment [of Mr Moore and Mr Cotton] is Richard Ford’s expectation of delays and difficulties being used to frustrate the main cause for the action, i.e. David Cardigan’s absences, illnesses and waywardness and, to an extent, cussedness.”

Mr Ford and his firm were concerned to limit Lord Cardigan’s involvement in the management of the Estate. Mr Moore touched on this concern in an email he sent to Mr Cotton on 2 October 2008 in which he said:

“From [Thring Townsend’s] point of view I should have thought the real and justifiable requirement for the Consent Order [i.e. what was to become the Tomlin order of 21 October 2008] would be for it to contain provisions which substantially exclude Lord Cardigan from management of the Estate subject to the discretion of the Trustees (who may or may not relax this in minor ways as we have discussed) because there is no other effective way of preventing Lord Cardigan from holding himself out as having management of the Land.”

On 17 October 2008, Mr Moore suggested to Lord Cardigan in an email that he (Lord Cardigan) had two options. One was “to refuse to accept the inevitability of falling in with the new regime”. The other was described in these terms:

“Option 1 is to accept that the legal position is you have no choice about whatever the trustees decide to do as far as the running of the estate is concerned. If you press the trustees too hard at this stage to enlarge your role from whatever they say it needs to be you will cause them to shut down that role to a far greater extent and you will have no choice about compliance …. Assume that as the experience of the trustees increases they will realise that the Estate needs your input. After a lot of argument and psychological warfare the Order has now left this possibility of enlargement of your role open ….”

On, it seems, 20 October 2008, Lord Cardigan had a meeting with Mr Moore and Mr Cotton, probably at Mr Cotton’s offices in London. They saw each other again on 17 November, when Mr Cotton visited the Estate.

Issues over Lord Cardigan’s role were already beginning to emerge. On 4 November 2008, Lord Cardigan told Mr Moore, Mr Cotton and Mr David Davidson (a consultant with Charles Russell LLP who was acting for Lord Cardigan in relation to his divorce) in an email that he was going to tell the press that:

“Cardigan remains the Manager as Wilson Cotton always assured me would be the case, but there will be greater involvement by professionals, especially while I remain off the Estate”.

Mr Cotton responded in an email to Mr Moore and Mr William Wyldbore-Smith (of Thring Townsend):

“This is all getting out of control and John [Moore] and I have never told him [i.e. Lord Cardigan] that he would remain the manager. Quite the contrary, the court order specifies otherwise and what we have been exploring is a modest but useful role that softens the blow.”

On 12 November, the Western Daily Press published an article in which Lord Cardigan was quoted as saying that he had resigned as a trustee of the Estate but was “preparing to come back to manage it after spending more than two years abroad recovering from mental illness”. This led Forsters LLP, Viscount Savernake’s solicitors, to say in an email to Mr Cotton:

“Yet again, this is an example of Lord C making untrue claims about his future role in the management of the Estate which will, because of the paper in which they are printed, come to the attention of many of the people living around the Estate and in the local area. It seems to me that there is a serious risk that statements like this will become taken as the truth in the local community, which is clearly extremely undesirable.

… Once the new agents are appointed, would it be sensible to write a letter to anyone living on the Estate, and anyone with whom the Estate has done business in the recent past, giving [Strutt & Parker’s] contact details and stressing that Lord C now has no role in the day-to-day management, with all decisions being made by the trustees in conjunction with S&P?”

In an email to Lord Cardigan and Mr Davidson of 17 December 2008, Mr Moore said that he and Mr Cotton had resisted pressure from Viscount Savernake and Forsters to write to local suppliers advising them that Lord Cardigan “does not have authority to instruct or contract on behalf of the Estate”, but “[h]ornets will be swarming if [Lord Cardigan] holds himself out as being able to contract on behalf of the Estate or engage agents or in any way deal with or deploy the assets of the Estate”. Lord Cardigan replied on 20 December:

“If you are saying BOTH that the breathtakingly-insensitive way that the Trustees have started is likely to be the way they continue, AND that Thomas [i.e. Viscount Savernake] approves of that, then we are looking Partition and Disinheritance. I have already consulted [Mr Davidson] on suitable Solicitors to handle that for me. I can see no viable alternative.

I have lost my marriage.

I am ejected from my Home for years on end.

And now you seek to deprive me of my raison d’etre.”

On 17 December, Mr Moore had sent Mr Davidson an email in which he said this about a meeting with Lord Cardigan and the present Lady Cardigan:

“Saw David and Joanne. Joanne tried hard to encourage David to accept that he should re-establish diplomatic relations with me. David held his head in his hands and was shaking throughout the hour we spoke …. He several times declared that he was trying to deal with the encounter in polite terms ….”

When in January 2009 Mr Cotton said that he was sorry to hear that Lord Cardigan had been suffering from pneumonia, the response was:

“Thank you for that.

But ghastly though it has been, it has not caused me anything LIKE as much pain and worry as you not following through with the undertaking you gave me when we last met, that you would improve on the 1 e-mail a month you were previously sending me. Today’s e-mail aside, you have now changed that to zero e-mails per month.”

Mr Cotton replied that the reason he had not been in contact was that there was nothing much to report.

In the first months of 2009, there were exchanges between Lord Cardigan and Mr Moore, principally about the provision of money to the former, in which Lord Cardigan expressed himself in somewhat intemperate terms. When, for example, Mr Moore remarked that Lord Cardigan probably did not mean to abuse Mr Davidson, Lord Cardigan responded:

“I certainly do mean to abuse all those who have kept me without the means to get myself into Hospital when I have to, and three weeks after that are still preventing me buying food or vital anti-depressants. Your silly idea that this is some weird Cardigan wheeze just makes things worse.”

In other emails, Lord Cardigan addressed Mr Moore as “PEDANT” and said:

“Telling me I have a secret stash out here, and that you don’t believe I am penniless, is the final straw. What part of PISS OFF don’t you get?”

By 11 March, however, Lord Cardigan was telling Mr Moore that he bitterly regretted some of his recent transmissions and that he was “a TOTAL mess right now”.

Shortly after this, Lord Cardigan’s divorce proceedings were brought to a final conclusion. On 17 March 2009, a consent order was made by Coleridge J under which (a) Leigh Hill House (which was valued at £1.25 million) was to be transferred out of the Estate to Lady Cardigan, (b) Lady Cardigan was to be paid a lump sum of £875,000 and (c) there were to be maintenance payments to Lady Cardigan of £45,000 a year.

By the middle of 2009, Lord Cardigan was once again being abrasive in his correspondence with the Trustees. There was tension, in particular, in relation to requests from Lord Cardigan for money. The point can be illustrated with emails sent on 9 June. Early in the evening, Lord Cardigan emailed Mr Moore to say:

“You have known for 10 days that I have just under $3 in the Bank.

You have known for 24 hours that John Hill [i.e. the present Lady Cardigan’s former husband] has now decided to cut off all Joanne’s [i.e. Lady Cardigan’s] alimony payments.

From your silence I take it you are quite content with that state of affairs.”

Mr Moore replied that he had asked Lord Cardigan to call him many times and suggested that he did so between 7.35 pm and 8 pm. At 8.04 pm, however, Lord Cardigan emailed:

“If I don’t eat, you and Monique [i.e. Mr Moore’s wife] don’t get to sleep.”

Three minutes later, Lord Cardigan emailed:

“And after a sleepless night for you, I will see what John Gardiner, Francis Kilpatrick, and Jonathan Peacock [i.e. barristers in the chambers of which Mr Moore is the senior clerk] think of your antics.”

At 8.27 pm, Lord Cardigan emailed:

“Closing down all devices now, until shortly after I calculate you will have fallen asleep.”

The Trustees’ position in relation to Lord Cardigan’s requests can be seen from an email Mr Cotton sent to him on 10 June 2009. The email included this:

“As trustees we are therefore heavily constrained, not least by the current substantial bank borrowings, in the financial assistance that we can give you. In short, the cupboard is bare. You have told us that you need funds. Could you please let us know how much you are seeking and what it is for, so that we can give your request proper consideration?”

On 22 June 2009, £2,000 was transferred to Lord Cardigan, but correspondence ensued as to whether the Trustees had agreed to provide a plane ticket as well. In an email to Mr Moore, Lord Cardigan said:

“Listen you stupid man, don’t you understand what ‘2k and a ticket’ means?”

Towards the end of 2009, Lord Cardigan was sent another £2,000. On 23 November, Mr Moore sent Mr Cotton an email in which he said:

“I don’t think we have sent anything in the way of a sustenance payment to David Cardigan since July. Whilst he has not asked for anything do you think we should send a modest amount off on humane grounds – perhaps £2,000? He must be in some difficulty by now.”

Mr Cotton replied:

“It is very odd that we haven’t had any squawks about this, which indicates that either he is living off the generosity of others, or he has access to a secret piggy bank. I agree that we should send something and am happy for £2,000 to go to his account.”

During his oral evidence, Mr Cotton said of his use of the words “any squawks about this”:

“it is an unfortunate phrase for which I would offer my apology but it is no more than that”.

An exchange of emails in December 2010 points to somewhat better relations between Lord Cardigan and Mr Moore. Lord Cardigan emailed:

“Just realised that I never thanked you for the Savernake photos you sent me the other day. On the assumption that it was meant as an Olive Branch, I should have thanked you right away, and not weeks later.

Thank you for your thoughtfulness.”

In his reply, Mr Moore said:

“I hope no Olive Branches need to be extended – I just knew that the beautiful colours that the Forest takes on as autumn sets in at Savernake would make you feel at home. I know times have been more than tough for you and dire financial straits have made it impossible for me to deliver assistance when I should have liked to. If I may say so, you seem a bit better now and whilst you may not think the same I really don’t think you and I need to overcome past incidents of raised blood pressure due to extreme stress imposed by the outside and perhaps the inside world.”

By the spring of 2011, the Trustees were proposing to sell paintings from the collection that Lord Cardigan’s family had built up. Lord Cardigan was appalled. On 14 March, he sent Mr Moore an email in which he said:

“There can’t be a WORD of truth in the rumour that with me safely out of the country, you are threatening to sell a 500-year old [painting] collection from Savernake Lodge, can there?”

Mr Moore replied:

“Your being out of the country has nothing to do with the steps we are obliged to take to prevent the sale of the last remaining real property assets of the trusts. Due to the divorce settlement and the settlement of fees incurred in connection therewith together with … tax of £249,561.60 just paid on property sales, the current account overdraft stands at £325,835.49 whilst there is also a term loan of £861,883.85 ie indebtedness to the bank of £1,187,716.34

The interest on these loans is insupportable from the regular income of the Estate and the bank requires asset sales to discharge a large slice of the loans. I trust it will be clear that your not being here is not relevant to the options available to manage the debt.

Actually nothing has yet been sold but may well have to be and in any event many of the pictures are deteriorating in storage at the Lodge.”

Within half an hour, Lord Cardigan had emailed back, “Where are the paintings now?” During the next hour, he sent Mr Moore two emails in which he said, “Please tell me where the paintings are now,” and a dozen similar emails followed over the subsequent two days. On 17 March, Mr Moore complained to Lord Cardigan in an email:

“You have been inundating me with telephone calls in the middle of the night, on my mobile at all hours and at my place of work in London. When my wife, myself or work colleagues have answered your calls only breathing has been heard and you have not uttered a word.”

On 18 March 2011, Lord Cardigan suggested that Mr Moore should resign as a trustee if he insisted on proceeding with the sale of paintings. On the same day, a Mr David Bloom wrote on Lord Cardigan’s behalf to Sotheby’s asking for confirmation that no action would for the time being be taken in relation to any paintings it held. Mr Bloom stated in the letter:

“There is a dispute as to the true ownership of these paintings and a process will shortly commence to remove this Trustee [i.e. Mr Moore] from his role, for actions inconsistent with the best interests of the beneficiaries.”

In an email to Lord Cardigan of 27 March 2011, Mr Tim Wilkinson, a brother-in-law of Lord Cardigan, expressed the view that there were “two broad alternatives to consider”. “One,” he said, “is to take a more conciliatory approach to John Moore – and certainly somewhat more so than your most recent correspondence with him. The other is to pursue a more aggressive strategy.”

That same day, Lord Cardigan sought information from Mr Moore with a view to coming up with a “solution to satisfy the bank” that did not involve proceeding with the proposed sale of paintings. On 29 March 2011, however, Mr Cotton said in an email to Lord Cardigan that borrowings could be repaid only “by the sale of assets and in particular those that are unproductive”. That, Mr Cotton said, “regrettably means that we have no choice but to sell the pictures”.

Lord Cardigan returned to the United Kingdom in April 2011 and moved back into Savernake Lodge. On 6 July, he applied for an injunction restraining the sale of 11 paintings, and he was granted relief on a without notice basis shortly before midnight. That order was discharged on 14 July, but Lord Cardigan proceeded with a claim in which he disputed that the Trustees were entitled to sell the paintings at issue. For their part, the Trustees both denied Lord Cardigan’s claims and counterclaimed for relief in relation to some items of family silver which they had discovered that Lord Cardigan was trying to sell. In a witness statement, Lord Cardigan accepted that he had received £1,000 from such a sale but explained:

“Whilst the defendants continue to waste vast amounts of my family’s money on misadventures, they do not provide a penny in a stipend to me, the main beneficiary of the Estate, nor have they done so for many years. I am therefore in a position of having no money nor any income. Naturally, if the ultimate Order of the Court is that I should repay the £1,000 proceeds of sale to the Trustees, then I will do so. But my treatment at the hands of these Trustees is causing me and my new wife enormous hardship.”

The case came before me on 13 and 14 March 2012. On 20 April, I held that the paintings in dispute were held by the Trustees and were not comprised in Lord Cardigan’s lease of Savernake Lodge. I also ordered that lease to be set aside, on the basis that the self-dealing rule applied. There was provision, too, for Lord Cardigan to provide an account of his dealings with the silver.

In the year or so between Lord Cardigan’s return to Savernake Lodge and my giving judgment in the paintings case, there were also disputes over other matters. There were issues, in particular, as to the state of repair of Savernake Lodge and whether a Mr Mark Juniper of Strutt & Parker should be allowed to inspect it on behalf of the Trustees. When on 16 August 2011 Mr Moore suggested in an email that Lord Cardigan try to work with the Trustees “rather than making every single contact with the Trustees an aggressive or unpleasant exchange laced with sarcasm and threats”, Lord Cardigan replied:

“We are working round the clock for your removal.”

Shortly afterwards, Mr Bloom sent Mr Cotton an email in which he said:

“Moreover, it is intolerable from my client’s perspective for matters to continue as they are and changes need to be made and made as a matter of some urgency. So far as we see it, the relationship between the Trustees and Lord Cardigan is quite beyond repair and cannot continue ….

We also consider that the Trustees are in breach of Trust on 14 different grounds.”

On 23 September, Lord Cardigan sent Mr Les Kyle, the Estate foreman, a text in which he said:

“That scum Moore has been defeated. Strutt & Parker have just said that it will NOT be Juniper who comes here.”

On 24 September, Mr Moore found that notices had been placed across the road from his house reading “NO JUNIPER EVER” and “GET OVER IT SCUM”. Also on 24 September, Lord Cardigan emailed Ms Chetwynd-Talbot, who was acting as caretaker of Tottenham House, in the following terms:

“It is very short-sighted of you to ally yourself with creatures like John Moore.

Because when he is torn down from his position at Savernake – and I work tirelessly 7 days a week to that end – his allies will find that their position at Savernake is a thing of the past too.”

Mr Moore understandably asked in an email to Mr Cotton and others, “Who would be a trustee?”

Mr Bloom plays quite a prominent role in this story. I gather that Mr Bloom read law at university, but he did not go on to become either a solicitor or a barrister and in time founded “David and Goliath Group”, which advertises itself as “Helping Individuals Take on the Big Guys” and offers, among other things, debt recovery and litigation advice. On 3 June 2011, Lord Cardigan told Mr Moore that he had appointed Mr Bloom to advise him on “all manner of legal and financial matters relating to Savernake Estate, and all my personal financial affairs”.

Mr Gilead Cooper QC, who appeared for Lord Cardigan with Mr James Weale, said that Mr Bloom’s role in these proceedings has, at times, been unfortunate. I agree. Mr Cooper observed that Mr Bloom had drafted documents that were antagonistic and unhelpful. My own impression (without, I should say, having had the benefit of evidence from him) is that Mr Bloom’s involvement with the matters with which I am concerned has been anything but constructive. Far from pouring oil on troubled waters, Mr Bloom appears to have fomented discord.

Mr Bloom features in relation to events that occurred on 14 October 2011. At 4.05 pm on 13 October, Lord Cardigan told Mr Moore in an email that he had learned of a “possible lucrative deal with the BBC, to do some filming in Tottenham House this winter, with the main part of the filming out in Tottenham Park” and that he proposed to show Tottenham House and Park to the relevant individuals on the next day. Mr Moore complained that he had been given very short notice and insisted on seeing email correspondence. On 14 October, Lord Cardigan, Mr Bloom and two women who appear to have been engaged by the BBC encountered Mr Moore outside Tottenham House. It is a striking fact that the ensuing conversation seems to have been recorded by both Mr Bloom and Mr Moore. It appears that Mr Moore was told that, were Tottenham House selected for the filming, it would be needed for three years and that Mr Moore said that there was no question of making the property available on that basis because the Trustees envisaged selling or leasing it within three years. Lord Cardigan appears to have been abusive to Mr Moore, and Mr Bloom is recorded as telling Mr Moore that there was “a major problem with the Trustees” and that an application was being made to remove them. Mr Bloom pressed Mr Moore on why he was not affording access to Tottenham House and suggested that he did not care about the £175,000 that was said to be available from filming. It is fair, I think, to infer that Lord Cardigan and Mr Bloom were attempting to put Mr Moore in a position where he would provide evidence to support proceedings for the removal of the Trustees.

On 31 October 2011, Mr Bloom wrote to Thrings to invite Mr Moore and Mr Cotton to retire as trustees of the Estate. Mr Bloom said that, if Mr Moore and Mr Cotton did not retire, their removal would be sought on grounds of “endangering Trust property, want of honesty, want of proper capacity to execute their duties, want of reasonable fidelity and hostility”. Among other things, Mr Bloom complained that Mr Moore’s “irrational and rude behaviour meant that there is now no prospect of” a filming rights agreement being concluded with the BBC.

In the spring of 2012, Lady Catherine Brudenell-Bruce competed in the television series “The Voice” as “Bo Bruce”. She eventually reached the final, which took place on 2 June 2012. There was a good deal of press interest.

Lady Catherine had been estranged from her father for a number of years. An email that Lord Cardigan sent to his daughter on 12 October 2007 is indicative of their relationship at that point. After asking “What on earth shall I do?” Lord Cardigan explained that a national newspaper had offered him £25,000 for a story including material prejudicial to Lady Catherine, her mother and her mother’s sister. The email concluded:

“Don’t you think I should take the 25,000 pounds? I think I should.”

In the middle of April 2012, there was email correspondence between Lord Cardigan and Lady Catherine about an article that was shortly to appear in the Mail on Sunday. On 12 April, Lord Cardigan told his daughter that a Sunday newspaper had been working with him on a feature about him and that he had to ask himself whether to “leave it as it is, with its references to the little scorpion that I have as a daughter” or to “go with his better instincts, and say nothing but nice things” about his daughter. Later that day, Lord Cardigan sent his daughter another email dealing with this subject, with the heading “NOW what am I meant to do?” He said that he could tell the newspaper “all sorts of dirt” and that he was sure he could “invent some untrue tasty dirt” about her as well or, alternatively, he could “say nice things”. He continued:

“Which way should I go? And why? And can you tell me in a civil tone?”

By 26 April 2012, Mr Cotton had been told that Lady Catherine was “at the end of [her] tether with [her] father”. On 27 April, Mr Cotton sent Lady Catherine a supportive email. The email included this:

“The note of caution that both Shona [i.e. Ms Shona Alexander of Forsters] and I would sound, having got a better handle on how [Lord Cardigan’s] mind works is that if you send a letter that could goad him into action. From what I can gather, he last made threatening noises on about 16 April, which is before he comprehensively lost the court action that he brought against John and me. If that is not the case, could you let me know? On that basis, our advice, uncomfortable though it might be, is to sit tight and do nothing this weekend. We can then reconsider things on Monday, if we need to.

Just to put your mind at rest on a few things:

1.

If it got to the stage when you felt it necessary to obtain an injunction, I think it would be very difficult for him to obtain legal representation without stumping up quite a bit of money, which he doesn’t have, or giving financial undertakings that he is not in a position to.

2.

He is unlikely to want to represent himself in court given his recent experience and the fairly damning evidence that I gather his e-mails to you contain.

3.

No newspaper group would underwrite his costs unless they thought his stories were likely to sell a shed load of newspapers; and they would certainly not back him if they felt that he was lying.

I hope that helps and that you can go out and kick enormous quantities of ass this weekend.

Huge hugs from me and an exceptionally loud shout from Pippa [i.e. Mr Cotton’s wife].”

Writing to Mr Moore a few days later, Mr Cotton said:

“I will do what I can to shield [Lady Catherine] from her father. Obviously the longer she lasts in the competition, the higher her stock will rise. That means two things:

1.

Her story becomes more valuable. That said, Cardigan has rather shot himself in the foot with his e-mail assertion that he is prepared to lie about her.

2.

Lawyers/record producers etc. are more likely to take a punt on her and underwrite any legal costs in protecting her. In the meantime however, if Shona advises that a letter needs to be sent to Cardigan, I think we should underwrite the cost.”

There continued to be controversy between Lord Cardigan and the Trustees in relation to a variety of matters. These included bills that Lord Cardigan received for electricity. On 30 May 2012, Lord Cardigan told Mr Cotton that he was appalled by the size of a bill, which, he suggested, could be attributed to the fact that a water pump at Savernake Lodge served numerous water troughs elsewhere in the Estate. Mr Moore and Mr Cotton both wrote to Lord Cardigan about the issue. Mr Moore, for example, said that the arrangements relating to the supply of water to troughs around Savernake Lodge had been made before the Trustees were appointed, but that he could “quite understand it would be unfair for [Lord Cardigan] to be expected to pay for the electricity to pump water to the troughs”.

On 4 July 2012, Lord Cardigan appeared before Salisbury Magistrates Court in connection with charges that he had damaged pheasant feeders and stolen a battery and an electric power unit. Bail conditions were imposed that prohibited him from contacting Mr Moore, Mr Moore’s wife, Mr Kyle (the Estate’s foreman), Mr Kyle’s wife and Mr Peter Tilley (the gamekeeper).

That same day, Lord Cardigan’s first wife died of pancreatic cancer. On 10 July 2012, Mr Cotton was told by Lady Catherine’s manager that she was very upset at the thought that her father might come to the funeral. This led Mr Cotton to send Mr Moore an email in which he said:

“As you are aware, during the Voice, Cardigan sent Catherine a series of abusive e-mails …. Her lawyers did the preparatory work for a restraining order, but did not proceed with an application. They did this work on a pro bono basis, but the money has now run out, and if they are to proceed with an order, which is what Catherine wants, their costs will need to be underwritten. I do not know what they are likely to be and have asked her manager to get her lawyer to call me. The police have been put on notice, but will not act without an order being put in place.

As the only source of funds is the estate, this puts us in a tricky position. As a trustee of the children’s trust, and having spoken to Tom [i.e. Viscount Savernake], to whom I am copying this, I am aware that this is something that they both want and whilst I have some sympathy for Cardigan’s desire to attend, I firmly believe that it is in Tom and Catherine’s best interests that he is kept away. There is certainly enough evidence of harassment to justify the order.

Nevertheless as a trustee of the estate as a whole, I am conscious of the need to act fairly on behalf of all the beneficiaries. If the estate were to underwrite the costs, this would undoubtedly be viewed by Cardigan and Bloom as a hostile act. The question then arises as to whether it is in Cardigan’s best interests to have a restraining order put in place. Sadly I believe it is. His presence at the funeral would cause untold distress and could well result in the sort of scene that would jeopardise his already precarious position in the eyes of the police and the courts. A restraining order would therefore be as much for his protection as Catherine’s.

In the circumstances therefore, I believe that it would be appropriate for the trustees to underwrite the costs.”

On 11 July 2012, Lady Catherine applied for, and was granted, a non-molestation order which, among other things, prohibited Lord Cardigan from attending his first wife’s funeral.

The proceedings that are before me now were issued on 5 October 2012. The defendants are Mr Moore, Mr Cotton and Mr Ford (as the other trustee of the Children’s Trust).

Mr Ford did not participate in the trial, but written submissions prepared by Mr Christopher Tidmarsh QC were put in on his behalf. The Marquess of Ailesbury (who was one of those who established the Trust – see paragraph 11 above) and Viscount Savernake (who stands to become absolutely entitled to a majority interest in the Estate) have also outlined their positions in writing.

The Marquess’s views were set out in a letter to the Trustees dated 25 May 2013. This reads as follows:

“As the head of the family, I have been giving careful consideration to the affairs of the Savernake Estate and two things strike me:

1.

Although my son, Lord Cardigan, can undoubtedly be difficult at times to deal with, it seems to me that the level of hostility which now exists between David and the two of you as Trustees to the estate has reached a level whereby all objectivity has been lost and the Trust simply does not and cannot function in anything like the way my Father and I envisaged it should at the time of establishing it.

2.

It has been brought to my attention that in recent years you have paid yourselves in the order of almost £600,000 for services rendered. Putting aside the legitimacy of such gargantuan sums, the practical reality is that the estate simply cannot afford these amounts; especially if, as we have always desired, it is to remain in the hands of The Family.

In the interests of all concerned therefore, and with particular regard to the original purpose of the Trust, I would respectfully ask that you both step down forthwith, in favour of two replacement Trustees; whose nomination I will be more than happy to have a hand in, so as to ensure the best outcome for the estate and its two principal beneficiaries my son David, and my grandson Thomas. Currently we are very far from those objectives being fulfilled and a change of Trustees seems to be the only possible and practical way forward from here.”

Viscount Savernake takes a quite different position. He explained in a letter of 14 May 2014 to Mr Ford, Mr Cotton and Mr Moore that he was “strongly opposed” to the removal of Mr Moore and Mr Cotton as trustees. Viscount Savernake said, for example, the following:

“Having myself discovered the wrongful dealings in and retention of trust monies by my father, Lord Cardigan, prior to his removal as a trustee, I became and remain powerfully opposed to his having any part in the management of the Estate. I am, of course, also vehemently opposed to the appointment of alternative trustees who are unlikely to be in a position to exercise the vigilance which I have been able to rely upon from the present trustees who have since acted to prevent further wrongful acts being perpetrated.

My father’s activities prior to his removal as a trustee and manager of the Estate [were] such that I recognise the considerable advantage there has been in having a locally resident trustee in whom I have had and continue to have considerable confidence and a professional trustee whose experience has been of great assistance to me and my sister.”

Mr Ford would also prefer the Trustees to continue as such. The submissions put in on his behalf warn that the removal of either of the Trustees would cause considerable expense and could also cause delay “at a time when it is imperative that matters proceed apace”. The submissions include, among others, the following comments:

The previous paragraph refers to a contract for the sale of Tottenham House.

Going back in time, in 2002, when Lord Cardigan and Mr Shorey were the trustees of the Estate, they entered into a conditional agreement for the grant to Golf Club Investment Holdings plc (“GCIH”) of a lease of Tottenham House for a term of 150 years. The lease was executed on 11 January 2007. It provided for the demise to GCIH of Tottenham House (including its stable block and the gardener’s cottage) for 150 years from the date of the lease for use as a luxury hotel. The rent was at first to be £50,000 a year and then to rise by stages to £300,000 by the fifth year of the term. In subsequent years, the rent was to be £450,000 a year (subject to review) plus a percentage of revenue.

Unfortunately, as a result of the financial crisis of 2008, GCIH had difficulty in raising funding for its plans for Tottenham House. It made little or no progress with the renovation and redevelopment of Tottenham House, fell into arrears with its rent and allowed the insurance on the property to lapse. On 13 May 2009, the Trustees served a notice on GCIH under section 146 of the Law of Property Act 1925 requiring it to remedy the failure to insure. On 23 August 2010, the Trustees obtained judgment against GCIH for £315,156.84 in respect of outstanding rent and insurance premiums. On 17 June 2011, the Trustees forfeited GCIH’s lease.

Mr Cotton had in mind by October 2009 that a sale of Tottenham House could potentially be desirable. Following a meeting with Viscount Savernake, Lady Catherine Brudenell-Bruce, their mother and Mr Ford, Mr Cotton sent Mr Moore a letter on 21 October 2009 in which he said:

“We then touched on Tottenham House and in particular Tom’s [i.e. Viscount Savernake’s] attitude to the estate. If the deal with Golf Club Investment Holdings fell apart we would have to remarket the property. It was undoubtedly the case that the negotiations with Golf Club Investment Holdings had been made more difficult by David’s [i.e. Lord Cardigan’s] involvement in the deal. Any new occupant would seek a long lease of the property which would effectively take it out of the control of the family for at least the lifetime of the current generation and it may be that a better deal could be obtained by a sale of the freehold. That would also take away the risk for the current trustees of any property that is subject to supervision by English Heritage. Although there would be disappointment on Tom’s part if the house were to be sold, Ros [i.e. Lord Cardigan’s first wife] was surprisingly helpful on this pointing out that one of the earlier Marquess had been keen to get rid of Tottenham House which had been a millstone around the family’s neck for many generations. As Richard Ford pointed out the house was never completed by the Marquess who commissioned it …. If it were to be sold, it could transform the family’s finances enabling them to bring the remaining estate properties into a proper state of repair as well as to diversify away from the estate.”

On 19 August 2013, the Trustees entered into a conditional contract for the sale of Tottenham House. The contract provided for the Trustees to apply to the Court for an order confirming that they could sell the property. On 23 August, the Trustees issued such an application, and – cutting a longer story short – Rose J made an order on 31 March 2014 authorising the Trustees to complete the contract for the sale of Tottenham House. That order was the subject of an appeal to the Court of Appeal, but the appeal was dismissed on 17 October 2014. Vos LJ, with whom Moore-Bick and Black LJJ agreed, concluded that both Rose J and Mr Nicholas Lavender QC (who, sitting as a Deputy High Court Judge, had also dealt with the matter) had been “right to approve the trustees’ decision to sell Tottenham House under the intended sale arrangements” (see paragraph 96 of the judgment). It is worth adding that, by the time the matter was before the Court of Appeal, it was common ground between the parties that Tottenham House had to be sold (see Vos LJ’s judgment at paragraphs 1, 9 and 95).

Mr Cotton explained the Trustees’ thinking in these terms during his oral evidence:

“The whole thrust of what we have been doing, in particular in relation to Tottenham House, is to enable the family to retain what is left. … [I]t would enable repairs to be carried out to retained properties that the family could live in, at least Savernake Lodge and Sturmy House. It would enable Tom Savernake to pay the inheritance tax due on his mother’s death so as to be able to retain Leigh Hill House. That would enable a key part of the Estate to be retained by the family.

Tottenham House is sadly, and for many years has been, a liability rather than an asset. It is something that the family cannot afford to keep but it is the solution to retaining the rest of the Estate in the family’s ownership.”

The Trustees also have in mind the possibility of the Trustbeing wound up once Tottenham House is sold. Mr Cotton said in one of his witness statements:

“It is … envisaged that a sale of Tottenham House might ultimately lead to the [Trust] being brought to an end with distributions being made to [Lord Cardigan] and the beneficiaries of the [Children’s Trust]. As regards [Lord Cardigan], it is envisaged that one of the properties held by the Trustees (Savernake Lodge) would be appropriated to [Lord Cardigan].”

The Estate’s accounts for the year ended 5 April 2008 (i.e. the last year before Mr Moore and Mr Cotton were appointed as trustees) reveal a profit of no more than £13,106 (despite rent of £50,000 from Tottenham House), bank overdrafts of £873,152 and net current liabilities of £899,819.

Lord Cardigan’s divorce resulted in the Trustees having to fund Lord Cardigan’s legal costs (amounting to £289,007.99), the lump sum payment to his first wife of £875,000 and annual payments to his first wife of £45,000, leaving aside the Trustees’ own costs. The Estate has also had to meet costs associated with the application for Lord Cardigan’s removal as a trustee and the proceedings relating to the paintings. The total amount involved is in excess of £600,000.

By 5 April 2013, the Estate’s bank loans and overdrafts had risen to £1,811,449 and its net current liabilities to £1,269,598. The accounts for the year ended 5 April 2013 show that the Estate made a loss in that year of £201,169.

On 30 May 2013, Adam & Company agreed to extend its £1,803,000 loan to the Estate until the end of March 2014, but, when it did so, it said this in a letter to the Trustees:

“As you will appreciate, the Trust does not have sufficient income to warrant a borrowing of this magnitude, and as such I have only been able to secure our ongoing support for a further period on the strict understanding that you are committed to achieving asset sales sufficient to repay the borrowing within this period. You have advised that you are endeavouring to sell Tottenham House, which we see as a sensible proposal.”

On 13 February 2014, Adam & Company explained that it was disappointed to learn that the sale of Tottenham House could still not be completed and that it found itself unable to assist the Trustees further. It warned that it could potentially find itself with no alternative to “the sale (forced or otherwise) of sufficient assets to recover [its] outstanding debt, accrued interest and expenses”.

The Estate’s borrowings are currently of the order of £1.8 million, and it is incurring interest charges of, I am told, some £18,000 a month.

During 2013, there was renewed controversy about, among other things, the supply of water. In April 2013, Lord Cardigan turned off the supply of water to troughs elsewhere in the Estate and also to Crabtree Cottage, which was occupied by a Mr Shuttleworth. Mr Moore visited Savernake Lodge with a view to having the water supply restored. Lord Cardigan referred to what followed in these terms in an email of 15 April to Mr Bloom:

“Thank you for your kind assistance today when The Thief [i.e. Mr Moore] – supported by at least 5 people – used force to try to strong-arm his way into Savernake Lodge, and to forcibly turn my electricity supply to the water pump back on, to force me to pump private Savernake Lodge water to third parties, water for which Moore admitted in writing … that I am not responsible for – in that I am responsible for paying the Electricity bill for the power that takes that water to others.”

Mr Cotton wrote to Lord Cardigan about the matter on 16 April. He said:

“I understand that you have turned off the electricity supply to a pump that provides water to Crabtree Cottage and animal drinking water troughs. The trustees have paid the most recent electricity bills relating to Savernake Lodge and have previously suggested that in the absence of separate electricity metering, a reasonable contribution should be made towards the cost of electricity consumed by other properties, with the balance being charged to your current account.

The trustees will now take steps to have separate electricity meters installed and understand that you will now assume responsibility for settling any bill relating to Savernake Lodge. The trustees will pay any bills relating to the other properties ….

I also understand that you have turned the supply off again. This prevents the tenant Mr Shuttleworth, an elderly gentleman, who I understand is quite frail, from having proper enjoyment of the property he rents from the estate and could be injurious to his health. We therefore require you to restore the supply to his cottage immediately.”

I was shown a video recording that Mr Kyle made of the incident on 15 April 2013. Mr Kyle explained in evidence that he nowadays carries a video camera “24/7” because, things having become “awkward” between Lord Cardigan and himself, Lord Cardigan “would do silly things”. I shall have to refer later in this judgment to what the recording shows.

A multitude of allegations has been advanced against the Trustees in the course of the proceedings. Mr Cooper wisely elected not to pursue quite a number of the complaints. As he presented the case, the following matters fall to be considered:

It is convenient to consider the specific breaches of duty that are alleged before turning to questions relating to the Trustees’ remuneration and coming finally to the wider issue of whether the Trustees should be removed.

It is perhaps worth noting that a number of the allegations that are now being pursued were not advanced (either at all or clearly) in either the original particulars of claim or even the amended version served in January of last year.

It is incumbent on trustees to exercise their administrative powers in the interests of the trust’s beneficiaries. As Megarry V-C explained in Cowan v Scargill [1985] Ch 270 (at 289), “the paramount duty of the trustees” is generally “to provide the greatest financial benefits for the present and future beneficiaries”. A power of investment must therefore be exercised “so as to yield the best return for the beneficiaries, judged in relation to the risks of the investment in question” (Cowan v Scargill, at 287). Trustees may also be obliged to seek to generate income from land comprised in the trust: see e.g. Byrnes v Kendle [2011] HCA 26, (2011) 243 CLR 253, at paragraphs 67 and 119.

Since the property comprised in the Trust “consists of or includes land”, the trust is a “trust of land” within the meaning of the Trusts of Land and Appointment of Trustees Act 1996 (“TOLATA”) (see section 1(1)(a) of the Act). That means that, for the purposes of exercising their functions as trustees, the Trustees have “in relation to the land subject to the trust all the powers of an absolute owner” (see section 6(1) of TOLATA).

By virtue of section 6(9) of TOLATA, the duty of care under section 1 of the Trustee Act 2000 (“the 2000 Act”) applies when trustees exercise the powers conferred by section 6. That duty of care requires a trustee to:

“exercise such care and skill as is reasonable in the circumstances, having regard in particular—

(a)

to any special knowledge or experience that he has or holds himself out as having, and

(b)

if he acts as trustee in the course of a business or profession, to any special knowledge or experience that it is reasonable to expect of a person acting in the course of that kind of business or profession”.

It is to be noted that section 6(9) of TOLATA provides for the duty of care imposed by section 1 of the 2000 Act to apply to trustees when exercising the powers conferred by section 6. The duty is not intended to operate in relation to a decision as to whether a power should be exercised. The Law Commission explained in the report on which the 2000 Act is based (“Trustees’ Powers and Duties”, Law Com No. 260 (1999), at [3.12]):

“The decision whether to exercise a discretion will remain, as it is now, a matter for the trustees to determine. That decision will not be subject to the new duty of care. However, once trustees have decided to exercise a discretionary function which is subject to the new duty, the manner in which they exercise it will be measured against the appropriate standard of care.”

If, however, trustees of land are not subject to the statutory duty of care in relation to, say, a decision as to whether or not to make a repair (as opposed to the manner in which a repair is made) (Footnote: ¹), the duty of care recognised at common law will be applicable. This requires a trustee to exercise the same standard of diligence and care as an ordinary prudent man of business would exercise in the management of his own affairs (see e.g. Speight v Gaunt (1883) 22 Ch D 727, at 739, and Bartlett v Barclays Bank Trust Co Ltd [1980] Ch 515, at 531).

None of those appearing before me suggested that there is a difference of significance between the statutory and common law duties of care. The Law Commission itself expressed the view that its proposals for a new statutory duty of care probably represented “no more than a codification of the existing common law duty” (see “Trustees’ Powers and Duties”, Law Com No. 260 (1999), at [2.35]) (Footnote: ²).

The fact that a trustee could have prevented a loss does not, of course, necessarily mean that he is liable for it (see Bartlett v Barclays Bank Trust Co Ltd, at 530). Nor will an error of judgment automatically result in liability. In Bartlett v Barclays Bank Trust Co Ltd, Brightman J said (at 531-532):

“Nor must the court be astute to fix liability upon a trustee who has committed no more than an error of judgment, from which no business man, however prudent, can expect to be immune: see Lopes L.J. in In re Chapman [1896] 2 Ch. 763, 778:

‘A trustee who is honest and reasonably competent is not to be held responsible for a mere error in judgment when the question which he has to consider is whether a security of a class authorized, but depreciated in value, should be retained or realized, provided he acts with reasonable care, prudence, and circumspection.’”

In Cowan v Scargill, Megarry V-C referred to the possibility of misguided trustees making the correct decision. He said (at 294):

“If trustees make a decision upon wholly wrong grounds, and yet it subsequently appears, from matters which they did not express or refer to, that there are in fact good and sufficient reasons for supporting their decision, then I do not think that they would incur any liability for having decided the matter upon erroneous grounds; for the decision was right.”

This passage from Megarry V-C’s judgment was quoted with approval by Dillon LJ in Nestle v National Westminster Bank plc [1993] 1 WLR 1260, at 1270.

The stable block (“the Stable Block”)adjacent to Tottenham House is itself a building of note. It was, I gather, designed by the architect Thomas Cundy (or “Cundy the Elder”) and built between 1818 and 1820. It has been listed Grade II* since 1966.

By 1998, when Mr Kyle came to work on the Estate, the Stable Block was already in a relatively poor state of repair. Mr Kyle remembers having been quite surprised that the building had been neglected for so long. It has been included in English Heritage’s “At Risk” register since 1998.

Mr Terry Jones, who has many years’ experience in the design and management of development projects, first saw the Stable Block in early 2004 when working for Tripe and Wakeham Partnership (“TWP”), the firm that GCIH had engaged as its project architect for Tottenham House. Between 2003 and 2007, Mr Jones was “Savernake Club Project Team Leader” within TWP. He was subsequently employed by GCIH itself as its “Savernake Club Project Director”, on full-time basis until 2009 and then part-time up to February 2012.

Like Mr Kyle, Mr Jones found the Stable Block somewhat neglected. As he explained in his witness statement:

“The roof appeared to be in a stable state and mostly weather tight, the external walls reasonably sound, although some windows in a poor condition, but the interior appeared in a perilous state with some evidence of past and continuing rainwater penetration.”

During his oral evidence, Mr Jones said that buddleia was already fairly well-established on the Stable Block.

In March 2004, Connell Mott MacDonald, a civil engineering firm, prepared a report on, among other things, the Stable Block. The report included the following observations:

“Our preliminary inspection has revealed that the stable block is in a seriously dilapidated condition having been unoccupied and un-maintained for some considerable time. Whilst the main elevations appeared to be relatively intact, given the sagging of the first floor that was observed, there is cause for concern as to the condition of the timber first floor structure and potentially the timber roof structure. The apparent subsidence of the ground floor cobbles and the apparent cavitation needs further investigation” and

“There was generally noticeable staining to the walls caused by damp penetration and/or condensation.”

The report also stated:

“Due to the limitations of our inspection …, this report does not attempt to document every structural defect and it should therefore be presumed that the buildings will contain numerous other structural defects than those referred to specifically hereinafter.”

TWP commented on the Stable Block in a report dated 23 August 2004. They made the general comment that “Large parts of the interior are derelict, and unsafe”. They noted that there was no apparent evidence of structural movement, but observed too that “window frames are all in poor condition due to lack of maintenance”, that “Some doors are entirely missing, some hanging off their hinges” and that, as regards the first storey, “What timber floor structure does remain is obviously in an extremely poor state, in fact is completely unsafe and appears little short of collapse in some areas”. They also made the following points:

“The main slate roof is in poor condition – lead work and flashings are dislodged. Roof leaks are evident from within the First Storey” and

“Poor stone with blown faces, and of stone damaged and heavily stained due to continual leakage from broken or missing rain water pipes, are all in evidence.”

In October of 2005, Hutton + Rostron Enviromental Investigations Limited (“H + R”) reported on the Stable Block pursuant to instructions from Mr Jones. As was recorded in the report, the aim was “to initially identify damp and decay problems with an emphasis on the first floor and give outline recommendations for cost effective remedial works so as to minimise the risk of damp or decay problems after refurbishment”. The problems identified included these:

As mentioned above, GCIH was granted a 150-year lease of Tottenham House, including the Stable Block, in January 2007. It did not put any repairs in hand. As Mr Jones explained:

“Given the GCIH plan for its entire renovation it was considered at that time by the GCIH company directors, as well as by me, that intermediate care measures were initially unnecessary in respect of the Stable.”

In 2006-2007, lead was stolen from the roof of the Stable Block on at least two occasions. The first theft took place in September 2006 (i.e. before GCIH’s lease began). Lord Cardigan was himself involved in effecting some temporary repairs. There was another theft in August 2007. Temporary “remedial measures” were considered by GCIH, but these were not implemented. Mr Jones said in his witness statement:

“My recollection is that it was thought at the time by the company directors of GCIH that such remedial works were then not warranted given that the – by then anticipated – not too distant commencement of the redevelopment of the stable block would in any case involve the complete overhaul and refurbishment of its roof-scape, as well as the replacement of the entire first floor system.”

By March 2009, GCIH was in arrears with the rent due under its lease of Tottenham House and had also allowed the insurance on the premises to lapse. GCIH attributed the arrears to “the state of the global economy giving rise to difficulties maintaining GCIH’s banking facilities beyond the point at which they had anticipated the full funding to be in place”. At a meeting with the Trustees on 11 March, however, GCIH expressed confidence that all funding would be in place “within the year” and there was reference to a July 2009 start date.

On 13 May 2009, Macfarlanes LLP served on the Trustees’ behalf a notice under section 146 of the Law of Property Act 1925 requiring GCIH to remedy its failure to insure Tottenham House and the buildings associated with it (including the Stable Block).

The Trustees received written advice from Macfarlanes on 22 May 2009. Macfarlanes noted that the initial aim was “to encourage GCIH to re-open a line of communication with the Trustees” to enable the Trustees “properly to identify whether they wish to work with GCIH to take the project forward or whether to ‘cut their losses’ and bring the Lease to an end”. Macfarlanes observed:

“If GCIH reasonably expects to be in a position to continue with this project, the Trustees may consider that it is in the trust’s best interests to continue to work with GCIH, even if the company is not currently in a position to clear all arrears. On the other hand, if the Trustees conclude that there is no realistic prospect of GCIH’s financial position improving, there seems little benefit in allowing the arrears to continue to accrue simply so that there is, on paper, someone ‘on the hook’ for the rent and other charges payable under the Lease.”

In the course of their letter, Macfarlanes said, among other things, the following:

Shortly after receiving the advice from Macfarlanes, Mr Cotton wrote to HSBC. The Trustees also sent a range of interested parties, including Lord Cardigan, Viscount Savernake and Mr Ford, a note on the position in relation to GCIH. The note included this:

“It may be that, ultimately, we shall have to consider forfeiture of the lease and the possibility of marketing the lease together with the planning consents. Forfeiture is not an attractive option from a cost point of view as there is a realistic prospect of GCIH making an application for relief which could take costs to a level of £50,000 to £100,000 and it is likely that the terms on which a new lease is granted would be less favourable to the Estate. We have discovered that the interest of GCIH in the lease has been charged in favour of a bank as security for a substantial loan. We have recently approached that bank to explore the possibility of our acting together to procure that all or a substantial proportion of the monies owed to the Estate are paid.”

In July 2009, in Mr Jones’ words, “a partial collapse occurred within the south west wing of the [Stable Block], at its southerly end, the first floor structure there in part tumbling down into the ground storey”. At this stage, GCIH obtained advice from Scott Wilson, consultant engineers. They reported to Mr Jones in October 2009 that since January 2008 the Stable Block:

“had clearly suffered far more water penetration through the roof …, culminating in wall and ceiling plaster coming down, large areas of the timber plates and infills being saturated, and wet and dry rot evident throughout”.

They expressed the view that “some urgent action is required to stabilise the building structure and prevent further deterioration in the short term, and until the main project is able to get underway”. Among other things, they proposed:

“Carry out temporary repairs to roof finishes to prevent further ingress of water. Allow for replacement of a percentage of rotten gutter boards and supports before applying ‘Derbigan’ waterproof sheeting in lieu of missing lead, and replace missing slates as appropriate” or

“As an alternative …, provide a temporary roof over the whole building enclosed on all sides with ‘monoflex’ sheeting to exclude water ingress. Note: this option will involve a cost for leaving the access scaffold and temporary roof in place until the main project progresses”.

It was common ground between the building surveyors who gave evidence before me that the work proposed would have cost upwards of £200,000.

In the second half of 2009, the Trustees were in contact with both GCIH and HSBC and involved Humberts Leisure as well as Macfarlanes. The Trustees were told of efforts being made to obtain funding for the development of Tottenham House. On 11 December 2009, for example, Mr Jones forwarded to Mr Moore a letter in which a prospective funder indicated that it would be “able to get to our firm commitment no later than January 18^th, 2010”.

By now, Wiltshire County Council (“the Council”) was expressing concern about the condition of the Stable Block. In a letter to Mr Jones dated 21 September 2009 that was copied to Mr Moore and Mr Cotton, Ms Helen Garside of the Council observed that “the failure to carry out remedial works following the lead thefts from the roof and the neglect of basic maintenance such as the removal of vegetation have contributed to substantial water ingress into the structure which has already resulted in the loss of the first floor in one area (the adjacent areas to which are currently unsupported) and to considerable damage elsewhere to timberwork, including damage to principal structural members such as the tie beams”. Ms Garside went on to suggest strongly that arrangements should be made “to sheet over the roof as a temporary measure to protect the building and make it watertight”. On 26 November, Ms Garside wrote direct to Mr Moore and Mr Cotton “to impress upon [them] the Council’s very great concern with regard to the condition of the stable block in particular”. On 31 March 2010, Ms Garside emailed Mr Jones reiterating her concerns, and Mr Moore and Mr Cotton were copied in.

On 4 March 2010, the Trustees had sought further advice from Macfarlanes. The letter said this about the background:

“Some time ago, GCIH had told us they expected to raise ‘interim’ funding, which would meet the cost of the remedial work and should enable them to meet other obligations. Two deadlines have passed by which GCIH had told us they expected complete funding for the project to be in place but no funding at all has apparently been obtained.

We believe that some attempts to raise finance are being made by GCIH but as no satisfactory result has as yet emerged, we are taking parallel steps to establish whether there is a market for the property in the event that GCIH is unable to fulfil its obligations and thus forfeits the lease.”

The letter went on to say that it was “inevitable … that refurbishment work must be carried out and …obviously preferable for the Trustees if this is paid for by GCIH” and that the Trustees proposed “to approach GCIH with the suggestion that a dialogue is commenced with [the Council] and [English Heritage]”.

On 21 April 2010, Macfarlanes sent GCIH on the Trustees’ behalf a letter insisting that a specification for remedial work be agreed. No response having been forthcoming, Mr Moore consulted Macfarlanes about bringing a debt claim against GCIH. Mr Moore said:

“It seems we must now contemplate forfeiture but before doing so think it may be worth issuing proceedings for unpaid rent and insurance. Restricting the action to the recovery of a simple debt will hopefully minimise the costs of proceedings against GCIH. This may provoke a useful reaction from GCIH or HSBC.”

Proceedings to recover £306,583 plus interest from GCIH were issued on 4 August 2010. Judgment was entered in the Trustees’ favour on 23 August.

In October 2010, there seemed to be better news. The Trustees were told by GCIH:

“We have now entered into an exclusive negotiating position with a consortium of Far Eastern investors who in a short period of time, once due diligence is completed, will provide us with the interim funding to not only bring us up to date but also provide for the repairs and all insurance to be met.”

The Trustees were once again disappointed. The note of a conference call on 10 February 2011 records:

“GCIH’s failure to confirm funding was typical of a catalogue of missed deadlines and broken promises by the company over the years and both [Mr Moore] and [Mr Cotton] were now minded, reluctantly, to take the decision to implement forfeiture proceedings.”

Macfarlanes were consulted, and they advised in a lengthy letter dated 17 March 2011. This contained the following about relief from forfeiture:

“We also advised [previously] that a court would be disposed to granting any application for relief from GCIH if it could show that it had remedied, or was remedying, breaches of the Lease. The fact that there is a judgement of the court against GCIH for a substantial amount of unpaid rent and insurance premiums will undoubtedly make the threshold GCIH must pass, before the court decides in its favour, a higher one. Nonetheless, there is a risk that a court may still grant relief in these circumstances.

However, in order to be successful GCIH would need to show that it will satisfy the outstanding judgements, any other outstanding rent and insurance premiums and that it will undertake the necessary repairs to comply with its covenants under the Lease. The court would have to be very convinced before they grant any relief to GCIH. It seems unlikely that GCIH will suddenly be in a position to do this. If it was, it may be that the Trustees would be prepared to let GCIH continue as tenant under the Lease in any event.”

At much the same time, GCIH sought to reopen negotiations with the Trustees. There was a meeting on 24 March 2011, and on 2 April 2011 Mr Jones told Mr Moore and Mr Cotton that a new partner was keen to have a major interest in the development of Tottenham House.

There are references in the correspondence to the financial pressures on the Trustees. For instance, Mr Moore told Lord Cardigan in an email of 13 November 2010:

“Every cheque we write out has to fall within parameters of expenditure set by the bank. We are maxed out on the overdraft and the security we have to offer to obtain a greater overdraft. Not only are we unable to offer more security but we are seriously struggling to service interest payments on the current overdraft. In any event, the bank now insists we REDUCE the overdraft and not increase it.”

In another email to Lord Cardigan, dated 12 July 2011, Mr Moore noted that the Trustees “inherited a mountain of debt with an overdraft virtually on the limit and have limped along ever since”.

On 17 June 2011, the Trustees peaceably re-entered Tottenham House (including the Stable Block).

The Council continued to express concern about the Stable Block. In February 2011, Ms Garside had told Mr Moore that the Council was very reluctant to issue an urgent works notice but, if it did so, it would be for something like sheeting over the roof. On 25 August, Ms Garside said that she and English Heritage felt that “it would be prudent at this stage not only to seek to implement emergency protective works for the stable block before the weather breaks but to also undertake a thorough check of the main house and property as a whole”. Mr Cotton drafted a reply which would have said that the Trustees had “engaged the services of Knight Frank with a view to their valuing [the property] and proceeding with the marketing campaign” and were “optimistic that the property will be disposed of before significant further deterioration occurs”. There is no evidence that an email in these terms was in fact sent, but the Trustees evidently were in touch with Knight Frank around this time in connection with the disposal of Tottenham House.

Knight Frank valued Tottenham House in June 2012 and again in April 2013. The latter report said this about the Stable Block:

“In our opinion the stables should be considered a repairable shell for complete gutting and replacement of all interior components structures and finishes. Some of the interior may be found salvageable on detailed internal inspection once the building has been made safe.”

In August 2013, the Trustees entered into the conditional contract for the sale of Tottenham House (including the Stable Block) that I mentioned in paragraph 73 above. The contract included a provision in these terms:

“Subject to the provisions of this clause 5 no damage or destruction to the buildings on the Property or any deterioration in their condition, however caused, by an event which is neither a risk covered under the Existing Insurance Policy nor a Notional Risk will entitle the Buyer either to any reduction of the Purchase Price or to refuse to complete or to delay completion.”

In broad terms, this appears to have thrown the risk of uninsured damage onto the purchaser.

At the end of last year or the beginning of this one, part of the roof of the north wing of the Stable Block collapsed. Further, the first floor of the building has now collapsed in some four or five locations.

In its present form at least, Lord Cardigan’s case as regards the Stable Block is along the following lines. The Trustees should have taken limited steps soon after their appointment to prevent the condition of the Stable Block from deteriorating further. More specifically, the Trustees should, as a minimum, have arranged for tarpaulins and plastic sheets to be used to cover the vulnerable sections of the roof in the middle of 2009 (once they had received Macfarlanes’ letter of 22 May 2009 - as to which, see paragraphs 107 and 108 above) or at the end of 2009 (after receipt of Ms Garside’s letters of 26 November 2009 – as to which see paragraph 112 above). After 2009, Mr Cooper submitted, it “becomes increasingly difficult for the Trustees to justify total inaction”. It is said that, as a result of the Trustees’ failure, the Stable Block has deteriorated much more than would otherwise have been the case. The additional costs of repair are estimated at between about £2 million and £2.6 million.

I had the benefit of expert evidence from building surveyors as to what tarpaulins and plastic sheets would have achieved. Mr Keith Fuller, who was called by Lord Cardigan, accepted that their effectiveness could be undermined by wind disturbance, but nonetheless considered that they would have reduced water ingress into the Stable Block very substantially. In cross-examination, he explained:

“My interpretation is the fact that the tarpaulins would be 100 per cent effective for the majority of the time. There would be short times under heavy winds and other disturbances where it becomes only 80 per cent effective but subject to the maintenance regime of replacing and repositioning the tarpaulins they would remain close to 100 per cent.”

Preventing water ingress could be expected to have limited damage from wet rot. It would also, as it seems to me, have been likely to reduce frost damage to some extent. Masonry that was already saturated would, however, have taken about two years to dry out, and it would have remained vulnerable to frost in the meantime. As to this, Mr Fuller said:

“Once the stonework is saturated it will take some time to dry out and therefore once saturated, even with the tarpaulin over it, it will still take some considerable time, subject to its effectiveness, to return back to a dry condition and the weakness is that the moisture in the stone will expand and it breaks the surface of the stone under frost conditions.”

Further, tarpaulins would, in my view, have done no more than mitigate damage from buddleia. It was common ground between the experts that buddleia is an invasive shrub that can cause significant damage to the waterproofing of a building, and Mr Fuller accepted that tarpaulins would not necessarily have stopped such damage. Nor would they have prevented dry rot. The chances are, in fact, that tarpaulins would have encouraged dry rot. Dry rot is dormant in saturation conditions and requires less moisture than wet rot to cause damage to timbers. Far, therefore, from inhibiting dry rot, putting tarpaulins on the roof of the Stable Block could have created conditions more congenial to it: as Mr Fuller said, “it could prosper”. Mr Fuller agreed with Miss Clare Stanley, who appeared for Mr Cotton with Mr Jack Watson, that “if tarpaulins were put over and there was dry rot, it could have accelerated dry rot throughout the first floor”.

The experts differed as to the practical significance of these points. Mr Ian McHardy, who was called by Mr Cotton, expressed the view that “[b]y 2010 it was far too late to carry out temporary works in order to prevent the substantial structural damage to the Stable Block, because that damage would already have occurred”. Mr McHardy also said that, while “holding repairs would have helped to reduce damage to the fabric”, they “would not have prevented the need for further, more significant repairs” and, in particular, “would not have prevented the collapse of the first floor”. Mr McHardy said that “the deterioration since 2008 was inevitable given the long term neglect and lack of maintenance … and the lack of repairs carried out prior to 2008”. More specifically, it was Mr McHardy’s opinion that “the first floor and roof timbers collapsed as a result of dry rot or long term wet rot (since the 1990s) rather than because of water penetration post-2008”.

For his part, Mr Fuller agreed with Mr McHardy that “substantial damage to the Stable Block had occurred by 2010/2011”, but he considered that “the majority of damage which has occurred to the Stable Block after 2005 could have been prevented by emergency weather-proofing measures having been taken after 2008”. He said in one of his reports:

“In fact, up until the collapse of the first floor and the roof structure itself, there would have been benefit in protecting the building from further water ingress. In my opinion, it is likely that the collapse of the first floor after 2008 and the recent collapses of the roof would have been prevented if the Stable Block had been weather-proofed (at least a few months) in advance of those collapses albeit, that the primary timbers would have required strengthening thereafter.”

Miss Stanley stressed the role of dry rot. Mr Cooper suggested that her submissions as to the significance of dry rot were opportunistic, prompted by the disclosure during the trial of the Connell Mott MacDonald, TWP and Scott Wilson reports mentioned in paragraphs 100, 101 and 110 above. The materials now available do, however, provide significant evidence of dry rot in the Stable Block. Mr McHardy considers that one of the photographs appended to the Connell Mott MacDonald report appears to show dry rot; H + R found dry rot in a number of locations, albeit that Mr Jones was “pleasantly surprised that it was not more extensive”; Scott Wilson said that wet and dry rots were “evident throughout”; and Mr McHardy said that he found “significant evidence of dry rot in the building now, in 2014”. Mr McHardy said in cross-examination:

“In the case of the north wing, the collapse of the roof there, it is my firm opinion that that was principally caused by dry rot.”

In all the circumstances, I do not think it has been proved that putting tarpaulins and plastic sheets over the Stable Block, in the manner suggested, would have prevented the roof and floor collapses that have occurred even if that had been done as early as November 2008. On balance, it seems to me that the dry and wet rots that were already in the building would have brought about such collapses anyway. Tarpaulins would probably have limited the damage caused by wet rot, but at the expense of aggravating the dry rot. The end result is not likely to have been significantly different. Some or all of the damage could have been prevented if much more extensive (and expensive) measures had been taken, but the work that it is said that the Trustees should have carried out is unlikely to have had that result.

I do not think it has been established, either, that the application of tarpaulins and plastic sheets would have been of real assistance as regards internal fittings and finishes. These were evidently in a very poor state by 2008. A full refurbishment was, it seems, going to be necessary even by that stage. It is not apparent that the fact that tarpaulins and plastic sheets were not put up has made matters significantly worse.

Turning to the external walls, there is a good deal of evidence of damage to these by 2008. For example, the TWP report spoke of “poor stone with blown faces” and “stone damage and heavily stained”, and the photographs appended to the H + R report show extensive spalling and failure of mortar joints. There is, moreover, evidence that buddleia was already fairly well-established by 2004 (see paragraph 99 above), and putting tarpaulins and plastic sheets on the roof would not have removed the buddleia. Even so, I think it likely that, had tarpaulins and plastic sheets been used to cover the roof in (say) 2008, that would have reduced to a degree the damage to the exterior of the Stable Block. Over time, the masonry would have dried out, with the result that frosts (especially in the cold winter of 2009-2010) would have had less effect. Since the tarpaulins would, as Mr Fuller explained, have covered the downpipes and gutters, the defects and blockages in these should also have mattered less.

While, however, it can be inferred that the external walls would have been somewhat less damaged had tarpaulins and plastic sheets been placed over the roof, there is no very satisfactory evidence as to the extent to which matters would have been improved. Mr Fuller’s calculations suggest that “full reinstatement” of the external walls would cost between £154,000 and £176,000, but it is hard to do more than guess at how much lower the cost would have been if tarpaulins and plastic sheets had been used when, for instance, the Trustees were appointed (in 2008) or during 2009 (when, according to Mr Cooper, the tarpaulins and plastic sheets should have been put in place).

In short, it has not, in my view, been proved that using tarpaulins and plastic sheets from 2009 (or a later date) would have avoided the damage to the Stable Block that has occurred, except to an indeterminate extent as regards the external walls.

Another significant point that it is worth making at this stage is that a good deal of the damage to the Stable Block is unlikely to matter much to someone restoring or redeveloping the building. Mr Fuller estimated the costs of “full reinstatement” of the Stable Block to its original condition, i.e. for use as stabling for horses. There can, however, be no likelihood of anyone returning the building to its original condition. No one is now going to use the building simply as a stable. Mr Edward Briggs, the expert valuer called by Lord Cardigan, spoke of the Stable Block offering “a wide range of development possibilities, maybe leisure or residential”, and of a private buyer possibly using the building for staff accommodation or as a leisure complex. As Mr Briggs substantially accepted, no realistic scenario would involve the building being returned to its state when first erected. In practice, as Mr McHardy said, the building “will need to be stripped back to basics”. Mr McHardy also expressed the view, and I accept, that renovation is likely to involve renewal of the first floor. Mr McHardy said:

“in my own opinion and experience of dealing with listed buildings, removal and renewal of the floor is the only way that the building could be given a functional future life”.

Mr McHardy also explained that it was his understanding that GCIH had proposed “to remove the entire first floor internally, or certainly the majority of it”, and “to strip the roof back and virtually reconstruct around the existing trusses”. Similar points emerge from Mr Jones’ evidence. Mr Jones said in his witness statement that GCIH planned a redevelopment of the Stable Block that would have involved “the complete overhaul and refurbishment of its roof-scape, as well as the replacement of the entire first floor system”. In the course of his oral evidence, Mr Jones said, among other things, the following:

[In relation to the H + R report] “given the intention to entirely renovate the stable, while we were interested in finding out all we could regarding the building, individual problems were in themselves not necessarily important …. The intention essentially was to strip it down to the bare fabric, completely re-roof, new drainage system, new everything, so the bottom line was all of it was to be done”

“the whole building would have been repointed”

“it may well have been that we would have removed the internal [windows] anyway” and

“the company directors [of GCIH] and myself debated what we should do regarding the [2007 lead theft], and given at that time it was thought that the renovation would start within a reasonable time period, it was felt that there was no point in spending money doing temporary repairs when we were going to cover the whole thing up anyway.”

The conclusions I have arrived at thus far much reduce the importance of the question of whether the Trustees ought to have put tarpaulins and plastic sheets on the Stable Block. Should, however, they have done so?

In arguing that they should, Mr Cooper stressed that by the autumn of 2009 the Trustees (a) had been made aware of Ms Garside’s concerns (in particular, by the letters that she sent direct to Mr Moore and Mr Cotton on 26 November), (b) knew that GCIH was in difficulties and (c) had been advised by Macfarlanes that they could serve a notice requiring GCIH to carry out repairs and, if GCIH did not comply, do the work themselves and that such an approach would “not adversely affect the landlord’s right to forfeit the Lease” except as regards the section 146 notice that had already been served. In the end, however, I have concluded that the approach adopted by the Trustees was not unreasonable and that no breach of duty has been made out as regards the Stable Block.

In the first place, I do not think the Trustees can fairly be criticised for the approach they took to forfeiture of GCIH’s lease. It is apparent from, for example, the note mentioned in paragraph 109 above that the Trustees gave serious consideration to whether to seek to forfeit the lease in the middle of 2009, but decided against it for rational reasons. As Mr Cotton observed in the note, forfeiture could potentially have given rise to significant legal costs and resulted in Tottenham House being re-let on terms less favourable to the Estate. There was, in the circumstances, sense in contacting HSBC and then, when the Trustees were told of continuing attempts to raise funding, delaying forfeiture. In retrospect, the debt proceedings against GCIH can be seen to have achieved nothing useful, but it is understandable that it was thought at the time that they might “provoke a useful reaction from GCIH or HSBC” (see paragraph 114 above). By 10 February 2011, the Trustees had concluded that they should implement forfeiture proceedings in the light of the “catalogue of missed deadlines and broken promises” by GCIH. In my view, it was reasonable for the Trustees not to take steps to forfeit before this.

The more difficult question, as it seems to me, is whether the Trustees should have put tarpaulins and plastic sheets over the Stable Block in advance of forfeiting GCIH’s lease. On balance, I think it was reasonable for them not to do so. In 2009, when it is said that the Trustees should have acted, little more than two years of GCIH’s 150-year term had elapsed. From the Estate’s point of view, it was obviously preferable that GCIH should bear the cost of any repairs, and at the time the company was insisting that it would be able to proceed with its plans. It was not evident, moreover, that the sorts of work that it is alleged should have been undertaken would have been of much use: on the one hand, there was good reason to think that “anybody buying this property would in any case completely redevelop that or rebuild that structure” (to quote from Mr Cotton) and, on the other hand, it seemed that “minimal work was insufficient, would be insufficient to satisfy the local council” (to quote Mr Cotton again). Mr Cotton said, and I accept, that the Trustees understood from GCIH in 2009-2010 that the Council had rejected a suggestion that GCIH should carry out work of that kind. It is also noteworthy that the Trustees pressed GCIH to effect repairs (for example, in a letter from Mr Moore dated 8 December 2009 and the letter from Macfarlanes mentioned in paragraph 114 above).

Further, I do not think that any allegation of breach of duty can be sustained as regards the period after GCIH’s lease was forfeited (in June 2011). As Miss Stanley pointed out, neither of the building surveyor experts maintained that using tarpaulins would have achieved much by this point: to the contrary, Mr Fuller said that he agreed with Mr McHardy that “substantial damage to the Stable Block had occurred by 2010/2011”. In any case, as explained further in paragraph 170 below, the Estate was desperately short of money by 2011: as Mr Cotton said, “the Trust simply did not have sufficient funds to continue to pay for annual running costs (including the insurance premiums), let alone the cost of repairs”. The Trustees were, in my view, justified in focusing on finding a purchaser: as Mr Cotton explained, the Trustees had “started the process of discussing with Knight Frank what should be done with the building and in particular how it should be marketed, so that the Stable Block and Tottenham House would then be dealt with by a suitable purchaser”, and they were advised “that a reconstruction of the Stable Block would be an extremely expensive prospect and that anyone taking that over would refurbish them completely”.

In the circumstances, I have not been persuaded that the Trustees acted in breach of duty in relation to the Stable Block.

I would add that, even if I had concluded that there had been a breach of duty, I would have taken the view that no loss had been established. As I have said above, it has not, to my mind, been proved that using tarpaulins and plastic sheets from 2009 (or a later date) would have avoided the damage to the Stable Block that has occurred, except to an indeterminate extent as regards the external walls, and I do not think that the extra damage to the external walls is likely to have reduced the value of the Stable Block appreciably. The additional costs must be negligible as compared with both (a) the total value of Tottenham House and the associated buildings and (b) the total renovation/development costs.

Mr Cooper argued that loss should be measured by reference to cost of reinstatement rather than diminution in value. In support of this submission, Mr Cooper referred me to passages in Lewin on Trusts, 18^th ed., including one that explains (at paragraph 39-09):

“[T]he basic rule on the personal liability of a trustee is that he must restore or pay to the trust estate either the assets which have been lost to the estate by reason of the breach of trust or failure to account properly for the trust fund, or compensation for such loss …. If specific restitution of the trust property is not possible, the trustee must pay sufficient compensation to put the estate back to what it would have been had the breach not been committed.”

Mr Cooper also relied on a part of the judgment of Street J in Re Dawson [1966] 2 NSWLR 211 which, as Mr Cooper pointed out, was endorsed by Brightman J in Bartlett v Barclays Bank Trust Co Ltd (see [1980] Ch 515, at 543). Street J said (at 214-216):

“The obligation of a defaulting trustee is essentially one of effecting a restitution to the estate …. The cases to which I have referred demonstrate that the obligation to make restitution, which courts have from very early times imposed on defaulting trustees and other fiduciaries is of a more absolute nature than the common law obligation to pay damages for tort or breach of contract …. Moreover the distinction between common law damages and relief against a defaulting trustee is strikingly demonstrated by reference to the actual form of relief granted in equity in respect of breaches of trust. The form of relief is couched in terms appropriate to require the defaulting trustee to restore to the estate the assets of which he deprived it.”

It follows, according to Mr Cooper, that the Trustees should be ordered to pay compensation calculated by reference to the cost of reinstating the Stable Block. Had the Trustees performed their obligations, the Estate would, it is submitted, have had a building that was in a much better condition than it now is. The Trustees must therefore, so it is said, pay sufficient compensation to allow the building to be restored to that state. Supposing, Mr Cooper said, that “it is going to cost £5 million to restore the Stable Block but fully restored it is only going to be worth £4 million, that is just the price that the trustees pay for allowing this collapse to have occurred in the first place”.

Mr Cooper’s argument, if correct, could have surprising and unattractive implications. Suppose, for example, that trustees carelessly allowed a chattel comprised in the trust to be damaged. Mr Cooper’s submissions would suggest that the trustees would be liable for the cost of repairing the chattel even though (a) the cost of repair was out of all proportion to the value of the chattel, (b) the chattel was of no particular significance to the trust or its beneficiaries and (c) there was no prospect of the repair in fact being undertaken.

The Courts have declined to award compensation based on cost of repair in comparable situations elsewhere in the law. Thus, the decision of the House of Lords in Ruxley Electronics and Construction Ltd v Forsyth [1996] AC 344 shows that the cost of reinstatement will not always be recoverable as damages for defective building work. Lord Lloyd said (at 369):

“If the court takes the view that it would be unreasonable for the plaintiff to insist on reinstatement, as where, for example, the expense of the work involved would be out of all proportion to the benefit to be obtained, then the plaintiff will be confined to the difference in value.”

When deciding whether a claimant is entitled to the cost of reinstatement, his intentions can be material. In Ruxley, Lord Lloyd endorsed (at 373) a submission that absence of a desire to reinstate “may undermine the reasonableness of the higher costs measure”. Lord Jauncey said (at 359):

“Intention, or lack of it, to reinstate can have relevance only to reasonableness and hence to the extent of the loss which has been sustained.”

As Lord Lloyd explained in Ruxley (at 371):

“the principle that a plaintiff cannot always insist on being placed in the same physical position as if the contract had been performed, where to do so would be unreasonable, is not confined to building cases”.

The principle has been adopted in tortious as well as contractual contexts. In Southampton Container Terminals Ltd v Schiffahrtsgesellschaft “Hansa Australia” GmbH (The “Maersk Colombo”) [2001] EWCA Civ 717, Clarke LJ said (in paragraph 43):

“In my opinion a similar approach applies to the measure of damages for both the tortious destruction of real property and for breach of contract in circumstances such as those in Ruxley.”

Later in his judgment, Clarke LJ said (at paragraph 55):

“Thus far the decision and the reasoning in Ruxley support the proposition that, at any rate in the case of damages for breach of contract and for tortious destruction of property, where the claimant asserts the right to recover the cost of reinstatement of the property, he must persuade the Court that it would be reasonable for him to insist upon reinstatement. I can see no reason in principle why the same approach should not be adopted to the tortious destruction of a chattel such as the crane.”

It is Mr Cooper’s contention that trust law is different. He argues that the principles applicable to the calculation of damages in contract and tort do not apply to the assessment of equitable compensation. Whatever, however, may be the case where equitable compensation is awarded as a substitute for performance of a trustee’s obligation to deliver up trust assets in specie, I can see no reason why the Courts should be more willing to award compensation based on cost of reinstatement in circumstances such as those in the present case than they would be to measure damages in that way for breach of contract or a tort.

A passage from Millett LJ’s judgment in Bristol and West Building Society v Mothew [1998] Ch 1 is relevant in this context. Millett LJ said (at 17):

“Although the remedy which equity makes available for breach of the equitable duty of skill and care is equitable compensation rather than damages, this is merely the product of history and in this context is in my opinion a distinction without a difference. Equitable compensation for breach of the duty of skill and care resembles common law damages in that it is awarded by way of compensation to the plaintiff for his loss. There is no reason in principle why the common law rules of causation, remoteness of damage and measure of damages should not be applied by analogy in such a case. It should not be confused with equitable compensation for breach of fiduciary duty, which may be awarded in lieu of rescission or specific restitution.”

In the present case, what is in issue is equitable compensation for failure to exercise skill and care, not equitable compensation in lieu of rescission or specific restitution. Millett LJ’s dictum would accordingly suggest that there is “no reason in principle why the common law rules of causation, remoteness of damage and measure of damages should not be applied by analogy”.

It is apparent from the recent decision of the Supreme Court in AIB Group (UK) plc v Mark Redler & Co [2014] UKSC 58 that Millett LJ’s dictum must be treated with caution. In the AIB case, Lord Reed noted (in paragraph 119) that the dictum “has been questioned, or given a restrictive application, in a number of other jurisdictions”, and he went on to observe (in paragraph 136) that “the liability of a trustee for breach of trust, even where the trust arises in the context of a commercial transaction which is otherwise regulated by contract, is not generally the same as a liability in damages for tort or breach of contract”. Lord Reed also, however, commented (in paragraph 138) that, “[t]o the extent that the same underlying principles apply, the rules should be consistent”. To my mind, the principles underlying the approach that the Courts have taken in Ruxley and The “Maersk Colombo” are applicable, too, in the context with which I am concerned.

Approaching matters on that basis, it seems clear to me that, had any breach of duty been established, it would not have been appropriate to assess damages by reference to the cost of reinstatement. There can be no question of the Trustees, or any successor trustees, in fact carrying out reinstatement work. It is now common ground that Tottenham House needs to be sold, and the Court of Appeal has upheld the approval by Rose J and Mr Lavender of the Trustees’ decision to sell the property pursuant to the conditional contract of 19 August 2013 (see paragraph 73 above). The Stable Block will not therefore be comprised in the Trust for long. On top of that, it is not apparent that reinstatement work would increase the price at which Tottenham House (including the Stable Block) is sold at all, let alone by anything like as much as the cost of repair. In the circumstances, it would not be reasonable for the Trustees, or any successor trustees, to embark on reinstatement even if there were time to do so before the sale of Tottenham House is completed.

In AIB, Lord Reed explained that equitable compensation for breach of trust “aims to provide the pecuniary equivalent of performance of the trust” (paragraph 93) and that the measure of compensation for a breach of trust “will generally be based upon the diminution in the value of the fund caused by the trustee’s default” (paragraph 94). The present case is, in my view, plainly one where, had a relevant breach of trust been established, it would have been appropriate to measure compensation by the resulting “diminution in the value of the fund”, not by the cost of reinstating the Stable Block.

In October 2007, Sturmy House was let to Mr Pete Doherty, the well-known musician, at a rent of £2,950 a month. The agreement provided for a six-month term, but in practice the tenancy was allowed to continue after that period.

During 2011, Mr Doherty’s accountant told Mr Cotton that Mr Doherty had vacated Sturmy House in December 2010 “when it was no longer inhabitable”. It was not, however, apparent to the Trustees at the end of 2010 that Mr Doherty had moved out of the property.

On 8 January 2011, the Trustees learned that a pipe had burst at Sturmy House and a great deal of damage had been caused. Mr Moore spoke in a 14 January email of water having “cascaded down the rear section of the house causing serious damage to ceilings, walls, floors and carpets throughout approximately three quarters of the volume of the premises”.

By 28 January 2011, a loss adjuster acting for the insurer had visited Sturmy House. In a letter to Mr Moore of that date, the loss adjuster said that it was “imperative that further steps are taken to dry out the house to avoid long-term deterioration of the structure”. By 22 February, Mr Moore was able to report to the loss adjuster that four dehumidifiers had been installed, but it is apparent from the documents that they had not arrived until after 12 February. Mr Moore explained in evidence that windows had needed to be repaired first and also that, having regard to the state in which the property had been left by Mr Doherty, there had been “an awful lot of clearing up to do before anybody could go in there and do any work”.

Mr Moore gave this account of progress in an email of 15 February 2012:

“The position with Sturmy is that we have stripped everything down (ceilings, floors and walls where necessary), dried out the masonry, cleaned up the place having disposed of Mr Doherty’s belongings and started to decorate rooms unaffected by the flooding. We had been obliged to down tools for a while until funding was in place before we could continue. We are using inexpensive local contractors but I must be sure we can pay them before commissioning any more work. The work to be done is a mixture of that which I would regard as 100% recoverable from insurers and that which has a large element of betterment about it. Until the strip down it has not been possible to obtain a commitment from insurers to meet the costs of refurbishment ….

When we know how much of the work will be paid for by insurers (hopefully within a couple of weeks) we can commission the work we deem necessary. The various categories of work could, to some extent, be executed concurrently subject to the availability of traders and materials at the required times.”

As is apparent from these comments, the work undertaken at Sturmy House has not been confined to the simple repair of the damage caused by the burst pipe. Thus, the trial bundles include a quotation dated 29 April 2012 for, among other things, the supply and fitting of a new bathroom suite, and the experts’ reports refer, for example, to the replacement of the boiler, kitchen refurbishment and electrical modifications.

On 5 April 2013, an interim payment of £18,000 was received from the insurer. A second and final payment of £47,653.80 was made on 20 August. The basis on which the insurer proceeded can be seen from a letter from the loss adjuster dated 2 July 2013. The letter included this:

“As anticipated, Insurers are prepared to agree a cash settlement in respect of the building repairs at £30,353.80 as claimed, in spite of the fact that not all of the works have yet been completed. However, with regard to loss of rent, the maximum that they are prepared to pay is £35,400 based on 12 months at £2,950 per month. They see no reason why the remedial works could not have been completed within such a period ….”

As yet, the work at Sturmy House has still not been completed and the property has not been re-let.

The relevant experts agree that Sturmy House could have been made habitable within a year after the burst pipe had been discovered. One expert puts the period at nine months, the other at 12 months.

The experts disagree to an extent about Sturmy House’s rental value. The relevant experts say this in their statement of matters agreed and disagreed:

“The Surveyors have been unable to agree an appropriate rental figure for Sturmy House. DH [i.e. Mr Desmond Hampton, called by Mr Cotton] remains at £36,000 per annum (£3,000 pcm) and EB [i.e. Mr Edward Briggs, called by Lord Cardigan] remains at £48,000 per annum (£4,000 pcm). The extent of this disagreement is in part caused by a lack of clarity as to the standard of repair and refurbishment of Sturmy House. The Surveyors do agree that because of its unusual layout and situation, it is a difficult property on which to assess a rental value.”

It is also relevant to note that Sturmy House has been “earmarked” for Viscount Savernake. Mr Moore explained in cross-examination:

“[I]t was a constant consideration of the trustees that [Sturmy House], being the only other … major property on the estate, was something that was earmarked, to use the regularly used language in minutes and other places, for Lord Savernake and I suppose new interest in that property on the part of Lord Savernake was ignited when he asked me, I think at the beginning of 2012, whenever it was, if he could go round the property with his then girlfriend with a view to having a proper look at it.”

Viscount Savernake himself said this about Sturmy House in the letter of 14 May 2014 quoted in paragraph 67 above:

“I had intimated my wish to have Sturmy House retained as the only property, apart from Savernake Lodge, which I might wish to occupy in the near future, should I marry or for other reasons seek accommodation on the Estate. In January 2012 I asked the trustees if I could then visit Sturmy House with a view to forming a view of the property as a home for me. I was shown round the property by John Moore and enquired about the likely availability of the property which at that time I had envisaged possibly wishing to occupy within perhaps six months of the viewing. Mr Moore and Mr Cotton had both told me on a number of occasions that the property was earmarked for my occupation and Mr Moore particularly was aware of my wishes in relation to Sturmy House. I understood that financial pressure may have affected the freedom of the trustees to retain the property in the Estate and make it available for my occupation.”

It is relevant to note, too, that the Trustees have come under pressure from Adam & Company to sell Sturmy House. Mr Moore explained in cross-examination:

“[The bank] wanted us to sell Sturmy House and we wanted to keep it for as long as we could.”

Mr Cotton said that Sturmy House “is seen as, if you like, a core asset of what will be left in the family’s ownership”, but he noted that “there is a strong possibility that if the Tottenham House sale does not happen, Sturmy will be sold”.

Lord Cardigan’s case with regard to Sturmy House can be put simply. He maintains that the Trustees could and should have ensured that the property was ready for re-letting within, at most, 12 months of the discovery of the burst pipe and that their failure to do so has cost the Estate a large amount in lost rental income.

In one of his witness statements, Mr Cotton explained that delays “were caused initially by the need to dry out the building” and that “[a]pproval then had to be obtained from insurers and their contribution agreed”. Mr Cotton also said that the Trustees “did not have available funds to carry out the work that was required even with the insurance claim monies”. In cross-examination, Mr Cotton further stated that the repairs “have been slow largely because we have not had the funds to carry out that work” and that “the repairs had to be carried out in a manner that was commensurate with the funds that we had available for them”. In similar vein, Mr Moore said in his response to the re-amended particulars of claim that completion of the renovation work “is on hold due to the lack of funding available as a result of [Lord Cardigan’s] litigation and the time and costs faced by the Defendants in dealing with two parallel cases at once, namely HC12 [i.e. the present proceedings] and HC13 [the proceedings relating to the sale of Tottenham House]”.

There is certainly evidence that the Estate was short of money in the period after the Trustees learned of the burst pipe. When the discovery was made in January 2011, the Trustees were struggling (and to some extent failing) to keep within their overdraft limit. Liquidity improved in the spring with the grant of a further loan of £450,000 and the receipt of more than £200,000 from Sotheby’s (presumably from the sale of paintings), but the new loan “was effectively regarded as a short term bridging facility by [Adam & Company’s] Credit Sanction team” and the bank still felt it necessary to bounce cheques (including a large one for insurance) in October 2011. In the first couple of months of 2012, the Trustees had an unauthorised overdraft and some more cheques were returned unpaid.

However, the Trust’s financial problems eased somewhat in the course of 2012 as the Trustees obtained a loan of £1.8 million and further sums were received from Sotheby’s and the sale of a property on the Estate. The benefits were reduced both by tax and by the substantial legal fees that the Estate had to bear in connection with the paintings litigation, and the Trustees still had to balance demands (present and foreseeable) on the available money. While, though, the balance on the Trust’s current account was little more than £50,000 at the end of May 2012, it rose to nearly £290,000 at the beginning of June and, after falling back to about £120,000 at one point in August, recovered to roughly £476,000 in September and remained comfortably in excess of £400,000 during the remainder of the year.

In the circumstances, it seems to me that a distinction falls to be drawn between the period up to May 2012 and that after that date. Having regard to the financial pressures on the Trust and the existence of the paintings dispute, the Trustees cannot, as it seems to me, be faulted for failing to make more progress with the repair of Sturmy House by the end of May 2012. By June 2012, however, the Trust had a healthier bank balance, and, having secured victory in the paintings litigation in the April, the Trustees could look forward to further receipts from painting sales. At this stage, the Trustees ought reasonably, in my view, to have put in hand sufficient repairs to allow Sturmy House to be re-let. The costs involved were not so great as to justify further delay.

I do not think the fact that Sturmy House was “earmarked” for Viscount Savernake affects the position. While the Trustees have had in mind the possibility of making Sturmy House available to Viscount Savernake, they have never in fact done so, and, following his mother’s death on 4 July 2012, Viscount Savernake had the use of another property at Savernake Forest, viz. Leigh Hill House. By that stage at least, the Trustees do not seem to have envisaged Viscount Savernake going into occupation of Sturmy House unless and until Tottenham House had been sold and, hence, the Estate had discharged its indebtedness to Adam and Company.

It is not very clear how long it would have taken to re-let Sturmy House had the Trustees decided to press ahead with the requisite repairs in June 2012. As I have mentioned, the experts consider that Sturmy House could have been made habitable within, at most, a year of the discovery of the burst pipe (see paragraph 164 above). By June 2012, it should have been possible to complete the requisite work somewhat more quickly: the property had already dried out and been stripped down, and redecoration had begun. Against that, Mr Briggs noted that it would be more difficult to find a tenant in the middle of winter than during the summer months. Doing the best I can, it seems to me that the Trustees could be expected to have re-let Sturmy House by, say, 1 April 2013. That implies that the Estate has now lost 18 months’ rent.

The question then arises: at what rent would Sturmy House have been let? As indicated above, Mr Briggs estimated the property’s rental value at £48,000 a year, Mr Hampton at £36,000 a year. Explaining his view, Mr Briggs observed that Sturmy House is a very big house and that he personally found it a very nice one. Mr Hampton, in contrast, said that the outbuildings are very dilapidated and that first impressions of the property would not be all that favourable. Both experts accepted that Sturmy House is difficult to value.

Having considered the experts’ evidence and the comparables to which they referred me, I have concluded that the rental value of Sturmy House probably lies between Mr Briggs’ £48,000 and Mr Hampton’s £36,000, but closer to the latter than the former. I think it likely that Sturmy House could have been let at a monthly rent of £3,250, equating to £39,000 a year. Agents’ fees would, however, have reduced the benefit to the Estate slightly.

On that basis, the Estate has lost some £50,000 as a result of the Trustees’ failure to re-let Sturmy House. That equates to £3,250 (the monthly rent) multiplied by 18 (the number of months since 1 April 2013) less, say, £8,500 in respect of agents’ fees.

It is apparent from the evidence that Mr Moore was far more closely involved in matters relating to Sturmy House than Mr Cotton. Even so, it seems to me that both of the Trustees must bear legal responsibility for the lost rent.

Lord Charles Brudenell-Bruce has occupied Little Lye Hill Cottage for many years without paying a market rent for it. During cross-examination, Lord Cardigan said that he thought that Lord Charles had probably had the use of the house since the 1960s.

In 2003, Lord Cardigan and Mr Shorey, as the then trustees of the Estate, granted Lord Charles a five-year tenancy of Little Lye Hill Cottage at a peppercorn rent. The tenancy agreement also provided for Lord Charles to pay 50% of the cost of insuring the property and 50% of any sum that the trustees reasonably incurred in connection with the maintenance, repair and renewal of the property.

The tenancy for which the agreement provided expired at the end of 2007, but Lord Charles continued in occupation of Little Lye Hill Cottage. On 6 March 2008, Lord Charles’ occupation of Little Lye Hill Cottage was discussed at a meeting between Lord Cardigan, Viscount Savernake and Mr Moore. The minutes of the meeting record:

“TS [i.e. Viscount Savernake] raised the issue of occupation by The Marquess of Ailesbury and his half-brother Lord Charles Brudenell-Bruce of Estate property at Peppercorn rents. DC [i.e. Lord Cardigan] said that it was inconceivable to him that Lord Charles B-B or DC’s father should suddenly be charged market rents, and that if it really was the case that the trustees felt unable to sanction occupation by these individuals on favourable terms DC would feel obliged to subsidise the rents out of his share of the partnership so as to maintain the status quo.”

The subject was discussed again when Lord Cardigan, Viscount Savernake and Mr Moore met on 29 May 2008. The summary of that meeting prepared by Lord Cardigan records as follows:

“TS [i.e. Viscount Savernake] expressed concern that his grandfather’s half-brother (Lord Charles Brudenell-Bruce) had two other houses apart from the Savernake Estate cottage that he occupied rent-free. DC [i.e. Lord Cardigan] said that that was not so; Lord Charles had a tiny house in Fulham, and no other properties. And although he lived rent-free, he had agreed with DC some years ago that in future Lord Charles would pay 50% of all insurance bills usually paid by the Estate, and 50% of all repair bills undertaken by the Estate. This Savernake Estate property had recently [been] re-thatched, and Lord Charles had contributed some £7,000 towards that.”

Mr Moore added this to the document:

“With the exception of DC and TS family members entering into occupation of Estate properties in the future should pay rent. As regards those family members presently occupying Estate property rent free the continuation of this arrangement should be referred to the new Trustees and they should be asked to make proposals with which they are satisfied as being consistent with their duties as trustees and equitable as between the relevant family member and the Estate.”

Minutes of another meeting between Lord Cardigan, Viscount Savernake and Mr Moore, on 8 June 2008, include this:

“10.1

There was a discussion of the difficulty of stewardship of the Estate being to strike an acceptable balance between running the Estate efficiently so as to maximise profits on the one hand and on the other hand to exhibit some sensitivity or compassion over the way in which the Estate is run particularly with regard to family members, where such considerations could be difficult or impossible to justify on commercial grounds. It was agreed that at the present time it was difficult for the Estate to bear the expense of rent free accommodation for family members but recognised that fortunes would hopefully change with a rising income stream from the Hotel project.

10.2

JM [i.e. Mr Moore] proposed and it was accepted that the status quo on this issue would be preserved for a period of two years and then reviewed in the light of the ability the Estate assist the family members concerned in letting properties to them at peppercorn rents ….”

Writing to Lord Charles Brudenell-Bruce on 11 November 2008, Lord Cardigan said:

“[Y]ou didn’t mention that you do have unspoken concerns about your tenure of LLH [i.e. Little Lye Hill Cottage] in years to come, which really is a non-issue. Thomas [Savernake] does not want you to leave LLH.”

Mr Cotton referred to Little Lye Hill Cottage in a letter he sent to Mr Moore following his meeting with Viscount Savernake, Lady Catherine Brudenell-Bruce, their mother and Mr Ford on (it seems) 15 October 2009. He said:

“There is an astonishing amount of bitterness towards Lord Charles, which I cannot comprehend. They would all happily turf him out of his house if they could. They seem to hold much store by a letter that is supposedly on Thring Townsend’s files under which it was originally agreed that Charles would pay rent following his thirtieth birthday. They also seemed to think that he had an annual licence to occupy. Whatever the situation, I am sure that the failure of the previous trustees to charge and collect a rent could have created some form of tenancy at will and I am not particularly keen to pursue the point. In any case it does show the three of them in rather a bad light.”

Lord Cardigan’s position as regards Lord Charles Brudenell-Bruce’s occupation of Little Lye Hill Cottage changed during the paintings dispute. Shortly after Lord Cardigan had initiated the proceedings relating to the paintings, Lord Charles said this in an email to Lord Cardigan:

“I fear that I cannot countenance signing a witness statement as there is another ghastly drain ongoing, namely, litigation. Everyone knows of the ruinous divorce settlement and now the current rounds in Court are draining away God knows how much more of money The Estate Does Not Have. If this continues, what will be forced to go next?

If you can see your way to making up with John Moore, even in the capacity of Trustee and fight together rather than against each other as anyone can see in the papers, I can only think that co-operation would be beneficial while I know that confrontation will be utterly disastrous.

David, this litigation Has To Stop.”

On 27 November 2011, Lord Cardigan sent an email in which he pressed Lord Charles to provide a witness statement about the paintings and observed that, were the Trustees to succeed in overturning his lease of Savernake Lodge as “a lease to a member of the family who pays no rent”, that would be the end of the Little Lye Hill Cottage lease too. Lord Cardigan re-sent his email some 38 times over the next fortnight, and on 12 December he sent an email with the subject “Not going away” reading “Reply please Charles”. At 12.38 pm on 17 December, Lord Charles’ wife sent Lord Cardigan a text in which she said that Lord Charles had already made clear in a note to Lord Cardigan that he did not propose to produce a witness statement, but Lord Cardigan had since then:

“continued to send multiple email, texts and have threatened to make phone calls to my business number and there has been other mischief”.

Lord Charles’ wife went on to say that, subject to specified exceptions, she and her husband did not wish to receive further communications from Lord Cardigan as that would cause them further distress. That led Lord Cardigan, half an hour or so later, to say, “Nothing like the distress the permanent loss of [Little Lye Hill Cottage] to you is going to be.”

Lord Cardigan had already said this about Little Lye Hill Cottage in a witness statement dated 21 November 2011:

“Although the Defendants [i.e. the Trustees] do not have to sell assets, should they wish to do so they could sell Little Lye Hill, a valuable non-income producing asset, in preference to the paintings, and this would generate greater after-tax cash-flow than the sale of the paintings. Whilst, as I recall, Little Lye Hill is leased under a 20 year lease, the lease is granted to my Uncle, Lord Charles Brudenell-Bruce on a peppercorn rent. To the extent that the Defendants claim, as they do, that granting a lease on a peppercorn rent comprises a Breach of Trust and thereby makes a lease voidable, then the lease on Little Lye Hill, according to their own logic, is voidable; all the more so because the tenant is not a beneficiary under the Trust.”

At the time, however, Lord Cardigan was denying that the Trustees were entitled to have his lease of Savernake Lodge set aside, and there had been no mention of Little Lye Hill Cottage in the (lengthy) list of allegations Mr Bloom had made against the Trustees in his letter to Thrings of 31 October 2011. In fact, Little Lye Hill Cottage did not feature even in the particulars of claim served in the present proceedings (dated 5 October 2012) or the amended particulars of claim (dated 29 January 2013). The allegation with which I am now concerned was introduced into the particulars of claim when Lord Cardigan re-amended in the latter part of 2013 to allege:

“The Defendants have allowed Lord Charles Brudenell-Bruce to live rent free in Little Lye Hill Cottage for a 5 year period. This has caused the trust to lose around £88,500 in lost rent over the 5 years since the defendants were appointed.”

A few months before this amendment was put forward, Lord Cardigan had written to Lord Charles Brudenell-Bruce to ask him to support the Trustees’ removal. He said:

“I formally ask you to write a letter to Mr David Bloom … stating that you no longer agree with the present Trustees staying in their post, stealing a combined total of over £500,000, and that you now support calls by the Marquess of Ailesbury and the Earl of Cardigan for them to be relieved of their duties. IF you are going to write it, I am going to ask that that letter be received no later than 5pm on Friday.

If no such letter arrives, you will have crossed the Rubicon.”

No response having been received, Lord Cardigan sent Lord Charles’ wife an email on 9 September 2013 in which he said:

“Wilson Cotton – staring at Defeat at my hands in the High Court in December along with his co-Trustee – earlier today ran up the White Flag.

The VERY first item on the new Agenda is the sale of Little Lye Hill.

You have spent your last-ever Summer there.

That is certain.”

It was on 1 October 2013 that Mr Bloom wrote to the defendants to inform them that Lord Cardigan was proposing to re-amend his particulars of claim, including by the addition of the claim in respect of Little Lye Hill Cottage. Asked about this in cross-examination, Lord Cardigan said that the matter had been complicated by the fact that he had “not been able to get from the trustees information as to whether Lord Charles has a new lease, whether they have already written him a new lease or on what terms or any such relevant information”. However, he accepted that he probably did not think that Lord Charles was paying a market rent. He said:

“[H]e being unemployed, I didn’t think his finances would make such a thing possible.”

The evidence as to Viscount Savernake’s position on Little Lye Hill Cottage is in some respects less clear. Asked in cross-examination about whether the position of the beneficiaries was that a full market rent should be charged, Mr Moore thought that there was “no coincidence of that position”. In similar vein, Mr Cotton said that “the opposition to Lord Charles occupying Little Lye Hill is certainly not there any more from Lord Savernake”. It is not apparent from the documents, however, when Viscount Savernake ceased to be opposed to Lord Charles Brudenell-Bruce having the use of Little Lye Hill Cottage rent free. Writing to Mr Cotton in August 2013, Mr Moore said that, were Little Lye Hill Cottage appointed out of the trust to Viscount Savernake, he would “expect Tom [i.e. Viscount Savernake] to want a full market rent from the BBs as he will probably not acknowledge any indebtedness to the previous marquis to see Charles housed”.

A second point on which the evidence is somewhat opaque relates to the question of whether Lord Charles Brudenell-Bruce may have become entitled to remain in occupation of Little Lye Hill Cottage. Mr Cotton was inclined to think that Miss Penelope Reed QC had advised that “there are difficulties in relation to that property [i.e. Little Lye Hill Cottage]”, but, once reminded that Thrings had said that the Trustees have not obtained legal advice on the legal rights of the property’s occupants, he said that he would accept what Thrings said. In the circumstances, it seems to me that, while the Trustees have in mind the possibility that Lord Charles and his wife may be able to assert rights as regards Little Lye Hill Cottage, they have not received legal advice to that effect.

Experts called by the parties have agreed that the rental value of Little Lye Hill Cottage is £17,700 a year.

Against this background, Lord Cardigan complains that the Trustees have never made any attempt to generate income from Little Lye Hill Cottage. Lord Charles Brudenell-Bruce, it is pointed out, is not a beneficiary under the Trust or even the Children’s Trust. While, therefore, it was (and is) proper for the Trustees to allow Lord Cardigan (as a beneficiary) to occupy Savernake Lodge on a rent-free basis, the Trustees have not (so it is said) been entitled to adopt the same approach in relation to Lord Charles.

One of Miss Stanley’s responses was that Lord Cardigan acquiesced in Lord Charles’ occupation of Little Lye Hill Cottage. It is, of course, the case that a beneficiary may be unable to charge trustees with a breach of trust if he himself assented to or concurred or acquiesced in it (see e.g. Underhill and Hayton, “Law Relating to Trusts and Trustees”, 18^th ed., at paragraph 95.1). When deciding whether it is open to a beneficiary to take issue with a breach of trust, “the court has to consider all the circumstances in which the concurrence of the cestui que trust was given with a view to seeing whether it is fair and equitable that, having given his concurrence, he should afterwards turn round and sue the trustees” (Wilberforce J in Re Pauling’s Settlement Trusts [1962] 1 WLR 86, at 108). “[I]t is not necessary that the [cestui que trust] should know that what he is concurring in is a breach of trust, provided that he fully understands what he is concurring in”, and “it is not necessary that he should himself have directly benefited by the breach of trust” (Wilberforce J in the Pauling case, at 108).

Miss Stanley argued that Lord Cardigan concurred or acquiesced in Lord Charles continuing to occupy Little Lye Hill Cottage without being charged a market rent. Mr Cooper, however, relied on the reference in the summary of the 29 May 2008 meeting to incoming trustees being “asked to make proposals with which they are satisfied as being consistent with their duties as trustees and equitable as between the relevant family member and the Estate” (see paragraph 182 above). He suggested, too, that the Trustees should have revisited Lord Charles’ occupation of Little Lye Hill Cottage as the problems with GCIH became apparent. He further argued that it should have been apparent to the Trustees from his 21 November 2011 witness statement (as to which, see paragraph 187 above) that Lord Cardigan was no longer content for Lord Charles to be allowed to remain at Little Lye Hill Cottage without paying a full rent.

To my mind, however, Lord Cardigan can fairly be said to have acquiesced in Lord Charles’ occupation of Little Lye Hill Cottage otherwise than on an economic basis up to October 2013 (when Mr Bloom notified the defendants that Lord Cardigan wished to re-amend his particulars of claim to include a complaint about Little Lye Hill Cottage). Lord Cardigan had himself sanctioned such occupation when he had been a trustee. In the period leading up to the Trustees’ appointment, Lord Cardigan said that it was “inconceivable to him that Lord Charles B-B … should suddenly be charged market rents” and agreed that “the status quo on this issue would be preserved for a period of two years”. Further, although Lord Cardigan referred to the possibility of Little Lye Hill Cottage being sold in his 21 November 2011 witness statement, he did not inform the Trustees that he now considered it unacceptable for Lord Charles to remain at Little Lye Hill Cottage without paying a market rent. While, moreover, Lord Cardigan voiced many other complaints, no allegation relating to Little Lye Hill Cottage featured in Mr Bloom’s letter to Thrings of 31 October 2011, Lord Cardigan’s original particulars of claim in these proceedings or even the amended particulars of claim of January 2013. In all the circumstances, I do not think it can be “fair and equitable” for Lord Cardigan to criticise the Trustees for having permitted Lord Charles to continue in occupation of Little Lye Hill Cottage up to 1 October 2013 or, in fact, for a short period afterwards (which the Trustees could be expected to have needed to consider and respond to Lord Cardigan’s change of heart).

Aside from questions of acquiescence, Miss Stanley suggested that it was reasonable for the Trustees to allow Lord Charles’ occupation of Little Lye Hill Cottage to continue. In this connection, she submitted that Lord Charles has provided valuable consideration by maintaining the property, by bearing half of the costs of external works and insurance, by acting as the Trustees’ eyes and ears and by helping to keep the shoot going. As, however, Miss Stanley accepted, these matters have not amounted to a market rent. In fact, Lord Charles does not seem to have been in a position to act as the Trustees’ “eyes and ears” to that great an extent, and there is relatively little evidence of external work being carried out at Little Lye Hill Cottage. Further, I do not think that the Trustees’ perception that Lord Charles might be able to put forward a legal claim in relation to Little Lye Hill Cottage can provide a sufficient justification for their approach when they have neither received legal advice on the point nor written to Lord Charles to ask him to pay rent or to vacate the property.

It is easy to see why trustees might be reluctant to evict a family member from such a longstanding home. Lord Cardigan’s own position is far from attractive: it seems clear that he changed his mind about Lord Charles’ occupation of Little Lye Hill Cottage because Lord Charles would not do as he wished. As, however, Megarry V-C noted in Cowan v Scargill (at 288), trustees “may even have to act dishonourably (though not illegally) if the interests of their beneficiaries require it”. In the circumstances, it seems to me that, as regards the period since (say) 1 December 2013 (i.e. two months after Mr Bloom’s 1 October letter), Lord Cardigan is in law entitled to say that it was incumbent on the Trustees to ask Lord Charles to pay a market rent for Little Lye Hill Cottage and, if he could not or would not agree to do so, to take steps to evict him.

Of course, the Trustees might not have obtained either a market rent or vacant possession quickly. It is not apparent, however, that the process would be any faster starting from today. On the face of it, therefore, it can, I think, be plausibly maintained that the Trustees have lost 11 months’ rent. That equates to £16,225 using the £17,700 annual rent agreed between the experts. Allowing, say, £2,000 for agents’ fees, I find that loss of £14,225 has been suffered.

That calculation assumes that Lord Charles cannot insist on remaining at Little Lye Hill Cottage on the present basis. Were it to transpire that he has somehow acquired a right to stay at Little Lye Hill Cottage without paying rent, the Trustees’ approach would not seem to have caused the trust any loss. The (limited) evidence before me does not, however, show Lord Charles to have such a right or even a real claim to one.

Another of Lord Cardigan’s complaints relates to herbage. The allegation is put in these terms in the re-amended particulars of claim:

“The Defendants have failed to derive any income from the Estate’s grazing rights in the period since their appointment. Based on grazing of 521.66 acres, at an open market value of £12.50 per acre, the failure of the Defendants to fulfil their duty to act responsibly has caused the trust to lose £6,520.75 per annum or £32,603 in the five year period since their appointment. In addition, when on 30^th March, 2013, the First Defendant [i.e. Mr Moore] signed a Herbage Agreement for nil income, he did so with the ulterior motive of assisting the prosecution of his and the grazier’s complaints to the police about the Claimant.”

In the event, Mr Cooper did not pursue the suggestion that Mr Moore had acted with an ulterior purpose. The case he advanced was to the effect that the Trustees had failed to exercise reasonable care to generate income.

The relevant experts have reached agreement on the income that could have been achieved from herbage/grazing rights. The experts’ joint statement says this on the subject:

“The surveyors AGREED that the area of grazing which they had both adopted was 521 acres. The surveyors AGREED that the grazing area suffered from a number of defects – poor fencing, inadequate water supply, the presence of archaeological trenches across part of the area and environmental restrictions resulting from the Countryside Stewardship Scheme. In these circumstances the surveyors AGREED that it was difficult to be precise about the level of rent that would be achieved in the current market. The surveyors AGREED that the potential rent would be in the region of £5,200 per annum.”

It is apparent from the evidence that since at least 2007 (and probably rather earlier than that) herbage agreements were entered into with “M + C Farming” on an annual basis without any herbage fee being required. The practice began when Lord Cardigan was a trustee of the Estate, and it has been continued since the Trustees’ appointment.

Herbage was touched on only quite briefly during the oral evidence. During his cross-examination, Mr Cotton said:

“Certainly in the earlier years …, the rental agreements or the herbage agreements were dealt with by Strutt & Parker and Mr Moore followed the practice that they had had or the form of their licence that they had put in place, and Strutt & Parker had not charged a grazing rent.”

Mr Cotton had similarly said in a witness statement:

“… I understand that the Claimant had, during his tenure as trustee of the trust, entered into Herbage Agreements with M&C Farming, for which no licence fee was payable.

Finally, it is also important for me to say that I had little involvement in dealing with the Herbage licences during the period of my trusteeship as this was an aspect of the estate management that John [Moore] dealt with. It was not sensible and/or cost effective for John and I both to be involved in every single aspect of the estate’s management.”

There is no real evidence from Mr Moore about herbage. He did not deal with the topic in his witness statement (which was made on 30 September 2013 and so pre-dated the letter of 1 October 2013 under cover of which Mr Bloom provided draft re-amendments introducing the herbage allegation into the particulars of claim). Further, Mr Moore was not asked about herbage rights during his oral evidence. The written closing submissions filed on Lord Cardigan’s behalf state:

“Mr Moore provided no evidence in relation to herbage rights in his witness statement. Consequently, there was nothing which Lord Cardigan needed to challenge.”

While, however, I can well understand why Mr Moore was not asked about herbage rights in cross-examination, I do not think the fact that he had not dealt with the subject in his witness statement meant that Lord Cardigan’s case did not have to be put to him. The decision of the House of Lords in Browne v Dunn (1894) 6 R 67 is authority for the proposition that “Where the court is to be asked to disbelieve a witness, the witness should be cross-examined; and failure to cross-examine a witness on some material part of his evidence or at all, may be treated as an acceptance of the truth of that part or the whole of his evidence”(see Markem Corp v Zipher [2005] RPC 31, at paragraph 58). There has traditionally also been understood to be an (overlapping) obligation on a party to put his case to a witness with relevant knowledge. Thus, Phipson on Evidence, 18^th ed., states (at paragraph 12-35) that, “As a rule, a party should put to each of his opponent’s witnesses in turn so much of his own case as concerns that particular witness”. The introduction of witness statements may possibly have reduced the scope and significance of this principle, but it seems to me to have applied in the present case. That Mr Moore needed to be asked about herbage rights in cross-examination if any allegation relating to them was to be pursued is the clearer, to my mind, in the light of four considerations: first, Mr Cotton stated in his witness statement that Mr Moore dealt with herbage rights; secondly, Lord Cardigan introduced the herbage rights allegation only after Mr Moore had made his witness statement (albeit that (a) Mr Bloom had told Clyde & Co on 9 September 2013 that Lord Cardigan would be making a claim in respect of herbage rights and (b) an order made on 21 November 2013 gave each defendant permission to serve a supplemental witness statement); thirdly, Mr Moore put forward a positive case in relation to the herbage rights allegation in the “response to re-amended particulars of claim” that he served, verified by a statement of truth, on 24 January 2014; and, fourthly, Mr Moore did not have legal representation.

The “response to the re-amended particulars of claim” contained this:

“The grazier who now holds the Herbage Licence was first licensed whilst C [i.e. Lord Cardigan] was a trustee and was managing the Estate. C knows that the Defendants were not able to charge a rent for grazing whilst at the same time claiming the Single Payment Supplement. It is only in the last half year that the Defendants could have charged a rent. C has harassed the grazier extensively. Lambs have had their throats torn out by a dog and leg muscles torn away from the bone. Another mature sheep had an ear almost torn off and another an ear torn off …. D1 [i.e. Mr Moore] received complaints from the grazier following these incidents and D1 gave instructions for notices to be put up in the vicinity of the fields warning dog owners that their dogs were liable to be shot if they interfered with the sheep. C saw fit to tear these notices down. C also regularly walked his dog through fields of sheep in an obvious attempt to provoke the shepherd …. This is another contrived and utterly absurd allegation.”

That Mr Moore was involved in matters relating to herbage is confirmed by contemporary documentation. For example, Mr Moore said the following in an email to Mr Cotton of 22 May 2012:

“I agree about the scrub encroachment in various places and we have already asked the grazier to take on the fencing at the roadside of Tottenham Park (little by little), working to the original fencing line, as Mark [Juniper] suggests.

However, issues which involve the grazier are currently sensitive. The grazier has been assaulted, insulted and threatened by Cardigan and has reported the assault to the police. The grazier called me yesterday to tell me that in addition to the assault Cardigan has let his dog loose amongst the sheep in spite of polite protestations from the shepherd. Having let the dog loose, Cardigan then sat in the field opposite and watched the dog menace the sheep …. The field in question is part of the area the grazier is licensed to use. The grazier we have is extremely useful to us and very cooperative. I think it would be a mistake to lose him. I think the answer to dealing with this is to get the lease of Savernake Lodge firmly signed up so as to make it crystal clear which land is treated as ‘garden’ for Savernake Lodge and which fields are included in the grazing licence. So far as the issues involving the grazier are concerned, I think there is no desperate urgency about the tasks Mark suggests we require him to undertake but I don’t think the negotiation would go well at the present time ….”

During closing submissions, I raised with Mr Cooper the fact that Mr Moore had not been asked questions about herbage (or shooting, to which I shall come in a moment) in cross-examination. Mr Cooper did not suggest that Mr Moore should be recalled, but rather took the position that he needed no more than the expert evidence to make out his case and that the herbage issues are in any event relatively unimportant.

In all the circumstances, I do not consider that I can safely make findings adverse to Mr Moore (or Mr Cotton) in relation to herbage rights. Despite Mr Cooper’s submission to the contrary, I do not think I can proceed on the basis that the expert evidence alone establishes Lord Cardigan’s case. Materials such as the email I have quoted in paragraph 210 above suggest that factual evidence could have a significant bearing on whether the Trustees ought reasonably to have let the herbage rights on terms more favourable to the Estate.

Allegations relating to shooting rights were also introduced into the particulars of claim when they were re-amended in the autumn of last year. As re-amended, the particulars of claim state as follows:

“The Defendants failed to derive any income from sporting rights since becoming trustees which had previously generated either £9,000 or £4,500 per annum from the main syndicate shoot, but instead declined such income as was offered. As a result, the trust has lost £4,500 per year for five years totalling £22,500. The Claimant further avers that this failure to obtain income was influenced by an ulterior motive of the First Defendant [i.e. Mr Moore] preferring the game keeper who has been an active participant in the campaign of harassment orchestrated by the First Defendant ….”

As with herbage rights, Mr Cooper did not in the event maintain that Mr Moore had acted with an ulterior motive. The case he advanced was to the effect that the Trustees had failed to exercise reasonable care to generate income and, more specifically, had allowed Mr Tilley, the gamekeeper, to retain money derived from shooting in 2009-2010 and 2010-2011.

Lord Cardigan’s allegations are limited to one of the shoots that have operated on the Estate: the Savernake Shoot. Lord Charles Brudenell-Bruce wrote to Mr Moore about the Savernake Shoot on 16 April 2009 in these terms:

“In September last year, the Hotel, which had been prevaricating since February, finally announced it would not be taking shooting, despite having said that it would.

This of course placed Mr Peter Tilley, the Shoot Gamekeeper, in an impossible position, with birds ready to go to wood, suddenly no employer and the season opening a few weeks thence ….

While I had been requested by Lord Cardigan to attend the Shoot to oversee the proposed Hotel guests, it was clear that something had to be done quickly to save it. Accordingly, Mr Tilley and myself put together a string of fifty bird days at the lower cost of £120 per gun, to make a last ditch sales pitch an attractive offer.

The local response was extraordinary and Mr Tilley, beaters, pickers up with dogs, turned out for the whole season pro bono. We did this to preserve the stewardship of the Shoot as a holding operation in the interest of the Estate, pending future Hotel participation. We actually ended the season with a small surplus of a few hundred pounds which we offer to the Trustees as indication of good faith. I must add here that what is left over faces a deficit in the face of vehicle repair or replacement, works to holding pens, one of which has been destroyed by deer, to name but two.

Should it be acceptable to the Trustees, Mr Tilley and myself propose a similar operation this year, but with several one hundred bird days, to ensure that he can earn a living wage, the beaters are paid and essential repairs be addressed.

Mr Tilley would of course keep figures for you on chicks, feed, heating, fuel, pens, vehicles, insurance, wages and so forth – I would be available to attend whenever possible.

We can not run this as a commercial venture; we have no experience of ‘Corporate Shooting’ which is alien to us, nor can we afford to pay ground rent up front should that be desired.

What we can offer however is to keep the Shoot going this coming season and to carry out these badly needed repairs and maintenance. Whatever is left over would obviously be offered to the Trustees.”

In March of the following year, Mr Juniper of Strutt & Parker reported to Mr Moore and Mr Cotton on a meeting he had had with Mr Tilley to discuss how the Savernake Shoot had operated over the previous season. Mr Juniper said in his email:

“The sale of the shooting has resulted in gross income in the order of £52,000 whilst the costs associated with laying on those days has been £40,000. These costs include the purchase of the day old chicks, the rearing costs, the feeding costs, beater and pickers up costs, fuel, vehicle repairs and insurance.

The surplus (before costs for Peter’s time) is therefore just under £12,000 and out of this sum Peter [Tilley] has paid himself around £6,500 (which equates to just under £750 per month) by way of drawings for his labour.

The surplus after all costs remaining in the bank account that Peter set up is therefore just over £5,000 and you need to decide whether this surplus should be split between the Estate and Peter, and if so how. I would point out that keepers tips have not been taken into accounts in the figures shown above and it is likely that Peter will have received somewhere in the order of £2,000 cash by way of tips over the course of the season.”

Mr Moore responded in an email to Mr Juniper (copied to Mr Cotton) of 8 March 2010 in which he said:

“I am doubtful that we can decently charge Peter Tilley anything. His drawings against the shoot, even allowing for some tips, can barely be enough for him and his wife and daughter to live on. I doubt he has made any accrual for ATV, new chicks for the next season which he will no doubt be ordering shortly, or maintenance items such as fence posts and netting. It seems to me that Pete Tilley is taking quite a significant risk to obtain an income of less than £10,000 per year. I imagine the whole of the bank balance will go on chicks for the forthcoming season. The shoot continues to be a benefit for us in terms of the land being kept …. I think we should put our heads together again if we were to face paying any rent for the shooting activity. Otherwise, I do not think it would be fair to charge Tilley anything for the shooting activity. Wilson [Cotton] will no doubt communicate his thoughts separately. Tilley’s keeping for the shoot takes him over quite a wide area of the Estate with regularity and this also gives [us] the benefit of a trusted pair of eyes on constant patrol.”

For his part, Mr Cotton said in an email sent on the same day:

“I agree with the sentiments expressed by John [Moore]. As a shoot, this is only just viable and the previous arrangements only worked on the basis of an effective land swap. Can an effective shoot still be operated for which we will not have to pay any rent?”

On 9 December 2011, Mr Moore said this in an email to Mr Cotton:

“Charles [Brudenell-Bruce] has called me to say that Cardigan has again sabotaged the shoot by destroying all the stand markers Pete Tilley had put down for tomorrow’s shoot and also by running a dog through the cover so as to disperse the birds, which will wreck tomorrow’s shoot for which someone has paid a significant sum. Charles and Pete have walked the drives and there are no birds in sight!”

The trial bundles also include a letter dated 21 January 2013 to Mr Tilley from a Dr Baretto. The letter reads as follows:

“Now that we are coming to the end of this shooting season I just wanted to tell you that we were sad to have had to close the Doctor’s Syndicate after so many years, and therefore could not join you.

However the situation with David Cardigan interfering with the shooting and on one particular day Saturday 17^th December 2011, sabotaging the drives, moving the gun pegs, putting his dog into the coverts and making completely inappropriate remarks to one of the guest guns, could not be risked again. I could not let this happen to my syndicate and, as you know, when there was the most trouble (there may have been other days as well) and because of the disruption we had a very poor bag and a ruined day.

If only we can get back to the old days you could count me in to take some shooting. However, in the meantime, good luck with the case and my best wishes to you and Mrs Tilley for this year.”

The relevant experts have agreed that the Savernake Shoot had a rental value of £5,000 a year.

Mr Cotton said in a witness statement that he considered that he and Mr Moore had “taken sensible steps to ensure that the Estate obtains the benefit of shoots on the land and … have done so on a basis that does not require a financial outlay from the trust”. Mr Cotton observed that Lord Cardigan’s actions had “caused these steps now to be compromised”. As regards allowing Mr Tilley to keep the £5,000 surplus in 2010, Mr Cotton said that he had favoured this principally because:

“(i)

it was in the best interests of the Estate to maintain a good working relationship with Mr Tilley and encourage him to continue in this caretaking role; (ii) I believed (and still believe) that this payment represented a sign of the trustees good faith and willingness to reward and seek to maintain Mr Tilley’s loyalty to the Estate; (iii) the drawings Mr Tilley had made for the shoot were very low and did not adequately reward him for the work he had done; and (iv) in operating the shoot Mr Tilley travelled over a wide area of the Estate regularly, and this provided the trustees with the comfort of knowing that they had a trustworthy person looking over the Estate and checking its security”.

Although Mr Moore commented on the shooting rights allegations in the “response to the re-amended particulars of claim” that he served in January of this year, he did not address them in his witness statement. That is unsurprising since, so far as I am aware, Mr Moore had not been given any notice of the allegations by the time he served his witness statement; certainly, the relevant amendments to the particulars of claim had not been put forward. Further, Mr Moore was not asked about shooting rights in cross-examination.

In the circumstances, similar issues arise in this context as with the herbage rights allegation. Once again, I do not consider that I can safely make findings adverse to Mr Moore (or Mr Cotton) without Lord Cardigan’s case having been put to Mr Moore. While it is fair to say (as Mr Cooper did) that Mr Moore provided no evidence in relation to shooting rights in his witness statement, (a) the relevant allegations post-date the witness statement, (b) Mr Moore was clearly involved in the relevant events and referred to them in his “response to the re-amended particulars of claim”, (c) Mr Moore was appearing in person and (d) there was no suggestion that Mr Moore should be recalled so that points relating to shooting rights could be put to him.

Mr Moore has submitted eight invoices for work done as a trustee of the Estate. The earliest invoices are dated 1 June 2009 and deal with events between November 2008 and May 2009. One invoice, headed “General Allocation”, was for £7,500, the other, headed “Cardigan Allocation”, was for £13,800. Two further invoices, dated 31 December 2009 and relating to “trustee services” to 30 September, claimed a total of £17,287.50, split between “General Allocation” of £10,162.50 and “Lord Cardigan Allocation” of £7,125. A third pair of invoices, dated 10 May 2011, related to the period between October 2009 and December 2010 and charged £34,012.50 in respect of “Savernake Estate Account” and £2,250 in respect of “Lord Cardigan Account – divorce related issues”. Finally, invoices dated 17 April 2012 asked for £43,105 for trustee services in 2011 (£28,685 as “Lord Cardigan Allocation” and £14,420 as “General Allocation”). Each of the invoices was approved for payment by Mr Cotton and in fact paid.

It is now common ground that Mr Moore, unlike Mr Cotton, was not in fact entitled to charge for his services. Section 29 of the 2000 Act allows a trustee acting in a professional capacity to be remunerated for his services, but it does not apply to lay trustees such as Mr Moore. Mr Cooper argues that, in the circumstances, Mr Moore must repay the money he has received. Mr Moore, however, asks that I retrospectively authorise the payments to him.

It is not in dispute that the Court has an inherent jurisdiction to authorise the payment of remuneration to a trustee and that that jurisdiction extends to a case where the work for which remuneration is sought has already been done (see Lewin on Trusts, 18^th ed., at paragraphs 20-175 and 20-176). Lewin on Trusts explains (in paragraph 20-175) that the jurisdiction lies in an inherent power to secure the good administration of trusts. Accordingly:

“The court will … not exercise the jurisdiction unless it is satisfied having regard to the nature of the trust, the experience and skill of a particular trustee, the amounts which he seeks to charge when compared with what other trustees might require to be paid for their services, and to all the other circumstances of the case, that it would be in the interests of the good administration of the trust, and therefore of the beneficiaries, to award or increase remuneration. Remuneration may, for example, be awarded if that is necessary in order to secure the services of a particular trustee whose services are of special value to the trust.”

Lewin also states (in paragraph 20-176) the following:

“Awards of remuneration for work done are typically made in cases where work of an exceptional character is performed, for example in relation to the development or realisation of land, and it may not be practicable to assess the size of the task to be performed until after completion, nor might funds for payment of remuneration be available until completion. The administration of trusts might therefore be better promoted if the application is made after rather than before the work is done, when the court is able to assess the merits of the application with the benefit of hindsight. There may, however, be an additional principle which is relevant in such cases, namely that remuneration might be awarded if a trustee has performed services of an exceptionally onerous character which can properly be regarded as wholly outside the scope of any duties which could reasonably have been expected to be rendered by trustees in the normal course of their duties, and have resulted in financial gain to the trust, and for which recompense should be made, not on the basis that there is an implied contract to pay remuneration, but on the basis that the trustees cannot be reasonably expected to have acted as they did without remuneration and the beneficiaries would be unjustly enriched if no remuneration were paid, or that he who seeks equity must do equity. But as the office of trustee is, as such, gratuitous, it will never suffice merely to show that a trustee, even a professional trustee, has acted properly and done work which had to be done, nor merely that the trustee’s scale of charges has become outdated.”

I was taken to one of the cases cited in Lewin, the decision of Judge Paul Baker QC, sitting as a Judge of the High Court, in Foster v Spencer [1996] 2 All ER 672. In that case, the trustees of a cricket club were awarded remuneration for their services in bringing about the sale of the club’s ground for development. Judge Baker said (at 681):

“The services rendered by the trustees were wholly outside their contemplation when appointed. They were appointed as trustees of a cricket club which had its own ground. They found themselves obliged by unforeseen circumstances to dispose of the ground. This proved far more difficult than would normally be expected and made great demands on the expertise of Mr Sealy and of Mr Foster, and on the time of all of them. I have no doubt that if they had realised what they were in for, they would have declined to act unless remunerated in some way.”

Mr Moore accepts that, when Lord Cardigan asked him to be a trustee, he expressly said that he would not take a salary. Lord Cardigan gave this account of events in one of his witness statements:

“So when Moore announced that he would not be taking a salary, I hurriedly told him that in that case I would find some other way to reward him for being a Trustee. I remember suggesting – off the top of my head – that I could give his wife and him a long weekend, at full-board, at the Ritz Hotel in Paris for instance, and he (embarrassed now) said something like ‘Oh well, we’ll talk about that sometime’, and we both rapidly changed the subject, there being no salary to discuss in the first place.”

When asked in cross-examination whether he had told Lord Cardigan that he was proposing to charge for his services, Mr Moore said that he had and referred to emails that he and Lord Cardigan exchanged on 26 April 2009. In the first of these emails, Lord Cardigan said:

“You write as if all the horrors that have happened in my absence are all being instigated by some unknown unseen force, when in fact logic tells me that you are 50% of each and every move.”

Mr Moore replied:

“Then I will charge 50% of the fee WC [i.e. Mr Cotton] is charging.”

Lord Cardigan responded:

“Thereby making a bad situation worse.”

In turn, Mr Moore said:

“Providing SOME compensation for the ill deserved abuse and hours and hours of time I give this undertaking.”

Lord Cardigan finally said:

“It is my GREATEST wish to eventually slice to shreds the amount of time you give the project.”

Mr Moore said that Lord Cardigan’s “Thereby making a bad situation worse” seemed to him to involve reluctant acquiescence in his charging. However, I do not myself read the emails that way. In fact, I do not think it would have been apparent to Lord Cardigan from the emails that Mr Moore was now intending to charge. Lord Cardigan could fairly have taken Mr Moore’s reference to charging half as much as Mr Cotton as a joke.

There is much more force in Mr Moore’s central submission on this aspect of the case: that being a trustee proved to involve immensely more work than he had anticipated. During his oral evidence, Mr Moore commented that he “accepted an offer to do a certain job and the job changed out of all proportions”. Elsewhere in cross-examination, he said:

“[T]he decision to charge, or let’s say the comfort about charging at the time I invoiced … was to do … with covering the enormous volume of administrative work that had not been part of the job description …. The reason for my feeling it was legitimate to charge was because we had moved a thousand leagues away from the clear understanding that we had at the beginning.”

In this connection, Mr Moore referred to the May 2007 email in which Lord Cardigan spoke of Mr Moore being involved in a “small mainly-symbolic way” and suggested that being a trustee would not require Mr Moore “to do anything much, apart from receive the occasional monthly report from [Lord Cardigan] on how things are going on the Estate” (see paragraph 25 above).

Mr Moore also maintains that the work he has undertaken as a trustee has saved the Estate a great deal of money. He is supported in this by Mr Cotton. Mr Cotton said in cross-examination:

“A lot of the work that Mr Moore carried out was necessary. It was for the benefit of the trust and the beneficiaries as a whole. And it was work which would otherwise have had to have been carried out by either me, by Mr Hinkins of Cox Hinkins, by Strutt & Parker or possibly by Thrings, and it was, therefore, more cost-effective for him to carry out that work than those agents.”

It is also important to record that, at the relevant times, Mr Moore (and Mr Cotton) believed that it was legally permissible for Mr Moore to charge for his services. When Mr Cooper put it to Mr Moore that he knew of the rule that non-professional trustees are expected to perform their services free, he denied it, and I accept that evidence. I do not believe that Mr Moore would have taken any money, or that Mr Cotton would have approved its payment, if it had not been thought to be proper for Mr Moore to be paid.

On the other hand, a number of matters may be said to indicate that I should not authorise the payment of remuneration to Mr Moore. They include these:

In the end, while I acknowledge both the amount of time that Mr Moore has devoted to the Estate and that he has had to put up with a great deal of unpleasantness from Lord Cardigan, I have concluded that I should not authorise the payment of any remuneration to him. I should add that, even if I had decided to award remuneration, I would not have awarded it at the rate used for the purposes of Mr Moore’s invoices (viz. £150 an hour). An hourly rate of £25 would have struck me as more appropriate.

The particulars of claim include a claim for Mr Cotton to repay to the Estate “such monies as the Court deems unreasonable remuneration”. Details of the respects in which Mr Cotton is said to have charged too much are set out in a Scott schedule that was served pursuant to an order made by Barling J on 21 November 2013. For his part, Mr Cotton denies that his charges have been in any way excessive and has addressed the points made in the Scott schedule in a response signed on 16 June 2014.

Mr Cooper proposes that this aspect of the case should be adjourned to a Chancery Master for determination, and Miss Stanley is broadly content with that approach. I shall, accordingly, adjourn the issues to a Master.

One issue that was raised during argument was whether Mr Cotton was entitled to charge for time spent on the paintings litigation (as to which, see paragraphs 48 and 49 above). Mr Cooper referred me in this context to the New South Wales case of Toyama Pty Ltd v Landmark Building Developments Pty Ltd [2007 NSWSC 55. There, White J concluded that it was appropriate for some trustees to be allowed remuneration for their work in execution of the trusts. He considered, however, that it was:

“necessary to discriminate between remuneration for the trustees’ own time for work done in further execution of the trusts, and remuneration for their time in defending the claims against them for alleged breach of trust” (see paragraph 42).

White J had earlier said (in paragraph 40):

“[I]t is one thing to say that trustees should be allowed remuneration for their work in executing the trust. It is another to say that they should be allowed remuneration for their own time in defending claims brought against them by a beneficiary in the absence of any entitlement under the instrument creating the trust to be paid such remuneration.”

White J did “not accept that [the trustees] are entitled to remuneration for their own time in defending the claims brought against them” (see paragraph 42).

The present case is, however, distinguishable from Toyama Pty Ltd v Landmark Building Developments Pty Ltd in two important respects. First, Mr Cotton has a pre-existing right to be remunerated for services provided to or on behalf of the Trust. Unlike the trustees in the Toyama case, he is not dependent on the Court authorising such remuneration. Secondly, the paintings litigation did not involve a claim against the Trustees for breach of trust. The case was primarily concerned with (a) whether the paintings in question belonged to a partnership of which Lord Cardigan was a partner or were leased to Lord Cardigan with Savernake Lodge and (b) whether the lease of Savernake Lodge should be set aside as a result of “self-dealing” by Lord Cardigan (see [2012] EWHC 1024 (Ch), [2012] WTLR 931).

In the circumstances, I can see no objection of principle to Mr Cotton charging for time spent on the paintings dispute.

I have concluded above that:

Do these conclusions mean that I should order Mr Moore to repay all the remuneration he has received and both of the Trustees to pay compensation of £64,225?

The principles ordinarily applied in breach of trust cases suggest an affirmative answer to this question. Miss Stanley, however, argued that any payments I might order should be calculated by reference to Lord Cardigan’s 49% interest in the Trust. Any recovery should accordingly, she submitted, be capped at 49% of the total loss found. An order should (it was said) provide either (a) for the Trust to be reconstituted in amounts commensurate with Lord Cardigan’s 49% beneficial share (on the footing that the money would be credited exclusively to that share) or (b) for the payment direct to Lord Cardigan of sums reflecting his share.

Miss Stanley referred me to the decision of the House of Lords in Target Holdings Ltd v Redferns [1996] 1 AC 421. Lord Browne-Wilkinson there noted (at 434) that, with “traditional trusts where the trusts are still subsisting”, “the right of each beneficiary, and his only right, is to have the trust fund reconstituted as it should be”. He explained (at 434):

“The basic right of a beneficiary is to have the trust duly administered in accordance with the provisions of the trust instrument, if any, and the general law. Thus, in relation to a traditional trust where the fund is held in trust for a number of beneficiaries having different, usually successive, equitable interests, (e.g. A for life with remainder to B), the right of each beneficiary is to have the whole fund vested in the trustees so as to be available to satisfy his equitable interest when, and if, it falls into possession. Accordingly, in the case of a breach of such a trust involving the wrongful paying away of trust assets, the liability of the trustee is to restore to the trust fund, often called ‘the trust estate,’ what ought to have been there.”

Lord Browne-Wilkinson went on, however, to say this (at 434-435):

“But what if at the time of the action claiming compensation for breach of trust those trusts have come to an end? Take as an example again the trust for A for life with remainder to B. During A’s lifetime B’s only right is to have the trust duly administered and, in the event of a breach, to have the trust fund restored. After A’s death, B becomes absolutely entitled. He of course has the right to have the trust assets retained by the trustees until they have fully accounted for them to him. But if the trustees commit a breach of trust, there is no reason for compensating the breach of trust by way of an order for restitution and compensation to the trust fund as opposed to the beneficiary himself. The beneficiary’s right is no longer simply to have the trust duly administered: he is, in equity, the sole owner of the trust estate. Nor, for the same reason, is restitution to the trust fund necessary to protect other beneficiaries. Therefore, although I do not wholly rule out the possibility that even in those circumstances an order to reconstitute the fund may be appropriate, in the ordinary case where a beneficiary becomes absolutely entitled to the trust fund the court orders, not restitution to the trust estate, but the payment of compensation directly to the beneficiary. The measure of such compensation is the same, i.e. the difference between what the beneficiary has in fact received and the amount he would have received but for the breach of trust.

Thus in Bartlett v. Barclays Bank Trust Co. Ltd. (Nos. 1 and 2) [1980] Ch. 515 by the date of judgment some of the shares settled by the trust deed had become absolutely vested in possession: see at p. 543A. The compensation for breach of trust, though quantified by reference to what the fund would have been but for the breach of trust, was payable directly to the persons who were absolutely entitled to their shares of the trust fund: see at p. 544. Accordingly, in traditional trusts for persons by way of succession, in my judgment once those trusts have been exhausted and the fund has become absolutely vested in possession, the beneficiary is not normally entitled to have the exhausted trust reconstituted. His right is to be compensated for the loss he has suffered by reason of the breach.”

Miss Stanley suggested that it would be similarly inappropriate to order full reconstitution in the present case. She developed the point in this way in her written closing submissions:

“[I]f Viscount Savernake were to bring a claim in respect of the losses claimed by Lord Cardigan it would, at the very least, be open to Mr Cotton and Mr Moore to argue that Viscount Savernake was unable to bring such a claim. Accordingly, any order requiring the Trustees to falsify the Trust accounts for the full amount of any loss would be inappropriate because it would prejudge the outcome of any acquiescence arguments that the Trustees may make. Any order for compensation must be alive to the existence of those arguments while preserving Viscount Savernake’s future rights to bring a claim.”

To my mind, however, there is no proper basis for departing from the Court’s normal approach in the present case. The relevant trusts have not “come to an end”, and no one has become “the sole owner of the trust estate”. In fact, there is no certainty that Viscount Savernake will ever acquire a vested interest. As things stand, he has, through the Children’s Trust, an interest contingent on attaining the age of 40 years. While there is doubtless every prospect of his doing so, Lady Catherine Brudenell-Bruce would take instead were he to die before the age of 40, and, in the unlikely event of neither Viscount Savernake nor Lady Catherine reaching the age of 40, Lord Cardigan would himself become entitled.

In AIB Group (UK) plc v Mark Redler & Co, Lord Reed said (at paragraph 100):

“The pecuniary remedy for a breach of trust affecting the trust fund cannot involve a payment to a particular beneficiary, unless the beneficiary is absolutely entitled to the fund.”

In the present case, as I have indicated, no one is at present absolutely entitled to the fund.

If, in the context of a trust such as that with which I am concerned in this case, a trustee commits a breach of trust at the instigation, or with the consent, of a beneficiary, there may potentially be scope for impounding the beneficiary’s interest by way of indemnity to the trustee (see section 62 of the Trustee Act 1925 and Underhill and Hayton, at paragraphs 97.1, 97.21 and 97.22). The trustee remains, however, liable to reconstitute the trust fund.

In short, I do not think the payments I shall order should be calculated by reference to Lord Cardigan’s 49% interest in the Trust.

When deciding whether to remove a trustee, the Court’s “main guide must be the welfare of the beneficiaries” (Lord Blackburn in Letterstedt v Broers (1884) 9 App Cas 371, at 387, giving the judgment of the Privy Council).

Proof of actual misconduct on the part of a trustee can potentially warrant his removal. A passage from Story’s “Equity Jurisprudence” that was quoted in Letterstedt v Broers (at 385-386) is relevant here. The passage reads:

“But in 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.”

As is apparent from this passage, breach of duty on the part of a trustee will not necessarily dictate his removal, and, conversely, a trustee can be removed without having committed any breach of duty. Re Wrightson [1908] 1 Ch 703 illustrates the former point. Warrington J there concluded (at 803):

“The trustees were undoubtedly guilty of a breach of trust, and they undoubtedly … expressed views which have occasioned the blame which has been attached to the trustees both by Buckley J. and myself, but, having regard to the fact that the Court has now the power of seeing that the trust is properly executed, to the fact that a large proportion of the beneficiaries do not require the trustees to be removed, and further (and this is of great importance), to the extra expense and loss to the trust estate which must be occasioned by the change of trustees, I think it would not be for the welfare of the cestuis que trust generally, or necessary for the protection of the trust estate, that these trustees should be removed.”

That it can be appropriate to remove a trustee who has committed no breach of duty is evident from Letterstedt v Broers. In that case, Lord Blackburn said (at 386):

“It seems to their Lordships that the jurisdiction which a Court of Equity has no difficulty in exercising under the circumstances indicated by Story is merely ancillary to its principal duty, to see that the trusts are properly executed. This duty is constantly being performed by the substitution of new trustees in the place of original trustees for a variety of reasons in non-contentious cases. And therefore, 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.”

Lord Blackburn went on (at 386):

“As 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 ….”

In Kershaw v Micklethwaite [2010] EWHC 506 (Ch), [2011] WTLR 413, I expressed the view (at paragraph 11) that:

“a breakdown in relations between an executor and a beneficiary will be a factor to be taken into account, in the exercise of the court’s discretion, if it is obstructing the administration of the estate, or even sometimes if it is capable of doing so”.

When deciding whether a trustee should be removed, a breakdown in relations between the trustee and a beneficiary must, as it seems to me, be taken into account in similar circumstances. On the other hand, “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” (Lord Blackburn in Letterstedt v Broers, at 389). In National Westminster Bank plc v Lucas [2014] EWHC 653 (Ch), Sales J observed (at paragraph 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.”

It will be apparent from what I have said earlier in this judgment that:

As I have said above, the fact that a trustee has failed in his duties will not invariably mean that he should be removed as such. In Mr Moore’s case, however, the breakdown in his relationship with Lord Cardigan also seems to me to point in the direction of removal. The lion’s share of responsibility for that breakdown ought, I think, to be laid at Lord Cardigan’s door (and that of Mr Bloom). In fact, from at any rate the summer of 2011 Lord Cardigan and Mr Bloom were aiming to achieve just such a result. It is hardly, therefore, surprising that the friendship that once existed between Lord Cardigan and Mr Moore appears to be irrevocably fractured. The fact remains that there is now a very serious estrangement between the two.

A few examples will serve to illustrate the point. Mr Moore has either initiated complaints or provided evidence in support of some 17 criminal accusations against Lord Cardigan. While some of these have not been proceeded with or remain to be tried, it was, it seems, following Lord Cardigan’s acquittal on two charges in January 2013 that Mr Moore (as explained by Lord Cardigan’s second wife, the present Countess of Cardigan) lost his temper and drove a Land Rover across the lawn at Savernake Lodge. Lady Cardigan also testified without contradiction about an occasion when Mr Moore “screamed at [Lord Cardigan] to ‘Get off your lazy backside and get a job’” and another when Mr Moore turned his car round and “began to drive slowly alongside us shouting at [Lord Cardigan] to talk to him” before “taunting [Lord Cardigan] about his relationship with his children”. In similar vein, the video of the incident on 15 April 2013 that I mentioned in paragraph 84 above might be said to show Mr Moore taunting Lord Cardigan about, among other things, his relationships with his adult children and Lord Charles Brudenell-Bruce and his wife.

On the other hand, I do not think it could make sense for Mr Moore to be removed as a trustee while the existing contract for the sale of Tottenham House is proceeding to completion: that could create needless disruption. I am also conscious that Viscount Savernake and Mr Ford, who have a majority stake in the Trust, would prefer Mr Moore to remain as a trustee (see paragraphs 67 and 68 above) and that (since I doubt very much whether anyone but a professional could be an appropriate substitute) replacing Mr Moore is likely to occasion considerable extra expense; an order for Mr Moore’ removal as a trustee will probably, therefore, result in the precise reverse of the reduction in costs to which the Marquess of Ailesbury aspires (see paragraph 66 above). The extra expense will be mitigated to an extent if the Trust is wound up after the sale of Tottenham House (as may very well be desirable), but the fact that the Trust’s life expectancy may now be short could also be said to favour Mr Moore’s retention as a trustee: it would not, perhaps, be for long.

In the end, I have concluded that the right course is to order Mr Moore’s removal as a trustee immediately after the sale of Tottenham House has been completed. Even if it is then decided that the Trust should be brought to an end, important decisions will remain to be taken, and I do not think it would be in the interests of the beneficiaries as a whole for Mr Moore to be involved in them. He might well struggle to approach them impartially, with a mind uncoloured by his personal feelings about Lord Cardigan. At any rate, there would not, as it seems to me, be a sufficient appearance of fairness.

In different circumstances, Mr Moore would, I am sure, have performed his duties as a trustee of the Trust perfectly well. As things are, however, I consider that he should be removed as a trustee.

The position is rather different as regards Mr Cotton. Mr Cotton has considerable expertise and experience in trust matters, and, while I have found him to have failed in his duties in relation to Sturmy House and Little Lye Hill Cottage, he was not much involved in matters relating to the former and his approach to Lord Charles Brudenell-Bruce’s occupation was understandable. Moreover, relations between Mr Cotton and Lord Cardigan are nothing like as bad as those between Mr Moore and Lord Cardigan. In fact, Mr Cotton had not met Lord Cardigan many times before this trial; Lord Cardigan has himself said that he has no personal animosity to Mr Cotton; Mr Cotton explained during his oral evidence that he would like to have “a cordial relationship, a friendly relationship” with Lord Cardigan; and Mr Cooper accepted during closing submissions that Mr Cotton had done his best to remain professional. Mr Cooper submitted that Mr Cotton had not tried to get onto Lord Cardigan’s wavelength, but Lord Cardigan can hardly be said to have made that easy and I am inclined to think that Lord Cardigan would have fallen out to at least some degree with more or less any trustee who disagreed with his views on the future of the Trust. Further, Viscount Savernake and Mr Ford are keen for Mr Cotton to stay on as a trustee, and there is force in Mr Ford’s comment (see paragraph 68(ii) above) that keeping at least Mr Cotton as a trustee would provide an element of continuity and save expense. The replacement of Mr Cotton would inevitably have cost implications as his successor (who would be bound to be a professional) would have to spend time familiarising himself with matters relating to the Trust.

Mr Cooper drew attention to the November 2009 email in which Mr Cotton said that it was odd that there had not been any “squawks” from Lord Cardigan (see paragraph 42 above). As Mr Cotton himself said, the wording was unfortunate. I do not regard it, however, as of great importance.

Mr Cooper criticised the approach Mr Cotton (and Mr Moore) took to Lord Cardigan’s divorce proceedings. The Trustees’ only proper role in relation to those proceedings, Mr Cooper said, was to provide the Court with factual information about Lord Cardigan’s assets; they had no power to take an active role. However, it is not apparent that what the Trustees did was not in fact to the advantage of the Trust, and Mr Cooper was prepared to accept that the Trustees believed themselves to be protecting Lord Cardigan’s interests as well as the Children’s Settlement. In the circumstances, I cannot see that the Trustees’ involvement can provide any real support for Mr Cotton’s removal as a trustee.

Mr Cooper was also critical of Mr Cotton’s part in the events culminating in Lady Catherine Brudenell-Bruce’s application for a non-molestation order (as to which, see paragraphs 55-63 above). Here, he said, Mr Cotton can be seen to have taken Lady Catherine’s side against Lord Cardigan. However, Mr Cotton said at the time that he believed that it was in Lord Cardigan’s own interests (as well as Lady Catherine’s) for him (Lord Cardigan) to be prevented from attending his first wife’s funeral, and I can understand how, in the particular circumstances, he could have taken that view. For his part, Mr Cooper was prepared to go as far as saying that Mr Cotton may have succeeded in persuading himself that what the Trustees were doing was in Lord Cardigan’s interests. My overall view is that Mr Cotton’s response to the difficult situation that presented itself was not such as to lend substantial support to the case for his removal as a trustee.

Mr Cooper referred, too, to the Trustees’ attitude to requests from Lord Cardigan for financial assistance. At the same time, he observed, as opposing Lord Cardigan’s modest requests for funds, the Trustees were volunteering to meet various expenses on behalf of Viscount Savernake and Lady Catherine. However, the Trustees have throughout had to balance competing demands on the limited money available, and the Children’s Trust, Viscount Savernake and Lady Catherine have received far less from the Trust than, say, the cost to the Trust of Lord Cardigan’s divorce or the legal expenses arising from the paintings litigation instigated by Lord Cardigan.

Mr Cooper suggested that the fact that Mr Cotton is a trustee of the Children’s Trust as well as the Trust gives rise to an unacceptable conflict of interest. Mr Cotton cannot, he said, be expected to do both jobs. As, however, Miss Stanley pointed out, any such conflict was inherent in the arrangements established pursuant to the 2008 Tomlin order, to which Lord Cardigan consented.

In all the circumstances, I have decided that Mr Cotton should remain as a trustee. While, therefore, Mr Moore will be replaced as a trustee when the sale of Tottenham House has been completed, Mr Cotton will stay on. The trustees of the Trust will thus become Mr Cotton and Mr Moore’s successor. Unless the parties agree on a suitable alternative, that successor should, I think, be one or other of the solicitors with Bircham Dyson Bell who have been put forward by Lord Cardigan. Both of them strike me as suitable candidates.

I can summarise my main conclusions as follows:

While I hope I am mistaken, I fear that Lord Cardigan may seek to use things I have said in this judgment to blacken Mr Moore’s name in the press and local area. As I have said, however, I regard Lord Cardigan (and Mr Bloom) as principally responsible for the breakdown in the relationship between Mr Moore and Lord Cardigan, from whom Mr Moore has had to put up with a great deal of unpleasantness despite the amount of time that he has devoted to the Estate. It would, in particular, be wrong for Lord Cardigan to describe Mr Moore (as he has in the past) as a “thief”.