Barclay & Ors v Smith & Anor

The court may appoint trustees under its inherent jurisdiction even where no formal administration claim is made. Alternatively, section 41 of the Trustee Act 1925 permits appointment where it is expedient to appoint trustees and doing so without the court’s assistance is inexpedient, difficult or impracticable. Former trustees may remain legal owners of trust property after their offices have ended. They continue to owe fiduciary duties and may take reasonable steps to preserve the trust estate, but generally cannot exercise powers conferred by the trust deed or rely on its protections.

The claimants sought their appointment, or confirmation, as trustees of the Spen Cama Cricket Foundation. The trust deed appointed trustees for five-year terms, but the terms of most or all of the trustees had expired without formal reappointment. One original trustee did not wish to continue, while the defendants supported the claim. The Foundation’s affairs were in good order, and the claimants sought certainty because property investments were being acquired. The central issues were whether the court had jurisdiction to appoint trustees and whether the claimants were suitable for reappointment.

1. The court appointed the six claimants as trustees for a further five-year term from 7 January 2016, in substitution for themselves and the second defendant. The appointment was made under the court’s inherent jurisdiction.
2. The inherent jurisdiction to appoint trustees is available in an administration action. A formal claim for administration is unnecessary. CPR rule 64.2(a) and Practice Direction A to CPR Part 64 recognise claims for relief which could be granted in an administration action, including an order directing an act to be done under the court’s supervision.
3. The court also had power under section 41(1) of the Trustee Act 1925. If reliance on that provision had been necessary, the circumstances would have made appointment without the court’s assistance both inexpedient and impracticable.
4. Expiration or removal from office did not itself divest the former trustees of ownership of trust assets. The personal property remained vested in all the claimants and the second defendant, while only four of them remained legal owners of the real property. Section 40 of the Trustee Act 1925 did not apply on these facts.
5. As continuing legal owners, the former trustees remained trustees in an important sense. They owed fiduciary duties and duties to account, retained general-law rights such as recoupment of properly incurred expenses under section 31 of the Trustee Act 2000, and could take reasonable steps to preserve the trust estate. Subject to the deed, they generally could not exercise its trustee powers or rely on its protections.
6. No vesting order was required because the continuing and retiring trustees would arrange vesting between themselves. A representation order was also unnecessary.