Enus Ali & Anor v Muhammad Modu Miah & Anor

Section 36 of the Trustee Act 1925 may operate alongside provisions in a trust instrument dealing with the appointment, removal and replacement of trustees. Those provisions oust the statutory power only where, on a fair reading of the instrument, exercising the statutory power would be inconsistent with its purport.

“Unfit to act” is an ordinary English expression assessed in the specific context of the relevant trust. It may include conduct which is contrary to the trust’s interests, including knowingly advancing evidence that could lead to proceedings brought to protect the trust’s interests being struck out. An appellate court should be slow to interfere with an evaluative conclusion of unfitness where that conclusion was available to the first-instance judge.

The appeal concerned the trustees of a charitable trust involved in proceedings about ownership of a mosque. After an earlier hearing found that Mr Miah, Mr Ali and Mr Wahid were trustees, Mr Miah purported to remove Mr Ali and Mr Wahid and appoint Mr Rahman and Mr Hussain in their place.

In case-management proceedings, HHJ Johns KC concluded that the replacements should be substituted as claimants in the County Court Proceedings. He held that Mr Miah had validly exercised the power in section 36 of the Trustee Act 1925 because the appellants were unfit to act as trustees. The appeal raised whether the trust instruments had ousted section 36 and whether the finding of unfitness was available to the judge.

1. Appeal dismissed. The order substituting Mr Rahman and Mr Hussain as claimants was upheld.

2. Section 69(2) of the Trustee Act 1925 provides that the statutory powers are additional to those conferred by the trust instrument, subject to any contrary intention. The mere existence of detailed provisions concerning trustee appointment, termination and vacancies did not demonstrate such an intention.

3. The relevant question was whether, on a fair reading of the trust instruments, it would be inconsistent with their purport for continuing trustees to exercise the replacement power in section 36(1). The provisions stating that first trustees would remain in office until retirement did not entrench their position, since the instruments also provided for automatic removal on specified events. Nor did meeting and voting provisions prevent replacement by writing under section 36.

4. “Unfitness” under section 36 was an ordinary English expression, assessed in the particular context of acting as trustee of the Trust. It did not amount to a finding of general immorality or dishonesty. The first-instance judge was entitled to regard the appellants’ conduct as unfitness because they advanced an account which had been found untrue and which, if accepted, could have led to the Trust’s proceedings being struck out.

5. The appellate question was whether the evaluative conclusion was available to the judge, not whether the appellate court would have reached the same conclusion. The judge was entitled to consider Mr Ali’s oral evidence and Mr Wahid’s failure to disavow or explain his supporting witness statement.

• Chancery Appeals (ChD): The appeal against the order of HHJ Johns KC dated 14 June 2023 was dismissed.