The Honourable William Francis Seymour, Earl Of Yarmouth v Ragley Trust Company Limited & Ors

Trustees are removed only where removal is required for the welfare of the beneficiaries as a whole or is necessary to protect the trust or its proper administration. Misconduct may justify removal, but not every breach, mistake or neglect does so. A breakdown in relations, friction, hostility or a beneficiary’s loss of trust and confidence is relevant only where it obstructs, or is likely to obstruct, the proper execution of the trusts. The court must assess the future safety of the trust property and the welfare of all beneficiaries, rather than the subjective grievance of one beneficiary. Trustees may have regard to the nature and purpose of the settled property, the settlor’s wishes and the circumstances of the trust. There is no general statutory duty to diversify investments, although trustees must review the investment position and consider diversification so far as appropriate.

The claimant sought the removal of two corporate trustees of three family settlements and their replacement by an independent professional trustee. He alleged misconduct, failures to account, defective appointments, excessive focus on preserving a landed estate, inadequate investment returns, dependence on the settlor and his wife, and an irretrievable breakdown in trust and confidence.

The defendants denied wrongdoing. They maintained that the trusts were properly administered as predominantly agricultural and landed assets, that the trustees acted independently, and that the claimant’s difficulties arose principally from a family dispute and separate land-access issues. The claim was brought under the Part 8 procedure. The central issue was whether the welfare of the beneficiaries as a whole, or the protection and proper administration of the trusts, required replacement of the trustees.

1. Claim dismissed. The court applied the established principle that the welfare of the beneficiaries is the main guide on an application to remove trustees. Removal may occur without proved misconduct, but only where the trustees’ continuance would prevent the trusts being properly executed or would endanger the trust property or beneficiaries’ welfare.
2. Friction, hostility and loss of confidence between a beneficiary and trustees are relevant but do not themselves justify removal. The claimant’s subjective belief that the trustees were aligned with his parents did not establish that the trusts were endangered or that the trustees could not continue to act professionally. The evidence showed that the trustees were willing and able to do so.
3. The trustees were entitled to have regard to the nature of the property settled, the settlor’s wishes that the estate be preserved as a family home, and the wishes of the other beneficiaries. The fact that the claimant was no longer expected to inherit the estate did not make those wishes irrelevant.
4. The statutory investment criteria required review of the investments and consideration of diversification so far as appropriate to the circumstances of the trusts. They did not impose an absolute duty to diversify. The relevant instruments also excluded or modified diversification obligations. The trustees had considered diversification and had a rational strategy supported by professional advice.
5. The allegations concerning access to the claimant’s separately owned woodland, historic distributions, accounting, the invalid 2009 deeds and the 2023 deeds did not establish conduct requiring removal. The trustees had rectified the consequences of the invalid deeds and accounted for the income due. The court also accepted that income arising during minority could be paid to a parent or guardian on the beneficiary’s behalf.
6. The court did not need to determine whether it had jurisdiction to remove directors of corporate trustees while leaving the companies in office as trustees. No order for removal or replacement was made.

First-instance decision. No appellate history is stated in the judgment.