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TRUST - When the trustees of a family trust refuse to answer the beneficiaries' questions

The latest edition of Kingsley Napley's Contentious Trusts And Probate Monthly Round-Up covers the recent cases of Lewis v Tamplin, in which the trustees of a family trust refused to answer the beneficiaries' questions; English v Keats, regarding remedy of the defective execution of a deed of appointment; Nield-Moir v Freeman, where a woman claiming part of an intestate's estate was told to undergo DNA paternity testing; Habberfield v Habberfield, a farming proprietary estoppel claim; ET v JP regarding variation of a trust for the benefit of a minor; Brindley v Brindley regarding undue influence in a lifetime gift; North v Wilkinson concerning an alleged trust in favour of investors in a business venture carried on by a sole trader; Thompson v Raggett, a reasonable provision claim; and Mussell v Patience on an executor's duty to justify estate funds spent on legal costs.

Lewis v Tamplin & Ors [2018]

The High Court has criticised the trustees of a family trust settled by Gladys Tamplin for the benefit of her six children and their issue for refusing to provide certain information about the trust to the beneficiaries.

Mr Justice Matthews said “the defendants have taken an extreme and in my judgment indefensible approach to disclosure in this case, first by denying (on a very weak basis) that the claimants were beneficiaries at all, and then by putting forward a series of hopeless arguments against giving information to the beneficiaries”.

The Claimants, three of Ms Tamplin’s grandchildren, had sought various documents including full trust accounts dating from the inception of the trust, copies of tax advice received by the trustees in relation to the trust, information and documents relating to the basis on which distributions had been made to some of the beneficiaries, but not all, copies of professional advice and information about conditional fee agreements entered into by the trustees related to the professional advice.

Mr Justice Matthews authorised disclosure of the large majority of documents requested. In doing so, he made clear that advice sought for the benefit of the trust as a whole, and paid for out of trust funds, is liable to be ordered to be produced to the beneficiaries even though it may be privileged as against third parties.

Determination in a complaint by Mrs T, 16 March 2018 (PO-15526)

The Pensions Ombudsman has upheld a complaint by a member’s spouse, where the pension scheme administrator paid a member’s death benefits to another relative without first obtaining appropriate relevant evidence before deciding how to distribute to plan benefits. The pension scheme administrator had not made any enquiries of the member’s spouse despite the fact she was the deceased’s wife and the nominated beneficiary prior to a change of nomination in November 2013. The Pensions Ombudsman directed that within 21 days of the date of the determination, the pension scheme administrator should reconsider its decision.

English & Ors v Keats & Ors [2018]

The High Court has confirmed that it will use its equitable jurisdiction to remedy the defective execution of a deed of appointment.

The case concerned six deeds of appointment created for tax planning reasons in relation to three family trusts settled by husband and wife, Alan and June Thunder. Each deed was prepared and signed on 8 March 1999 but omitted to identify one of the four trustees for each of the relevant settlements and provide a signature for that trustee. The missing trustee in each case was either of Alan or June. The error was subsequently spotted but by which time June had died and the position could not be rectified.

The doctrine for remedying the defective execution of a power dates back to the case of Tollet v Tollet (1728) where a distinction was drawn between defective execution and non-execution. In this case Mr Judge Hacon determined that “All four trustees intended to exercise a power they were entitled to exercise to amend the Settlements. All four purported to do so by the signatures of three of them. That, in my view, qualified as an attempted exercise by the trustees of their power. The failure of June Thunder to sign rendered the trustees' attempt defective” (rather than a complete failure to execute).

Nield-Moir v Freeman [2018]

The High Court has directed that a woman undergo DNA testing to establish whether or not she is the biological daughter of the deceased, Colin Birtles, and consequently entitled to a share of his estate (passing by intestacy).

Mr Justice Matthews determined that “justice” of the case required that the DNA evidence be made available to the court and that the woman should not be allowed to obstruct that. On this basis, he found that the court should exercise its inherent jurisdiction to direct the giving and testing of a saliva sample, with the court being able to draw an adverse inference if the woman did not consent to give the sample.

Habberfield v Habberfield [2018]

The High Court has determined a proprietary estoppel claim in favour of the daughter of a farmer, Lucy Habberfield, who had devoted her working life to her parents’ farm in the expectation of one day inheriting it. Mr Justice Birss determined that Lucy had relied on assurances that she would eventually take over the farm to her detriment.

Taking into account the value of the farm as well the benefits already received by Lucy (including by way of salary), Mr Justice Birss concluded that she should be awarded a case payment of approximately £1,170,000 (nearly half the net value of the farm).


ET v JP & Others [2018]

The High Court was recently asked to consider the operation of section 1(3) Variation of Trusts Act 1958. Mr Justice Morgan determined that the question as to whether the variation of a trust was for the benefit of a minor who was a beneficiary and lacked capacity for the purposes of the Mental Capacity Act 2005 was a matter for the High Court and did not have to be referred to the Court of Protection.


In Re the Estate of Shirley Brindley (Deceased) sub nom Alan James Brindley v Gordon Leslie Brindley [2018]

The High Court was asked to consider whether a lifetime gift of property by a mother to one of her two sons should be set aside on the ground of undue influence.

After the death of her husband, Shirley Brindley had been living with one of her sons but subsequently moved in with her second son and his wife before the three of them decided that they would all live together at Shirley’s home in Cornwall. The second son subsequently made contact with a solicitor informing them of his mother’s intention to transfer a share in her home to him. Following an exchange of correspondence, the solicitor then met with Shirley alone and explained to her the various options available to her in transferring the property whether by joint tenancy or tenants in common and the differing consequences of doing so. The solicitor alerted Shirley to the fact that if the transfer were to go ahead her Will would need to be amended if she were to ensure equality between her two sons (as per her current wishes). Shirley went ahead and her second son became a beneficial joint tenant in the property however Shirley subsequently fell out with her other son and her Will was never amended.

Mr Justice Klein was satisfied that the relationship between Shirley and her second son was on of trust and confidence and that the transfer itself was one that called for an explanation, such that a presumption of undue influence arose. However, Mr Justice Klein found that presumption to be rebutted by the evidence of the solicitor having properly and independently advised Shirley of the nature and effect of the proposed transfer, and that she had understood that advice.

(1) Steven John North (2) Peter North v Geoffrey John Wilkinson & Others [2018]

The Court of Appeal has reversed a High Court decision that had found that Mr North, an inventor, had created a trust in favour investors in a business venture carried on by him as a sole trader. The Court of Appeal found that there was no evidence of a clear declaration of trust. The case serves as an important reminder of the importance of the three certainties – intention, subject matter and object – in demonstrating the existence of a trust. 

Thompson v Raggett [2018]

The High Court has granted the outright transfer of a property and a lump sum for renovating and moving into the property as well as a lump sum for future maintenance to the partner of the deceased despite his will making no provision for her.

Ms Thompson had lived with her partner Mr Hodge for approximately 42 years prior to his death. A letter of wishes recorded that Mr Hodge did not want Ms Thompson to inherit under his will (because he considered that she had sufficient means to provide for herself and he was no longer in contact with her children). Ms Thompson made an application pursuant to the Inheritance (Provision for Family and Dependants) Act 1975.

The decision departs from the observation of Lord Hughes in the Supreme Court case of Illot v Mitson [2017] that “If housing is provided by way of maintenance, it is likely more often to be provided by such a life interest rather than by a capital sum”.

(1) Anita Doreen Mussell (2) David Keith Williams v (1) Christopher Edward Keith Patience (2) Veronica Lesley Patience [2018]

The High Court has considered what information is required to evidence an entry in an executor’s account of the administration of an estate after an objection by the beneficiaries to legal fees incurred by the executors.  Mr Justice Matthews determined that "the information required to be provided by way of "voucher" to support an entry in the executor's account need not exceed the basic information contained in the solicitors' invoice, that the charges are professional charges to the executor, as executor, in relation to the administration of a particular estate…… This is about showing only that the executors have spent the estate's money on proper estate business.”


Ultima Modifica: 11/05/2018