James & anr v Louisewilliams & ors [2015] EWHC 1166 (Ch)

WTLR Issue: December 2015 #155

In the matter of: THE ESTATE OF THOMAS EDWARD WEETMAN DECEASED

JOHN ARTHUR WILLIAM JAMES

STEPHEN NEIL MOUNTFORD

V

KATHLEEN LOUISEWILLIAMS

ELAINE CRISP FORMERLY BEESTON

EDWARD WILLIAMS

PATRICK WILLIAMS (children by their litigation friend W Dangerfield)

GEORGE WEETMAN-BEESTON

SALLY-ANN WEETMAN-BEESTON

FRANCESCA WEETMAN-BEESTON

RICHARD HARVEY

THOMAS CHEADLE

SANDRA TYSON

ANDREW BAILEY

DAVID VERNON

Analysis

Thomas Edward Weetman (the deceased) died on 3 November 2008. His last will was executed on 19 September 2008 (the will). The principal assets in his estate (the estate) were shares in his company Weetman (Haulage & Storage) Ltd (the company) which he had successfully built up during his lifetime, and shares in a property known as Pasturefields Enterprise Park (the property) which the deceased owned but which was occupied, in whole or in part, by the company. The estate was of considerable value but illiquid. The will provided that fifty percent of the deceased’s shares in the company should go to employees as long as they were working for the company at the date of his death. In the event that the employees did not work for the company at the date of death the gift of their shares did not take effect and were instead distributed amongst the grandchildren. The remaining fifty percent of his shares were left amongst family members on the trusts set out in the will (the will trusts), 20% for them absolutely, 20% on trust for his daughter and two grandsons who were minors. The remaining 10% were to be held upon trust for Elaine Beeston for life and then to her children in shares.

The executors named under the will were the deceased’s sister, Dorothy Helen Cottrill (Ms Cottrill), his solicitor John Arthur William James (Mr James) and his accountant Stephen Neil Mountford (Mr Mountford). Ms Cottrill renounced probate. The executors were also appointed trustees of the will trusts. Initial unease was expressed by Mr James as to the position of Mr Mountford, which appears to have been shared by family members, because Mr Mountford had, according to Mr James, acted as a de facto director of the company and it was foreseeable that conflict might arise between the interests of the company and the interests of family members not involved, as such, in the day-to-day running of the company.

Tensions arose between the family members and the employees of the company. There was concern amongst those working for the company that one or more of the ex-employees might take sides with the family members and wreak some form of havoc within the company by removing directors or otherwise affecting the company’s wellbeing. This had not happened, but there had been tension, following the death of the deceased, in the administration of the estate, affecting relations between family and employee beneficiaries. The family members including the litigation friend of the two minor children, made an application for the claimants, Mr James and Mr Mountford, to stand down as trustees.

Held:

  1. 1) The family were entitled to voice concerns in relation to the position of Mr Mountford and Mr James as the trustees of the will trust. Looking at the matter objectively, a well-informed observer would see Mr Mountford’s position as impossible or, at least, seriously compromised, in the event of a conflict of interest arising between the interests of those in day-to-day control of the company and the family beneficiaries. That affected Mr James also, as he had joined in taking out a grant with Mr Mountford, overcoming his earlier disquiet. In one sense, that conflict was the deceased’s choice, but he did not choose these two alone as executors or trustees of the will trust. He envisaged them acting with his sister as co-executor and co-trustee, which would not now happen, as she was unwilling to act, and has renounced probate;
  2. 2) A mere loss of confidence in a set of trustees was not of itself enough, but loss of confidence could in turn lead to avoidable conflict and dispute, and therefore to expense which was, of necessity, detrimental to the trust estate.
  3. 3) Their role as trustees would necessitate regular contact with the directors and employees of the company. Family members would obviously wish the will trustees to maximise the return from the investment in the company. Against that, the company would or might need to deploy its finite resources for other business purposes and the proper reward of its workforce. There thus remained (a potential for conflict between the interests of the directors and employees of the company and the interests of the family beneficiaries which Mr Mountford, as someone perceived to have acted as a de facto director, was not ideally suited to deal with as trustee of the will trusts. Given further that Mr James had now joined forces with Mr Mountford in the sense of taking out a joint grant with him, those two would be seen objectively, not just by the family, as being more inclined to the company’s camp than the family’s.
  4. 4) There was a strong case here for further trustees to be appointed in place of Mr James and Mr Mountford. The suggestion that the sisters should be the majority trustees with their solicitor was one which had a great deal of attraction from the perspective of the proper administration of the will trusts. The engagement of professional people of different albeit complementary disciplines came at a cost. Modern reality required the court to take into account the risk of increasing costs when considering issues of administration.
  5. 5) Trusts were better administered in an atmosphere of harmony, not disharmony. The better chance of harmony in this case was achieved by appointing the family members, with the probate solicitor of their choice, as trustees rather than anyone else. That was also likely to be significantly cheaper that the appointment of two professionals of different albeit complementary disciplines. In those circumstances the court would accede to the removal application.

JUDGMENT JUDGE PURLE: [1] This application relates to the estate and will trusts of Thomas Edward Weetman (the deceased) who died on 3 November 2008. Most importantly, I am asked to appoint replacement trustees under certain of the will trusts created by his last will. [2] The deceased’s last will was made on 19 September …
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Counsel Details

David Stockill (55 Temple Row, Birmingham B2 5LS, tel 0121 246 7010, email civil@st-philips.com) instructed by Hand Morgan & Owen (17 Martin St, Stafford, ST16 2LF, tel 01785 211411) appeared for the claimants.

David Mitchell (Fountain Court, Steelhouse Lane, Birmingham, B4 6DR, tel 0845 210 5555, email info@no5.com) instructed by Pickering & Butters (19 Greengate Street, Stafford, Staffs, ST16 2LU, tel 01785 603060, email info@pb4law.com) appeared for the 1st, 2nd, 5th to 7th and 9th defendants.

Nicola Preston (Fountain Court, Steelhouse Lane, Birmingham, B4 6DR, tel 0845 210 5555, email info@no5.com) instructed by Pickering & Butters (19 Greengate Street, Stafford, Staffs, ST16 2LU, tel 01785 603060, email info@pb4law.com) appeared for the 3rd and 4th defendants.

Paul Burton (Ground Floor, 3 Stone Buildings, Lincoln’s Inn, London, WC2A 3XL, tel 020 7242 4937, email clerks@3sb.law.co.uk) instructed by Tinsdills (Hays House, 25 Albion Street, Hanley, Staffordshire, ST1 1QF, tel 01782 262031) appeared for the 8th, 10th and 12th defendants.

Louise Corfield (Fountain Court, Steelhouse Lane, Birmingham, B4 6DR, tel 0845 210 5555, email info@no5.com) instructed by Astle Paterson (Astle Paterson, Clay House, 5 Horninglow Street, Burton upon Trent, Staffordshire, DE14 1NG, tel 01283 531366, email enquiries@astlepaterson.co.uk) appeared for the 11th defendant.

Legislation Referenced

  • Trustee Act 1925, s32