James Martin Kekwick v Christopher Alan Kekwick & Anor.

An action by a beneficiary for limitation purposes must be brought in respect of the relevant breach of trust. A claim seeking directions, an account brought by trustees, or objections made during account-taking will not suffice unless the beneficiary has invoked the court’s jurisdiction in respect of the breach. An amendment cannot be used to deprive a defendant of an arguable limitation defence. Trustees must establish the identity and address of a person claiming trust property before distributing it. That duty qualifies the duty to distribute. Clear professional advice may provide a defence where lay trustees conscientiously act within its scope. A costs assessment should not be ordered where it would be disproportionate and materially unproductive.

The claimant was the sole beneficiary of a trust holding the proceeds of sale of the family home. The defendants, appointed trustees, had retained the fund after the claimant’s mother’s death. The claimant brought Part 8 proceedings seeking directions, an interim payment, disclosure and related relief. The trustees counterclaimed for an account.

Five preliminary issues were ordered: limitation; assessment of the trustees’ legal costs; the effect of a letter and legal opinion on the duty to invest; breach of the duty to distribute; and alleged failures concerning the former family home. The claimant accepted that some claims were time-barred but sought to preserve his position and to amend the claim form. The central questions were whether procedural steps had stopped time running and whether the trustees were justified in retaining and not investing the trust fund.

1. Limitation. Under section 21(3) of the Limitation Act 1980, the six-year period runs from accrual of the breach of trust. The original claim, which sought directions and disclosure, was not an action in respect of breach of trust. The trustees’ counterclaim for an account was neither brought by the beneficiary nor itself concerned with breach of trust. The order requiring objections to the account, the Written Notices and the Notice of Objections did not invoke the court’s jurisdiction by a proceeding in respect of breach of trust. Time therefore continued to run.
2. The application to amend was refused. Section 35(1) of the Limitation Act 1980 would treat the new claims as commenced with the original claim and would deprive the trustees of an arguable limitation defence.
3. The claimant’s legal-cost objections were not referred for assessment. The claimant had not particularised his objections despite directions, and assessment would be costly, disproportionate and largely unproductive.
4. The Non-Action Letter did not prevent the trustees from fulfilling their duties; it required prior approval. Paragraph 14 of the 2011 Opinion, however, clearly advised that the trustees should not invest in assets that might fall in value. The trustees had followed that advice by retaining the fund in an interest-bearing account and accounting for the interest. That advice provided a defence to the investment allegation. The separate concurrence argument failed.
5. The trustees had a strict duty to establish beyond doubt the identity and address of the beneficiary before distributing trust assets. The claimant repeatedly failed to provide the requested information. The duty to distribute therefore had not arisen, and the trustees were not in breach. The court did not need to determine the alternative defence based on retaining funds for contingent liabilities.
6. The claimant’s acceptance that the claims concerning maintenance and sale of the property were time-barred was irrevocable. The preliminary findings were recorded accordingly, with further directions and costs issues reserved.

First-instance determination of preliminary issues in High Court proceedings. The judgment records that the claimant intended to appeal, but no appeal had yet been brought or permission application made.