Gavin Littaur v Alistair Collett & Ors

Trustees must be ready to account for trust assets, but the duty does not necessarily require formal annual financial statements. The appropriate form and extent of accounting depend on what beneficiaries reasonably need to understand, verify and, if necessary, vindicate their rights. Trustees are not required to answer never-ending or disproportionate inquiries. Where trustees have repeatedly supplied sufficient information about the trust assets, dealings, distributions and current position, an order for an account or inquiry is unnecessary. A beneficiary’s disagreement with transactions does not itself justify such relief.

The claimant, a remainderman under the Littaur Marriage Settlement 1948, sought an account of the trust’s rents, profits, investments and dealings, together with an inquiry into the trust property and the sale of 84 Wildwood Road to a connected party. The trustees relied on extensive information supplied over many years and contended that the claim duplicated information already provided.

The court also considered the capacity of the claimant’s sister, the absence of cross-examination in the Part 8 procedure, the management of the hearing, and costs.

1. Account and inquiry. The claim for an account and inquiry was dismissed. The court accepted the approach in RNLI & Ors v Headley and McCole [2016] EWHC 1948 (ChD): accounting concerns the trustees’ readiness to account for what they have done with trust assets, and may be achieved through formal accounts, less formal documents, or other information. What must be provided depends on the circumstances.
2. The trustees had repeatedly supplied sufficient information about the trust assets, their dispositions, distributions, investment holdings, valuations and current position. That information met, and in some respects exceeded, the legal duty to account. The claimant’s dissatisfaction with particular transactions did not justify an account or inquiry. Any substantive claim for breach of trust, negligence or breach of professional duty was outside the relief claimed and inappropriate for determination in these Part 8 proceedings.
3. The court accepted the submission, supported by Gray v Guardian Trust Australia [2003] NSWSC 704, that trustees need not answer lengthy and voluminous inquiries beyond what is reasonable.
4. Capacity was presumed under the Mental Capacity Act 2005. The evidence did not displace that presumption. The court therefore proceeded without ordering a further capacity assessment or appointing a litigation friend.
5. Cross-examination was refused. Part 8 proceedings are generally suitable where there is no substantial factual dispute, and the decision accorded with the overriding objective and proportionate use of court resources.
6. The claimant was ordered to pay the first and second defendants’ costs. Dr Fox was added for costs purposes under section 51 of the Senior Courts Act and CPR 46(2), and the claimant was ordered to pay her costs, subject to detailed assessment.