MANTE.B .'1öN 
Neuü( Ghåion
23236 )
r Sts and Pr bate
cite Lano |
nndo
met. I ? 4? 2019
Before :
MASTFR PRICE
Bet" ecn 
Clgimqnt
• and •
(1) CD Defendant
(3) GD
(4) JID
(5) 11)
(6) JD
(7) KD
(8) LM
(9) NM
Richard Wilson QC (instructed by Brynn Cave Leighton Paisner 1.4LP) tbr the Claimant Emily Campbell (instructed by Kuit Steinart Levy) Ibr Defendants 1-3 Defendants 4, 5t 6. and 7 did not appcar. 
8 and 9 appeared in person.
I learing dates: '30 and 31 May 2018
Approved Judgment
I direct (hut pursuant to CPR PI) 39A para 6.1 no official shorthand notc shall be taken of this
Judgment and that copies of this version as handed down may be treatcd as authenttc
All 11+20174)02797
MAS'IER PRICE
The claimant is the trustee of trusts. natnel)' the Will 1 rust and the Grandchildren's rust, 'l hese "ere established by the iirsl parents and the grandchildren in question ure the fourth to ninth delL•ndmts. [he fourth to seventh derendnnts are the firs( children; the eighth und ninth derendants are children el' the first deceased sister and her husband. The third defendant is the first wife; the second dcll:ndnnt is trugtee ol' the Crandchildrcn's trust Wilh the claimant and the first detigndant. 'Chg claimant, the first defendant and •lhe third del'endant are lhe trustees of the Will Trust,
claimant seeks the court's directions in .rcln!ion to v,inding up of the Gnmdchildren's and a discretionar)' tund which is part ot'the Will rust
•.l'here is now much common ground as to how this should be achieved but the trustccs arc still divided as to the division of the discretionnry fund in 'the VCiIl Trust and in particular whcther certain {unds, called thc M Funds, are 10 be included in n dÄisfon of Ibe discretionary nnd to what extent the trustee* should mertide a letter ol' wishes in rcspcct of thosc j•und$ in an attempt to achieve a more cqu il division or lunds between the two branches of the family, In order to understand 011 this it is necessary to look the trust instruments and the history or the titmily so as to undcrstand the differences that have cmerged and why rnncterg have ended up in litigation. As to that I should incntion at the outset that I declined pcnnit 
examination and bnvg proceeded on tbc basis that this iB essentially non-hostile litigation in •.vhich there are differences of perspective, of approach and values 
the trustees, but in adjudicating on this and in deciding the right way (örward it is not necessary io make detailed findings fact. The first defendant's good thith is not in issue in the sensc that no dishonest) is alleged. and the accusations at their highest ure personal hostility in regard to the eighth and ninth defendants and their
In addition to the Will Trust and the Grandchildren's 'l ru«t therc was a discretionary trust "8tablishcd by the first defendant's parcnts on 7 March 200() for the benefit 
the first and third defendants and utl the grandchildren. "hose so'le asset was a property in Gloucestershire Mhich has becn sold, On sale it reatiscd which is now "killed ghe M Fund. 'I herc was a letter of wishes in relation to that trust which reads as
To the trustees of the I discretionary trust.
Overall Aims.
Our basic thinking in creating the discretionary trust is tor tax planning purposes so that wc can make a gift of our house in ICilouccstcrshirel 'tör inheritance tax purposes
.41 
ed t!'ldgment
During Ithe first deiu)dant'sl lifetirne we would like you to hold the house ibr [his] primary use. If 'the house is sold "ithi'l his wc would like you to hold the proceeds for [him) absolulcly.
In the event of Ethe first dell•ndant'sl death, we would like the house to be principally held Ibr the benefit lhisl wite and children."
5, In fact, rur reasons of administratne convenience it was decided to appoint the M Fund to the discretionary fund ot• the Will Trust so that those funds now stond on the term5 of the Will Trust which arc subject to a power of appointment in favour oc discretionary beneficiaries including the Settlot•s v,idow (now deceased), together y,ith the Settlor•s children and later issue, Subject to thnt overriding pouer ot appoinunent, the trust is for the Scttlor'5 widow for lifl.' and thergaticr on discretionary Irtifits ol' income and subject thereto Mith a residuar) gilt by "hich the tund is split as to one third to the first defendant or the third defendant by substitution and thirds to all the grandchildren. There is a letter ol%'hi$hes also in relation to the Will Trust and this reads, so far relevant, as follows:
"4, Provision ti)r Iny children and grandchildren,
! In the of Imy "itu•sl death or of her predeceasing me, Ithe first or [his) qidow and my grandchildren are the main residuary beneficiaries.
1 would like the trustees to give the sum of free or tax the first of my son libe first de lR•ndantl.
Suhiect to this gift I yould like thc residue to be split into three parts so that one third is given to my son [the first defendant] and thirds is gisen to my grandchildren equally per capita.
It' Ithe first dcmclantl predeceases me I would like his share to go in the first Instancc to his second If she too predeceases me I would like his share to accrue tn the grandchildren's shares.
4.5 If any QC my grandchildren predecease me, leaving children, 
I would like those children to take the share their parent "ould have taken.
1 would tikc my trustees to consider using their clause 8 power of' appointment to hold the grandchildren•s share in the most tax efficient administratively convenient way. For example, the trustees may decide to hold thc grandchildren's shares on accumulation and maintenance trust to delay their right to income until 25.
Coordination Between Trustees.
( should like you to liaise closely Mith (he trustees of my grandchildren's settlement to ensurc that the most appropriate ou•rall provision is made for Imy will*', my son and grandchildren."
6, I he letter largely reilec(s the residuary disposition in the will,
rhe Grandchildren'8 Trust is an accumulation and mainlennnge trust with powers ol' ad', ancemcnt for the grandchildren up to the agg of 25 when each grandchild becomes entitled to income but not capilQl from lhe trust fund. The letter's wishes 
relation the trust fund reads as It)llows:
erall Aims,
()ur busie thinking in creating the. Grandchildrcn'$ Trust is to pass the benefit oc our litc assurance policies to our grandchildren.
As tar as pruetieably possible we would like you to treat all our grandchildren equally." 
hrcc ol' the first dctundgnt's children, (that 'is the ft)urth to sixth defendants) huvc each received •their *hates but the seventh defendant and ;thc eighth and ninth deti:nditnts not. In it sgems that lhc eighth and ninth defendants Y,ere not aware of their interest in the Grandchildren's Trust until 2013 •and V,erc not av•qare or their interest in the •Will Trust until February 2017.
As I have indicated ,therc is now a large measurc agremnent in relation to the winding up or the 
Trust and the Will Irrrust discretionar) funds on the basis equality between the six grandchildren, but that has only emerged in thc course of this claim and it is a result to which the first defendant. and it Mould seem also the second And third defendants, have been set against some tirnc •rhe position ol' the second and third detendants is that they huvc •tiled evidence that they support the position taken by the first defendant and one inL•rs that the initiative in this respect was taken by the first defendant. It is clear fronl his correspondence that he wanted to exclude the eighth and ninth defendants in favour ol' his own children in relation to both the Will •rrust and Grandchildren's rust. Yl'he reasons for this appear to be 
etnotional. that involved a desire 'io punish Ihc eighth and ninth deil•ndant in relation to their conduci towards their grandmother. "hile she was alive. •rhe cstrangcnlcnt betwccn the two branches of the tamily goes back to the eighth and ninth detuldant's motherq s tragic early death and the breakdown the relationship mth her husband is of course the father or the eighth and ntnth delendants, It is in my view impossible and unnecessary for present purposes to seek to analyse any of this or to attribute blame for it. Counsel for the first deily•ndant says that thc stance of the first deténdant v,as• based on moral grounds in relation to the eighth and ninth detendants• bchaviour once they had bccomc adult. lhe first has in his view attempted to fulfil what hc pcrccived to bc his latc parents' wishes but in my judgment this may fail to appreciate the difficult conflict of emotional loyaltics that thc eighth and ninth defendants faccd. Morc important in my view are the purposes of thc trusts and the original letters of wishes. The trusts werc established to provide in part for the grandchildren financially and in my vicu to seek to pass over any
i!dEfF.R AB CD lic.2017002797
A roved I
entitlemcnt in the way the first defendant has sought to do in the past was not consistent with his duties as a fiduciary. I was referred to Lei' In an Trust in thc 19t edition at para 29-151 which summarised the duties as ihllows:
l , A dut, to act responsibly and in good faith
2, A duty 10 take only relevant matters into account
A duty to uet impartially. and
A duty nut to act •fior an ulterior purpose:'
10. In view the first defrndanl's previous stance, and by odoption the position or the other trustees aport from the claimant, failed to take into account all relei ant mutters so as to rail in impartiality and to amount to o purpose outside the range of permissible actions. In particular the attempt 10 negotiate a settlement by "ay ol' pa} 
oft in respect to these beneficiaries cannot in my be 'reconciled with thcse principles or with their elaboratiotl in the case law. Bas refi.•rred to re. l/uyes Setli„menl 119821 1 WLR 202 at 209 V.C said this.
"Whereas person who is not in a fiduciary position is free to exercise the power in any •way he '*fishes, unhampered by any fiduciary duties, a trustee 10 whom such a power is given is bound by ihc duties of his office in exercising that poqer to do RO in a responsible manner according to its purpose. It is not enough for him to refrain from acting capriciously ; he must do more. Ite musl "take such a survey the range of objects or possible beneficiaries..." as will enable him to carry out his 
fiduciary duty, Me must find out "(he pennissible area 
selection and consider responsible in individual cases whether a contemplated beneficiary was •within the power and hethcr in relation to other possible claimants a particular ground was appropriate"; in re. Baden No. 1 119711 AC: 424. 449, 457 per Lord Wilberforce."
In these circumstanccs the claimant has been placed in a position where he cannot aeccde to the wishes of the other trustees and retire where he perceives (herc is an intcndcd breach of trust which he would facilitate as this might expose him to a potential claim in that respect: sec I.eii'in on Trust 191b edition para 14-064.
I lc has oftured to retire in favour of a ncw 
trustee but that has not been taken up. Ile obviously qould be content to retire if the court directs him to acccdc •to the other trustees' wishes or if authoriscd by the court but would that his solution as to thc winding up of the trusts and lhc issues v€hich have arisen should be adopted and in imposed on the opposing trustees, Once the way forward has been decided upon then it is obviously neccssat) for the claimant to retire given the circumstances and the Will Trust Will continue in relation to appointments hach wcrc madc on revocablc trusts of two properties in favour of the first and third defendant and his children which are described as released funds. These are properties which were appointed from the Will Trust in 2001 and 2002. I shall retur later to these appointments in relation to an examination of the claignanl's proposals. it is not
•.2017-002797
suggested thal these appointmcnts should bc revoked. but the elaimant argues that (he fact of these appointlnents and the values involved should be taken into account when deciding on further distributions and in particular the appointment of the M Fund.
Before turning to this it is appropriate 10 deal thc question "hether in the cireun)$tancee the court should in quite the Bay the claimant proposes.
4. Chg first. second and third defl•ndonts. who I "ill to us the defending trustees, rely in particular on I,cnvin (op.cit) at paro 29-071 :
Where the allhirs the trust are deadlocked in any particular respect the court has jurisdiction to resolve the deadlock. 'Ihere is no deadlock merely because the trustees iC required to be unanimous cannot agree on the exercise of a power or if the:, 
can act by a mqjoriiy arc evenly divided: powcr in such a case remains unexercised. Where however they have a duty to act but there is more •Ihan one in which it can he fulfilled. such as lhe duly 10 invest 'the trust fund or where thcy have two alternative powers without a duty. such as the power to sell an asset the •power to retain •it. then in the absence or unanimit) or ihe requisite mqiority the court may interfere. Deadlock is a good reason for the trustees to surrendcr their discretion 10 the court but it may bc that even in lhc abscnge of a surtvndgr the 
court can direct deadlocked tru5tees to exercise a power in a 
given way.
Note: 214 to that paragraph refers to Garn/uun v PC 
JRC OSO at paras 83-84 but goes on •s;cd quacre in vic„ the general rule that the court does not dictate to trustees 110B to exercise their powers... there are other ways breaking deadlocks, such as 'the removal of some trustees or the appointment 01' new ones."
1 he decision in the Garnluou case is n decision of the Royul Court of Jersey, *I'he question was whether a disputed debt said to be owed to an estate should bc collected by the executors or assigned to the residual legatee to investigate it and collect it. Thc bailiff of Jersey said Lhis at paragraph 83:
"In thosc circumstances it is the court that must break the 
deadlock bye directing thc executors to follow whichever coursc lhc court thinks is preterable in the interests of the bcneficiarics of the estate. We should add that in this context thc expressions Icgatccs and beneficiaries may be used interchangeably:'
Ile went on at paragraph 87 (3):
•sWc accept that where executors of trustees unanimously exercise their discretion not to exercisc a permissivc power the court cannot interfere savc on the very limited grounds
described earlier, But lhnt is not what ht18 occurred here, "the executors have not decided not. to exercise their power. they 
di g, ided and have reached no decision."
He held further that the lack ol' unanimity did not amount, to a decision that the po"vr should not be excrciscd and that the court in the exercise of' its supen isory jurisdiction in the best interests ot•the beneficiaries should interfere so as to override a dissenting trustee,
18, The. claimant also relies particularly on Klug v Klug \ 1 0 18'1 2 Ch,67 where the COUN "as agked to intervene as trustees did not agree to the exercise a power of advancement to enable the testator's daughter to pay legacy tax on het inheritance, because the testator's widow had taken against het daughter's husband whom she had married without approval. The court held that where trustees have honestly exercised 'their discretion a court Vi'il) only interfere in special citrutnstances but the widovCs reasons meanl she had nol exercised her discretion at ail. It should be noted that in both thesc cases ihc court was asked to approve a particular step rather than to exercisc u discretion itself.
In contra8t to the earlier parugruph in Lewin nt 29-71 and these two coseq, arc paragraphs 29• 128 and 29-129 in Lewin which read as follows:
"If the trustees rail in Ibeir duty by simply not considering an exercise ol' the power at all and so leave it unexctcised the court enn direct them to do so. That will be thc u$ual remedy uhere there is no reason to that the trustees give consideration i? ordered to do so. for instance *there tbc failure is a result, soy, of a misapprehension. Where the trustees' dcl'auJt is more serious, insumce, where there is a deliberate und conscious failure to consider an exercisable power and the court is unable to discern any genuine repentance on the part 
the trustees, the Court may order the more draconian remedy of a removal of the trustees under the court's inherent j :diction and the appointment new trustees in their place. It has been suggested that tcmovat Oit trustees is, apart fronl an order to consider an exercise of the power, the only remedy-available the court and the court cannot itself intervene in ihc exercise a power unless the discretion has been surrendered to the court 
But that overlooks older authorities in which the court has intervened in the cxereisc or merc powers to which attention has more recently been drawn. and it appears that otbor remedies Inay be available to the court as where the cou:.t exercises a trust power, instancc the appoin(mcnt of a substitutc to consider an exercise of a power or an order actually cxcrcising a power arter the court has itsclt•considcrcd what should be done. Even so the traditional remedies are adequate to coyer most cases and we consider that the court would in the absencc of exceptional circumstances bc vcry reluctant to excrcise a powcr which had not bccn considered properly by thc trustccs, particularly whcrc the duty ol' consideration was a continuing one so that the procedure uould be costly and cumbersome."
29-129 The court will not take the exercisc ol' il discretionary 
out of the hands trustees arc willing to exercise 
properly. The general principle of non-intervention is diseusscd
he discretion in (his casc has not been surrendered to the court. is lilir to sa) that the first defi.•ndant's repentance in regard to his express position against the eighth and ninth appears somewhat reluctant. So far as necessary the claimant also relies spgcinl circumstances which require thc court to grasp the ncttle. Everyone is agreed that thc trust should be uound up as tar as possible and division is agreed in principle. The failure to surrcndcr discretion is perhaps a Caclor 10 be taken, into account, In that connection I was referrcd to Public Trustees v ("onper 
In relation to a third category ol' cages identified by I lart J in that case he said this:
The third category is that at' surrender of discretion properly so called. Thc court will only accept a surrender of 
discretion for a good reason. the most obvious good reasons 
being cither that the trustees are deadlocked (but honestly deadlocked so that the question cannot be resched by removing onc trustee rather than another) or because the trustees arc disabled as a result of a contlict ol' interest:'
llart J went on to refer to the fact that adversarial argument might occur or some solution might emerge by agrcctnent or submission in lhis category of case.
21, 'Che defending trustees have now staled that as a last resort thC) it',ould surrender discretion but onl, *'if the court would in principle accept one and "vuld otherwise 
wiSh to remove ihe trustees or adopt the claimant's proposar
The trustees submit that they should bc directed to decide on such guidancc as the court 'thinks appropriate since it is not argued that they be rcmmed and they 
have now shown a better appreciation or their duties, In thesc circumstances thg> 
submit 'the appropriate course is to direct them to makc a decision on the basis of the appropriate considerations. by way as il were, of a lörm of judicial review as appears to be suggested in the paragraphs from Lewin which I have just quoted.
Before teaching a conclusion, I turn next to the substance what thc claimant proposes. •1his appears in his third witness statement at para 9 as f0110"s:
In order to understand what is at stake •fir the beneficiurn:s it is helpful to set out. for illustrative purposes, what tho result would be of a division based on: (a) the Will Trust's assets at 
the time of (the Settlor•sl death (applying the above percentage): (b) the Will Trust's assets as at today's value (applying the above percentagcs); (c) [the first 
proposal sct out in KuiCs letter of 27 Junc 2017 [hisl most
recent proposal set vul in this witness statement): and (e) my 
n conclusion as to what the appropriate split should be:
On the basis ofthe net value of assets (as stated in the accounts) as al •the date o? tthe Settlor's) death - El ,800.303 • thc division would be: (i) 
(for (the first defendantl and his 
ihmily); and (ii) 1396.067 (Ibr Ithc eighth and tunth defendants l).
It' the current Mllue of the assets is applied, but nol taking into account the M Vund. the dÄision (at least in terms gross value) Mould be in the order of: (i) (Cur [thc first defendantl and hi* famil.y); and (ii) [the eighth and ninth defendants)). This is based on a (consen ntiw) Mllue of {3.5 million IOr Ithe properties) and liquid runds or
(this from the 'figures set out at paragraph 20 of [the first 
Bitness slatementl i c. less in respect of the M Fund). the M Fund Bere included, the 
would bet (i) Ithe first detendantl and his ramjl)); and (ii) {943.000 (tor {the eighth and ninth dc ll•ndunts).
[The first defendant's proposal (contained in Kuit's letter ol' 27 June Nas premised upon the Pund treated as bcing available rot distribution being limited to On that basis, the division would be; (i) tthc first and his .fumily) (depending on whether 'the assets are valued ut death and on whether the M Fund is included); and (ii) 180,000 (tur [the eighth and ninth dcfendants).
IThe first defendant's most recent proposal (paragraph 84 oc lhi$ witness statementl) is premised upon the fund treated as being availab)c for distribution heing limited to E490,000. On that basis the division would be: (i)
(the first and his family) (depending on whether the assets are valued at death and on whether the M Fund is included); and (ii) 1107.800 (for (the cighth and ninth defendantsl).
My own conclusion is that thc valuc of the M Fund (represented by liquid capital) should bc includcd within the fund available for distribution. On that basis thc division be; (i) El 
(for [the first defendant) and his family) (depending on whether the assets are valued at death and on whcthcr the M Fund is included): and (ii) El 73,000 (for (the eighth and ninth defendants)).
•this is opposed by the defending trustees and in particular reliance is placed on the Ictter of wishes in respect of the particular trust Cund from which the M tunds come
and the ihct ol' the appointment ol' thcsc tunds for administrative cotnenience only to the SVill I ru«t.
According to the first detundant one of the bropertics was in fact purchased jointly in the 
iVi(h his father and was always intended for the first ectendant•s benefit, although no documentation has been produced to substantiate his outright ownership of the property. Similarly, the first says that the other property was deliberately appointed to his side of the family to the exclusion ihc cightb and ninth derendants, As a result •it was always the case thal there te be differential treatment, although lhe disparity and the need for the trustees to consider adequatc Ldlocation to the eighth and ninth dgmdant$ pointed out at the time by legal advisers and the suggestion that this may have been in some motivated by a protZssional negligence claim against that firm on lhc part of' (he first defl•ndant secms to rne unworth)
Looking at matters disintcrcstcdl> and dispassionately the claimbnt has, in my view. the better of the argument, that is to that thg disparity in treatment calls lor adiustment so as to moyc closer 10 thc original letter of wishes and that therefore some account needs to be taken of the availability orthe Nt Fund.
I la', ing said that, it seems to -me that .it is wrong in principlc to impose the claimant's solution and there may be a range of possible solutions apart from the claimant $ 
propusal. In Ibe first instance it seems to me therefore that the way f0Nard is for me 
(0 direct the trustees to reconsider matters with a view to reaching a decision b)' way of compromise between them and if they arc unable to do so then the court should in my view require thal it makes a decision for the trustees after hearing argument directed specifically to that purpose. In my view this approach best mect5 the requirements of thc authorities which I have quoted and are summarised in Len in at para 29-128, am conscious, as Hill the trustees be. that futihcr hearings "ill inoivc cxlru costs and therefore an accommodation between the divergent views would be beneficial on that scorc alone
In order to deal with handing down this judgment and consequential matters, clerks to counsel should attend before Inc on a pre-booked application without notice at 2pm when t am availublc. It 'nay be uppropriute fi»r there to be a delay following receipt of this judgment in draft so that the trustees can reconvene in thc light of the views which I have expreysed bctorc any further hearing. so that any further hearing can proceed. if needs be. in the I have decided in the absence of agreement bet"een the trustees.
