Andrew Frank Pitman Hubbard & Anor v Robert William Pitman Hubbard & Anor

Objections made in the course of taking a common trust account are not statements of case. The court therefore has no direct jurisdiction under CPR rule 3.4(2) to strike them out. Nor does CPR Part 24 ordinarily permit summary judgment once the substantive claim has been resolved and only consequential accounting relief remains.

The detail required by paragraph 3.2 of Practice Direction 40A depends on the nature of the objection. An objector need identify the objection and its grounds, and quantify an alleged understatement of income where able to do so. The court should assess the objections as a whole and use case-management sanctions cautiously. Limitation and abuse issues generally require fact-sensitive determination. An application seeking wholesale summary disposal of the objections was dismissed.

The claimants, beneficiaries of an express trust concerning development land, sought an account from the defendant trustees. Earlier admissions and orders had resolved the claim to an interest in the land and left the proceedings to continue by taking an account of the trustees’ conduct and the claimants’ entitlement to payment.

Following directions, the claimants served a Scott Schedule containing 65 objections to the trustees’ account. The first defendant applied to strike out the claimants’ objections under CPR rule 3.4(2), or alternatively for summary judgment under CPR rule 24.3. He also alleged that the proceedings were time-barred and abusive. The central issues were whether those procedural powers applied to objections on an account, whether the objections complied with paragraph 3.2 of Practice Direction 40A, and whether limitation or abuse could be determined summarily.

1. Application dismissed. The court’s powers did not include the powers sought under CPR rule 3.4(2) or Part 24 in relation to these objections. The claim itself had been resolved by declaration, and the remaining proceedings concerned consequential accounting relief rather than a claim or particular issue amenable to summary judgment.
2. Objections on the taking of an account are governed by paragraph 3 of Practice Direction 40A. They should not be equated with statements of case. Paragraph 3.2 is qualified by the words “as far as able to do so”, and its requirements vary according to the subject matter. An objection concerning expenditure need not quantify an alleged understatement of income. The objection and its grounds must be sufficiently clear to enable the accounting party to understand the case and prepare evidence.
3. The court may manage the process through its general case-management powers and sanctions for non-compliance. Such sanctions should be used sparingly. The high threshold applicable to strike-out applications, and the opportunity to cure defects where appropriate, provided useful guidance. A wholesale review of 65 objections on an interim application was inappropriate, particularly where the objections, read with the replies, were coherent and raised matters requiring evidence at the account hearing.
4. Limitation could potentially be determined summarily in a clear case involving no disputed facts. However, section 21 of the Limitation Act removes limitation for an action by a beneficiary to recover trust property or its proceeds in the trustee’s possession, or previously received and converted to the trustee’s use. Whether that provision applied, and whether concealment was relevant, required specific facts. The limitation points were therefore unsuitable for summary determination.
5. The court retained an inherent jurisdiction to strike out an account conducted abusively, but the threshold was high. Personal animosity or an ulterior motive did not itself establish abuse. The evidence did not show oppressive conduct in the proceedings. The application was dismissed.

This was a first-instance application in continuing trust-account proceedings. Earlier orders had directed the taking of an account, but no judgment under appeal was identified.