Julian Lindsay Fernandez v Leessa Karen Fernandez & Anor

Introduction

1. This is my judgment on an appeal by the claimant (hereafter “the appellant”) against the order of DJ Wales, made on 3 December 2024, on the respondents’ application, heard on 16 September 2024, and the handing down of his judgment on 29 October 2024. By that order, the judge removed the appellant as an executor of the wills of his parents, Jean Fernandez and Alexander Fernandez, now deceased, and also removed him, and any other person appointed by him, as trustees of a trust settled by the deceased in 2008 (of which the appellant was not an original trustee). Permission for the appeal was given by Mr Justice Michael Green on 3 March 2025. The appeal was argued before me by Julian Reed of counsel for the appellant, and by Toby Bishop and Hugh Jeffery of counsel for the respondents. Background

2. Jean and Alexander Fernandez had six children, one of whom tragically died many years ago. They were survived by the appellant (“Julian”), the first and second respondents (“Leessa” and “Nick”), and the first and (originally) the second defendants to counterclaim (“Vanessa” and “Nigel”). Vanessa has a daughter, Tamsin. Nick has three children, Patrick, Daisy and Felix. Tamsin, Daisy and Patrick are the third, fourth and fifth defendants to counterclaim. Unfortunately, Nigel died in October 2022. For the purposes of dealing with the counterclaim and this appeal, it has not so far proved necessary to appoint someone to represent Nigel’s estate. So the second defendant to counterclaim is currently described merely as “The Estate of Nigel Anthony Greystone Fernandez”. The sixth defendant to counterclaim is a person appointed by Julian as a trustee of the 2008 trust. The defendants to counterclaim have played no part in this appeal.

3. Jean Fernandez died on 29 March 2010 and Alexander Fernandez died on 14 October 2013. At the time of their respective deaths, it was thought that each of them had died intestate. Leessa and Nick took out letters of administration to Jean’s estate in June 2013. Her estate included a flat in Courtfield Road, London SW7 (“Courtfield”), then and now occupied by Vanessa. Later in June 2015, Julian found a home-made will of Alexander, dated 1 October 1996. It appointed Jean and Julian as executors, gave pecuniary legacies, and left the residue to Jean. Julian obtained a grant of probate in January 2016. In February 2018, Julian found a home-made will of Jean, also dated 1 October 1996. It appointed Alexander and Julian as executors, gave pecuniary legacies, and left the residue to Alexander. The claim and the counterclaim

4. On 10 July 2018, Julian issued the claim in these proceedings, seeking to revoke the letters of administration given to Leessa and Nick, and to obtain a grant of probate to himself of the 1996 will. The claim form stated as follows: “The Claimant is the Executor of the Will of the deceased dated 1st October 1996. The Defendants were granted Letters of Administration dated 14 June 2013 on the basis that the deceased died intestate. The Will has since been found and the Claimant seeks revocation of the Letters of Administration and an Order that probate is granted to him.”

5. Leessa and Nick defended the claim for revocation of the letters of administration to Jean’s estate, but only on the basis that they put Julian to proof of the validity of her will, and would cross-examine the witnesses at trial. They put forward no positive case of invalidity (see CPR rule 57.7(5)). They accepted that, if the will were pronounced for, the grant made to them should be revoked.

6. They also made a counterclaim, later amended, which amongst other things sought the removal of Julian as executor of both wills, and also as a trustee of the 2008 trusts. The counterclaim stated in part: “5. The real issue between Julian and the Defendants in this case in respect of the administration of their late parents' estates is not as to the validity of [Jean’s] Will (or as to the validity of [Alexander]'s Will) in that, in the events that have happened, the distribution of the estates on intestacy is not significantly different to the distribution under either or both wills (and as between Julian and the Defendants as beneficiaries would be identical).

6. The question of substance to be determined is rather as to whether the estates of [Jean] and [Alexander] should be administered (or in the case of [Alexander]'s estate, should continue to be administered) by Julian, as he contends they should or whether, as the Defendants contend, for the reasons set out below: a. the administration of both estates should be completed by a single independent administrator; and b. new independent trustees should also be appointed to replace Julian and Philip George (the sixth defendant to counterclaim, 'Mr George') as trustees of a trust declared by [Jean] and [Alexander] in 2008 ('the Trust') for the benefit of the Defendants and their 3 siblings (referred to collectively below as 'the Children').”

7. Paragraph 24B of the counterclaim alleged that interim accounts for Alexander’s estate produced by Julian were materially inaccurate and inconsistent with other documents. They allegedly disclosed that Julian had received unauthorised sums out of the estate or otherwise misapplied estate assets for his own benefit. Paragraphs 24C and 24D made allegations in relation to Alexander’s MG motor car, and in relation to a complaint to police that Nick had stolen it or obtained it by fraud (in which the police declined to become involved). Paragraph 24E of the counterclaim made allegations that Julian had not kept the beneficiaries of Alexander’s estate informed as to developing one of the estate’s assets, the paddock land adjacent to the former family home, Seathrift. Paragraph 25 set out some 14 issues said to be remaining to be determined between Julian and the beneficiaries of Alexander’s estate. Some of these issues involved allegations by Nick and Leessa against Julian of wrongful behaviour as executor. Others involved allegations by Julian against Nick and Leessa of wrongs done by them to the estate.

8. Paragraph 26 said: “By reason of Julian's conduct in relation to the same as set out in paragraphs 23 to 25 above and by reason of Julian's untrusteelike conduct more generally in relation to [Alexander]'s estate (which has been characterised by unjustified hostility to the Defendants, and at least until recently also to Vanessa, unfairness, secrecy, self-interest, highhandedness and a general disregard of his duty to act in the interests of all the beneficiaries of the estate) and [Jean’s] estate and in relation to the Trust (as set out below): a. the Defendants have now lost all trust and confidence in Julian either as the personal representative of [Alexander]'s estate or as a potential personal representative of [Jean’s] estate; and b. in the premises it would be in the interests of the proper administration of [Jean’s] estate and of [Alexander]'s estate and the welfare of the beneficiaries of those estates if a single independent professional administrator were appointed in place of Julian (and in place of the Defendants in respect of [Jean’s] estate).”

9. The counterclaim went on to make allegations concerning the 2008 trust created by Jean and Alexander, and, in particular, that as executor of the sole surviving trustee of the trusts (Alexander) he appointed himself and the sixth defendant, a friend of his, as trustees. The counterclaim further alleges that Julian intimated that he was minded to appoint the trust funds to himself, and refused to give Nick and Leessa any information about the trust. Paragraph 40 said: “By reason of Julian's conduct in relation to the Trust and in relation to [Alexander]'s estate and [Jean’s] estate (as set out above), the Defendants have now lost all trust and confidence in Julian as a trustee of the Trust.”

10. The prayer of the counterclaim was in paragraph 43, and read as follows: “In the premises by way of counterclaim the Defendants seek the relief set out below. a. Pursuant to s.50 of the Administration of Justice Act 1985 orders: i. for the removal of the Defendants and (in so far as he has any right or claim to be entitled to a grant in relation to the same) also Julian as personal representative of [Jean’s] estate and the appointment of an independent professional administrator in their place; and ii. for the removal of Julian as executor of [Alexander]'s estate and the appointment of an independent professional administrator in his place (being the same person as is appointed to administer [Jean’s] estate). b. And further: i. an order that Julian do deliver full estate accounts of his dealings with the assets of [Alexander]'s estate and of his administration of that estate from the date of [Alexander]'s death to the other beneficiaries of that estate and the administrator of that estate appointed pursuant to this claim; ii. further or other relief in respect of the administration of the estates of [Jean] and of [Alexander]. c. Pursuant to section 41 of the Trustee Act 1925 an order replacing Julian and Mr George as trustees of the Trust with two independent professional trustees (one of whom being the same person appointed as personal representative in accordance with the above). d. And further: i. an order that Julian and Mr George do deliver trust accounts in relation to the Trust to the default beneficiaries of the Trust and to the trustees appointed in accordance with the above; and ii. further or other relief with respect to the administration of the Trust. e. And that the costs of this counterclaim be provided for.”

11. In the amended defence to the amended counterclaim, so far as relevant for present purposes, Julian pleads to the amended counterclaim as follows: i) Paragraph 5 is denied. ii) Paragraph 6 is not pleaded to. iii) As to paragraph 24B, Julian says that the interim accounts were draft interim accounts, prepared in circumstances of some difficulty and in respect of which the defendants failed to provide certain information. He admits that the capital account and amount for distribution are overstated. Any mistakes in the draft accounts are not a ground for removing Julian as executor. Julian denies improperly receiving funds from Alexander’s estate, and denies that he has improperly applied the estate’s funds. He stayed in Seathrift in order to ensure the property was secure, to maintain the garden and to look after the cat. He admits receiving £27,700 for these services, to which the defendant agreed. iv) As to paragraphs 24C and 24D, Julian admits that Alexander owned the MG motor car, and that it was included in the draft interim estate accounts. He says that Nick removed the car from Alexander’s home, and that he (Julian) requested in emails sent on various dates that it be returned to Alexander’s estate. Further, Julian puts Nick to proof as to the contact with the police and the allegations made. He says that Nick registered the MG car in his own name without seeking the consent of Julian as executor. v) Paragraph 24E is denied, with Julian giving particulars of information given to the other beneficiaries. Paragraphs 25, 26, 40 and 43 are denied “as alleged or at all”. Procedural matters

12. On 5 February 2019, Leessa and Nick issued an application for summary judgment on the counterclaim. On 19 February 2019, DJ Watson gave directions in these proceedings. He ordered that the issue of the validity of Jean’s will be determined as a preliminary issue, before the other issues raised in the claim and counterclaim. He also ordered that the application for summary judgment be adjourned until further order, with permission to restore. The preliminary issue was tried by DJ Watson in June 2019, and in July 2019 he handed down judgment, holding that Jean’s 1996 will was valid. He ordered that the 2013 letters of administration be revoked. In September 2019, DJ Watson ordered Leessa and Nick to pay Julian’s costs of the validity issue (including detailed assessment), and gave full directions for the trial of the counterclaim. These included amendments to statements of case, disclosure, preparation and service of witness statements and costs management, all leading to a four-day trial hearing. In November 2019 Julian obtained a grant of probate of Jean’s will.

13. However, despite the order of DJ Watson in September 2019, the costs liability was never assessed, and the directions for the trial of the counterclaim were not progressed. Instead, the parties sought to negotiate a solution. For this purpose, they sought a stay of the counterclaim, which was granted by DJ Watson in October 2019. When the stay ran out, they sought another one. Ultimately, no fewer than 10 stays were successively granted, one every few months. There was a mediation in January 2022, but evidently it was unsuccessful, and the stays continued to be sought and granted. In June 2023 these proceedings came before me for the first time, on an application for a further stay. I refused any further stay, on the basis that, if the mediation had failed, and the parties’ continued negotiations were producing no agreement, then the parties had to litigate.

14. Fresh directions were therefore given by DJ Taylor in November 2023, though still leading to a four-day trial. However, after disclosure and exchange of witness statements, Leessa and Nick made an application on 28 March 2024 for a summary determination of the removal application. It was referred to me and I directed that it be listed before DJ Wales. It was then heard by him on 16 September 2024. On 3 December 2024 the judge handed down his written judgment, having previously circulated a draft in the usual way. As I have said, the application was successful. However, at the hearing on 3 December 2024 counsel for Julian sought to persuade the judge to exercise the so-called Barrell jurisdiction (from Re Barrell Enterprises [1973] 1 WLR 19 , CA) and make a number of substantive changes to his judgment. The judge declined that invitation. He then heard argument on consequential matters, including costs, and gave an extempore judgment. Finally, he made the order now under appeal. The judgments below

15. The substantive judgment of the district judge in the court below was reserved, and later delivered in writing. It is a detailed judgment, running to 13 pages of single-spaced A4. It states first of all that it follows the hearing of the defendants’ application for the removal of the appellant as executor of both Jean’s and Alexander’s wills and as trustee of the 2008 trust (paragraph 1). It sets out the background facts in 20 numbered subparagraphs (paragraph 2). It deals with representation at the hearing (paragraph 3), and summarises the evidence before the court, which was all in writing (paragraph 4). So far as I can see, there was no application for any of the makers of the witness statements to be cross-examined. The judge considered the special position of Nigel’s estate, concluding that no one needed to be appointed to represent it at this stage (paragraph 5).

16. In the next section of his judgment, the judge considered the nature of the counterclaim and how it was to be resolved. He set out the contentions of the defendants’ counsel, which in summary were that it was simply for the removal of Julian as executor and trustee, and should be resolved at a one-day hearing without oral evidence and cross-examination and without the need to decide disputes of fact (paragraph 7). He also set out the contentions of the appellant’s counsel. In summary these were that the counterclaim was issued in proceedings under CPR Part 7, that provision had been made for disclosure and a four-day hearing and that the court intended to resolve all the issues raised by the pleadings rather than simply determine the question of the appellant’s removal and replacement (paragraph 8).

17. The judge referred to three decisions of Chief Master Marsh, namely Harris v Earwicker [2015] EWHC 1915 (Ch) , Long v Rodman [2019] EWHC 753 (Ch) , and Schumacher v Clarke [2019] EWHC 1031 (Ch) . He said that these decisions “established that applications for removal of the executors were to be dealt with pragmatically, that exercise of the power of the court was not dependent upon making adverse findings of fact, that consequently oral evidence, cross examination and lengthy hearings were not usually required” (paragraph 9).

18. The judge said it was not clear whether these authorities were cited to the earlier district judge when considering case management (paragraph 10), and considered that the counterclaim was simply one for the replacement of the appellant as executor and trustee, and did not seek the resolution of disputes in relation to the substance of the administration of either the estates or the trusts. In his view there was nothing to take the case out of the general run and it should be resolved at a relatively short hearing without oral evidence (paragraph 11). The judge then dealt with counsel for the appellant’s submissions that in the circumstances of the particular case there should still be a four-day trial (paragraph 12). But the judge decided that that was not the correct way forward, and not in accordance with the overriding objective (paragraph 13).

19. In the next section of his judgment the judge set out the legal framework. He referred to the decisions of Chief Master Marsh, mentioned above, and set out what he considered to be the law on removal of personal representatives in 11 numbered subparagraphs: “14. The legal framework is not contentious and is taken from Chief Master Marsh’s line of authorities. In summary: (1) The core guide is the welfare of the beneficiaries, and the discretion is to be exercised in a pragmatic way. (2) The court must consider first whether the circumstances are such that the discretion is engaged, second whether an order should be made, and third what order should be made. (3) It is unnecessary for the court to find wrongdoing or fault or a lack of good faith. The guiding principle is whether the administration of the estate is being carried out properly. Put another way, is it in best interests of the beneficiaries to replace the personal representative? (4) If there is wrongdoing or fault and it is material such as to endanger the estate the court is likely to exercise its power to replace. However, if the criticism is minor and will not affect the administration of the estate it may not be necessary to exercise the power to replace. (5) The wishes of the testator expressed in the will concerning the identity of the personal representatives is a factor to take into account. (6) The wishes of the beneficiaries may also be relevant, but the beneficiaries as whole or some of them have no right to demand replacement and the court has to make a balanced judgment between competing points of view as to what is in the interests of the beneficiaries as a whole. (7) In the absence of material wrongdoing or fault, the court must consider whether it has become impossible or difficult for the personal representatives to complete the administration of the estate or trusts. The court must review what has been done and what remains to be done. A breakdown in the relationship between some or all of the beneficiaries and the personal representatives will not without more justify their replacement. If, however, the breakdown of relations makes the task of the personal representatives difficult or impossible, replacement may be the only option. Friction or hostility between the trustees and beneficiaries is not of itself a reason for removal, but where that hostility is grounded on the mode in which the trust or estate is being administered, it is relevant. (8) Where the personal representative is or may be in a position of conflict because of intimated claims against him which need to be investigated, this is relevant. Conflict does not have to be established to merit removal; an outward appearance of potential for conflict can result in removal. (9) The additional cost of replacing some or all of the personal representatives in favour of professionals is a material consideration. The size of the estate and the scope of the work which will be needed will have to be considered. (10) It is rarely necessary for an application to result in a trial because it is usually unnecessary to make findings in respect of issues of fact. In fact, in circumstances where the application may be the precursor to a devastavit claim or similar, it is important for the court not to make findings of fact. The approach of the court is whether there appears on the evidence available (or likely to be obtained at proportionate cost) the basis for a claim which has reasonable prospects of success, subject to consideration of available defences. Such a claim must enhance the value of the estate relative to the costs of pursuing it. The evidence need not be determinative, but must not be speculative or contingent. A single borderline complaint might not merit investigation, but a number of complaints viewed as a whole may justify replacement and investigation. (11) It is not open to the parties to demand a trial or require a certain number of days for trial. It is for the court to control. It is exceptional for applications under section 50 or under the inherent jurisdiction to require a full trial. The use of the part 7 procedure, if even appropriate, does not inevitably lead to a trial with cross examination of witnesses.”

20. Apart from his reference to “Chief Master Marsh’s line of authorities” (referred to above at [17]), the judge did not cite authority for these propositions. I shall return to some of these points in due course. The judge then said (in paragraph 15) that the principles relating to the removal and replacement of trustees under the Trustee Act 1925 or the inherent jurisdiction of the court were similar, and referred to London & Capital Finance plc v Global Security Trustees Limited [2019] EWHC 3339 (Ch D) (a further decision of Chief Master Marsh) as authority for that proposition.

21. The final section of the judgment was headed “Consideration”. The judge set out in summary form the allegations made by the defendants, in six numbered subparagraphs (paragraph 16). He then summarised the appellant’s position in relation to these allegations (paragraph 17). I will quote paragraph 18 (which is short) in full: “I do not propose to go through all of the issues raised by the parties and recite all the evidence referred to by the parties’ respective counsel. It is not pragmatic to do so, not least because in accordance with authority making findings of fact is unnecessary and may be inappropriate.”

22. In the next paragraph (paragraph 19), the judge set out what he called his “firm conclusion that Julian should now be substituted as executor and trustee of both the estates and the SJP Trust in favour of a professional trustee.” He set out his reasons in 12 numbered paragraphs over the next four pages of his judgment. Using at least some of his language, I can summarise these reasons as follows: (1) There was clearly a significant breakdown in the relationship between Julian on the one hand, and Nick and Leessa on the other, but it was not necessary to attribute fault or responsibility. (2) Relationship breakdown is not sufficient of itself to justify the replacement of an executor or trustee, but it is relevant where the administration of the estates and trust is compromised, and this is such a case. (3) Julian is the trustee of a discretionary trust and he, Nick and Leessa are objects of that discretion, which is unfettered. The judge set out certain features of the case which in his view amplified the problem. (4) Julian’s intention to help preserve the flat in Courtfield Road as a home for Vanessa was likely to present a direct or indirect conflict of interest and at the very least the appearance of potential conflict of interest. (5) Julian had a similar conflict of interest concerning the determination of the issue as to whether and to what extent he was indebted to the estate. (6) Julian has a similar difficulty in maintaining a claim against the estate for his occupation and maintenance of Seathrift over many years, totalling some £87,000 on his own calculation. (7) Julian’s conduct in dealing with his own and Nick’s alleged debts to the estate in the estate accounts and his conduct in making and withholding distributions gave the clear appearance of bias rooted in personal hostility. (8) The delay in the administration of the estates was worrying, because these were not complicated estates, and, even if the administration were complex, Alexander’s death was over 11 years ago, and Jean’s even earlier. (9) Although Jean and Alexander chose Julian as their executor, he was not thereby excused from the rules relating to conflict of interest and personal bias. (10) Following the death of Nigel, the family is split 50-50, and there is potential for conflict of interest in Julian’s assisting Vanessa to retain the flat in Courtfield Road. (11) Although the appointment will create expense, the estates are of sufficient value to justify it if it is otherwise in the interests of the beneficiaries. Courtfield Road remains to be dealt with, and then the drawing of final accounts, which will require determination as to debts to the estate and of Julian’s claims against the estate. (12) It was in the interest of the beneficiaries as a whole that the final steps of this administration should be completed by an independent professional trustee.

23. The judge was therefore prepared to make orders removing Julian “and any other current trustee of the [discretionary trust] appointed by him, and appointing the trust corporation, and all necessary ancillary orders” (paragraph 20). He asked counsel to agree a minute of order and said that he intended to list a hearing to deal with consequential matters, which could be vacated if the parties were agreed (paragraph 21). As I have said, that hearing was in fact held on 3 December 2024, when the question of costs was resolved.

24. On that day, the judge gave a series of extempore judgments in relation to consequential matters, including costs, which have been transcribed, running in total to some nine pages of single-spaced A4. The first three of these judgments cover (i) an application by Julian for an adjournment, (ii) an application by Julian that the judge should reconsider his judgment and his conclusion, and (iii) how the handover between Julian and the professional personal relationship should operate. The next three extempore judgments are (i) a brief acknowledgement that Julian is entitled to his costs of administering the estates on the indemnity basis, (ii) a decision in principle, briefly expressed, that the respondents as the successful party on the counterclaim were entitled to their costs, and (iii) a longer and more detailed decision that the appellant should pay the respondents’ costs of the application of 28 March 2024 on the indemnity basis, but otherwise should pay the respondents’ costs on the standard basis. Finally, there was a very short decision on the question of interest (assessed at 2% above base rate), and a slightly longer judgment on the question of a payment on account of costs (assessed at £55,000).

25. The order as made by the judge on 3 December 2024 ran to 15 paragraphs. Paragraph 1 dealt with the position of the estate of Nigel. Paragraph 2 gave judgment “on the Counterclaim” to the respondents. Paragraph 3 removed Julian as executor of the wills of Jean and Alexander. Paragraph 4 removed Julian and any other current trustee of the 2008 Trust. Paragraph 5 appointed a professional trustee to be personal representative of the two estates and trustee of the 2008 Trust. Paragraph 6 dealt with the vesting of the assets of the estates and the trust. Paragraph 7 dealt with the handover between Julian and the professional trustee. Paragraph 8 dealt with endorsing a memorandum of the order on the grants of probate. Paragraph 9 is the main costs order, set out below. Paragraph 10 dealt with payment on account of costs, and paragraph 11 with interest. Paragraph 12 dealt with the appellant’s position, and is set out below. Paragraphs 13-15 dealt with any appeal and refused an application for a stay. Paragraph 16 dealt with service of the order.

26. The main costs order made by the judge was contained in paragraph 9: “The Claimant shall pay the First and Second Defendants’ costs of and incidental to the Counterclaim to be assessed on the standard basis and the Application assessed on the indemnity basis, both of which shall be the subject of a single detailed assessment if not agreed.”

27. The position of the appellant, Julian, was dealt with by paragraph 12: “The Claimant shall not be permitted to indemnify himself from the assets of the Estates or Trust in respect of his own costs, expenses or liabilities of or incidental to this litigation subject to the provisions of that order, The Claimant has a statutory right of indemnity in relation to the costs of the administration of the Estates and Trust.” By using the phrase “costs, expenses or liabilities of or incidental to this litigation” this paragraph extends not only to the costs which Julian incurred for his own account, but also to that costs liability which was imposed upon him by paragraph 9. Grounds of appeal

28. There are eleven grounds of appeal, running to some five pages of A4. Retaining much of the original language, I can condense them for present purposes as follows:

1. Error of law in removing the executor under section 50 of the Administration of Justice Act 1985 1.1 The judge misapplied the legal principles governing the removal of an executor under section 50 . 1.2 There was no substantial evidence to show that the executor acted in breach of fiduciary duty or that his removal was necessary for the proper administration of the estate. 1.3 The judge misinterpreted the guidance in Kershaw v Micklethwaite [2010] EWHC 506 (Ch) . 1.4 The judge misapplied the overriding objective. 1.5 The judge failed to consider the views of all the beneficiaries.

2. Failure to consider that the estate was substantially administered with the beneficiaries’ agreement 2.1 The judge failed to give adequate weight to the fact that the estate was largely administered with the beneficiaries’ agreement. 2.2 There was no ongoing conflict or mismanagement warranting removal. 2.3 The judge did not properly apply the principle that removal should be considered only where there is a clear benefit to the estate or beneficiaries.

3. Improper and erroneous conclusions 3.1 The judge erred in finding a conflict of interest without properly considering the content of the correspondence. 3.2 The judge failed to apply the correct legal principles governing conflicts of interest and self-dealing in relation to executors.

4. Improper removal of the trustee from a discretionary trust 4.1 The judge erred by removing the appellant as the trustee of a discretionary trust. 4.2 Removal of a discretionary trustee requires specific findings of misconduct or breach of trust, which were neither alleged nor found. 4.3 The judge failed to understand the difference between a bare trust and a discretionary trust.

5. Unwarranted criticism of an earlier district judge 5.1 The judge improperly criticised the decision of an earlier district judge as having made an error without adequate grounds. 5.2 The criticism was unsupported by evidence or reasoning that justified overturning the prior decision. 5.3 The judge does not sit on appeal from the earlier district judge. 5.4 The defendants’ counsel wrongly submitted that Schumacher v Clarke had not been cited to the earlier district judge, and the judge failed to consider why the district judge had allowed the proceedings to continue under CPR Part 7.

6. Procedural irregularities and unequal treatment prejudiced the appellant 6.1 The judge failed properly to consider the central issues. 6.2 The judge allowed significantly more time to the defendant’s counsel during the hearing. 6.3 The judge failed to address the defendant’s non-compliance with the CPR. 6.4 These procedural irregularities amount to a denial of natural justice. 6.5 Paragraph 5.4 is repeated as a procedural irregularity.

7. Significant misunderstanding of facts 7.1 The judge was wrong on distributions. 7.2 The directions of the earlier district judge had been complied with. 7.3 The judge made findings inconsistent with the correspondence.

8. The judge failed to give sufficient weight to evidence corroborating the appellant’s position 8.1 The judge failed to give sufficient weight to the correspondence. 8.2 The judge failed to give sufficient weight to corroborative documents. 8.3 The judge failed to evaluate substantial and important evidence going to the central issue.

9. Erroneous order for costs against the executor 9.1 The judge erred by ordering the executor personally to bear the costs of the proceedings. 9.2 There was no sufficient evidence of misconduct to justify the costs order. 9.3 The judge failed to consider the defendants’ own litigation misconduct.

10. Costs awarded on an indemnity basis 10.1 There was no proper basis to award indemnity costs.

11. Failure to provide adequate reasons for decisions 11.1 The judge failed to provide adequate reasons for the removal of the executor and the associated costs orders.

29. Unfortunately, not all these grounds are confined to discrete issues, as some of them cover more than one issue, and there is some repetition. For present purposes they can be grouped together as follows: (1) The law on the removal of executors and trustees (grounds 1 to 4); (2) The law relating to conflicts of interest and making unauthorised profits, as applied to executors and trustees (ground 3); (3) Case management issues (grounds 5 and 6); (4) Fact-finding issues (grounds 7 and 8); (5) The exercise of judicial discretion (grounds 2 to 4) (6) Costs issues (grounds 9 and 10); (7) Failure to give adequate reasons (ground 11). Stay and permission to appeal

30. On 31 January 2025 Michael Green J granted a stay of the order pending disposal of the appeal or further order. The judge’s reasons for so doing were: “1. The only reason given in section 11 for the stay is that if an independent administrator is appointed pursuant to the Order the estate will necessarily incur more expense in transferring all the files and getting on top of things in order to begin administering the estate. But in the circumstances of this case, that seems to me to be a sound reason where the Appellant is proposing to challenge his removal as executor on appeal.

2. I note that DJ Wales came to a firm conclusion that the Appellant should be removed because of the conflicts of interest that have arisen in relation to the administration of the estate, but it seems to me that the ring should be held pending consideration of the application for permission to appeal. When that is considered, a further order can be made either continuing the stay until final disposal or removing it. It does seem to me to be potentially prejudicial to all the parties and the estate to incur the costs that might be wasted if the Appellant were to win his appeal.

3. I do not think that much needs to be done in relation to the estate in the meantime and I would urge the Appellant to restrain from taking decisions in relation to the estate until progress on the appeal is further determined.”

31. As already stated, on 3 March 2025, the same judge granted permission to appeal. He also continued the stay. The judge’s reasons for granting permission were as follows: “1. While I understand the desire of District Judge Wales (the ‘Judge’) to move things along in the administration of the estates of Jean and Alexander Fernandez and can see that he came to the ‘firm conclusion’ that the Appellant needed to be removed as executor and trustee, I consider that he arguably miscalculated and erred in law in determining that that was the appropriate way forward in the circumstances of this case. While the litigation had been progressing very slowly, there were moves for the factual disputes between the parties to be resolved at a trial. The Judge considered that that was probably the wrong route to take and that the better course was to adopt a more summary procedure of deciding to remove the Appellant as aforesaid and the imposition of an independent professional trustee.

2. The Grounds of Appeal are extensive and perhaps a little over elaborate. But I do consider that they pass the threshold of having a real prospect of success on appeal. The Judge decided to adopt the procedure he did, for possibly sound case management reasons and in accordance with the guidance of Schumacher v Clarke [2019] EWHC 1031 and clearly balanced many factors as set out in paragraph 19 of his careful judgment. However, after years of litigation but also much progress in the administration of the estates such that there is relatively little remaining to be resolved – being mainly Courtfield Road and the various accounting and disputed items as between the Appellant and the Respondents – I think that an appeal should scrutinise whether the removal of the Appellant is actually the best and cheapest way of resolving these outstanding issues.

3. Of course there is a danger that spending time and money on an appeal will be wasted but there is also the expense of a professional trustee who may have to litigate as well if the Judge’s solution remains in place. I know that mediation has been attempted in this case but it will be referred automatically to the High Court Appeals Mediation Scheme and I hope that every effort will be made by all parties to settle this out of court. It is in no one’s interests to prolong this litigation, diminishing the assets in the estates. But having concluded that there are real prospects of success on this appeal, I must give permission to appeal. The stay will continue in the meantime.” Appeals

32. By virtue of CPR rule 52.21(1), an appeal is limited to a review of the decision of the court below, unless the court considers that in the circumstances of a particular appeal it would be in the interests of justice to rehear the case: Audergon v La Baguette Ltd [2002] EWCA Civ 10 , [83]. There being no need for a rehearing in this case, this appeal is a review. The appellant in his skeleton argument adopts the same position.

33. A second point is that rule 52.21(3) provides that the appeal court will allow the appeal where the decision was (a) wrong, or (b) unjust, because of serious procedural or other irregularity in the proceedings below. Here “wrong” in the first limb means wrong in law, wrong in fact, or wrong in the exercise of discretion. As to the second limb, in Tanfern Ltd v Cameron-MacDonald [2000] 1 WLR 1311 , [33], Brooke LJ (with whom Lord Woolf MR and Peter Gibson LJ agreed) said: “So far as the second ground for interference is concerned, it must be noted that the appeal court only has power to interfere if the procedural or other irregularity which it has detected in the proceedings in the lower court was a serious one, and that this irregularity caused the decision of the lower court to be an unjust decision.”

34. Returning to the first limb of rule 52.21(3), whilst the appeal court will overturn a decision below which was wrong in law, it will not lightly overturn a judge’s findings of fact or evaluative judgments. In Volpi v Volpi Lewison LJ (with whom Males and Snowden LJJ agreed) said: [2022] 4 WLR 48 , [2], “(i) An appeal court should not interfere with the trial judge's conclusions on primary facts unless it is satisfied that he was plainly wrong. (ii) The adverb ‘plainly’ does not refer to the degree of confidence felt by the appeal court that it would not have reached the same conclusion as the trial judge. It does not matter, with whatever degree of certainty, that the appeal court considers that it would have reached a different conclusion. What matters is whether the decision under appeal is one that no reasonable judge could have reached.”

35. And, in FAGE UK Ltd v Chobani UK Ltd [2014] EWCA 5, Lewison LJ (with whom Longmore LJ agreed) said: "114. Appellate courts have been repeatedly warned, by recent cases at the highest level, not to interfere with findings of fact by trial judges, unless compelled to do so. This applies not only to findings of primary fact, but also to the evaluation of those facts and to inferences to be drawn from them … ”

36. So far as concerns an appeal against the exercise of a discretion in the court below, in G v G [1985] 1 WLR 647 , HL, Lord Fraser said (at 651-652): “ … it is of the essence of [a judicial] discretion that on the same evidence two different minds might reach widely different decisions without either being appealable. It is only where the decision exceeds the generous ambit within which reasonable disagreement is possible, and is, in fact, plainly wrong, that an appellate body is entitled to interfere.”

37. More recently, in R (Thornton Hall Hotel Limited) v Wirral Metropolitan Borough Council [2019] EWCA Civ 737 , [2019] PTSR 1794 , the Court of Appeal was dealing with an appeal against a decision to extend time. The court said: “21. … (8) It being a matter of judicial discretion, this court will not interfere with the first instance judge's decision unless it is flawed by a misdirection in law or by a failure to have regard to relevant considerations or the taking into account of considerations that are irrelevant, or the judge's conclusion is clearly wrong and beyond the scope of legitimate judgment … ”

38. A similar principle applies to appeals against case management decisions. Thus, in Global Torch Ltd v Apex Global Management Ltd (No 2) [2014] 1 WLR 2295 , SC, Lord Neuberger, with whom Lords Sumption, Hughes and Hodge agreed, said: “13. … it would be inappropriate for an appellate court to reverse or otherwise interfere with [a case management decision], unless it was ‘plainly wrong in the sense of being outside the generous ambit where reasonable decision makers may disagree’.” (It appears that Lord Clarke, though dissenting in the result, also agreed with this part of Lord Neuberger’s judgment: see at [47].)

39. Thirdly, the court below must give reasons for its decisions: Bassano v Battista [2007] EWCA Civ 370 . But these must be read on the assumption that the judge knew how to perform the judicial functions and the matters which had to be taken into account: Piglowska v Piglowska [1999] 1 WLR 1360 , 1372. And, as Griffiths LJ said in Eagil Trust Co Ltd v Piggott-Brown [1985] 3 All ER 119 , 122, cited many times since, “ … there is no duty on a judge in giving his reasons, to deal with every argument presented by counsel in support of his case. It is sufficient if he shows the parties and, if needs be, the Court of Appeal the basis on which he has acted … ”

40. The same point was made by Lord Phillips MR, giving the judgment of the Court of Appeal, in English v Emery Reimbold & Strick Ltd [2002] 1 WLR 2409 , at [17], where the citation from Griffiths LJ in Eagil Trust was set out, prefaced with the words “As to the adequacy of reasons, as has been said many times, this depends on the nature of the case … ” And, at [19], the court said that the duty to give reasons “ … does not mean that every factor which weighed with the Judge in his appraisal of the evidence has to be identified and explained.”

41. Fourthly, the appeal court does not easily allow a new point to be raised which was not raised below. In Singh v Dass [2019] EWCA Civ 360 , Haddon-Cave LJ (with whom McCombe and Moylan LJJ agreed) said: “16. First, an appellate court will be cautious about allowing a new point to be raised on appeal that was not raised before the first instance court.

17. Second, an appellate court will not, generally, permit a new point to be raised on appeal if that point is such that either (a) it would necessitate new evidence or (b), had it been run below, it would have resulted in the trial being conducted differently with regards to the evidence at the trial …

18. Third, even where the point might be considered a 'pure point of law', the appellate court will only allow it to be raised if three criteria are satisfied: (a) the other party has had adequate time to deal with the point; (b) the other party has not acted to his detriment on the faith of the earlier omission to raise it; and (c) the other party can be adequately protected in costs … ” The arguments Julian

42. Julian sensibly focused his arguments on the points raised by Michael Green J in his reasons for giving permission to appeal. In broad summary, he submitted that it was wrong to remove the appellant, because there was no benefit to the estates and trust in doing so, and in particular there was no threat to their proper administration. In fact, substantial progress had been made in the administration of the estates. In addition, there were issues still outstanding which needed to be resolved by the litigation at the four-day trial originally listed, and the appointment of an independent administrator would not advance their resolution. Moreover, the application actually made by the respondents was in substantially different terms to those set out in their witness statements.

43. As to the progress of the estate administrations, Julian submitted that Jean’s estate was now (at least arguably) fully administered, tax having been paid and her investment portfolio distributed in 2022. He submitted that Alexander’s estate was also fully administered, except for a flat in Courtfields Road, London SW7 (which had passed from Jean to Alexander on her death), in which Vanessa was now living. Julian had obtained planning permission to build on part of the garden of their parents’ home in Dorset (Seathrift), thus increasing the value of the estate for the beneficiaries, and then marketed and sold it to a property developer in 2021. He had realised and distributed the proceeds of Alexander’s investment portfolio in 2023. He had resolved the estate’s tax position and paid all outstanding tax by the end of 2023. He had marketed and sold Seathrift itself in 2024.

44. Julian submitted that what were left to be resolved were the allegations of misconduct and dishonesty against Julian made by Nick and Leessa in their counterclaim (which I have summarised at [7] above). These required a trial with oral evidence and cross-examination. This, he said, was what DJ Watson had originally envisaged in September 2019. And, he further said, it was what I envisaged when refusing a further stay of the proceedings in June 2023. (I may interpolate to say that I did not go quite as far as that. I simply refused the stay, and the existing order of 3 September 2019 would therefore come back into effect. It would have been possible to apply to vary that order if anyone had wished. But at that stage no-one did.) The directions for trial subsequently filed by the parties were approved by DJ Taylor in November 2023. Julian says that the judge below was accordingly wrong to ignore the listing directions already made.

45. However, in his submissions Julian also referred to a list of what he calls “Discreet [sic] triable issues”, to be found in his skeleton arguments before the judge below. These are as follows: “i. Nicholas’ advance inheritance - £90,000 ii. Julian’s labour costs and out of pocket expenses. iii. MG/Martin Motors invoice – disputed. iv. Items of value removed by Leessa from Seathrift.”

46. But, so far as I can see, none of these is an issue on the pleadings as they stand. Nos i, iii, and iv would be claims by the estates against Nick and Leessa. No ii would be a claim by Julian against the estate. None of these claims is made as the litigation is currently constituted. So going to trial would not actually resolve any of these points. The only part of the proceedings left in existence was the counterclaim. The relief sought by that counterclaim was, as set out earlier, simply for the removal of Julian as executor and trustee and for him to account fully for his stewardship of the estates and the trust. There was no claim, for example for devastavit or breach of trust, or for the reconstitution of any estate or trust fund. Nick and Leessa

47. Again in summary, Nick and Leessa say, addressing the seven groups of issues summarised above: (1) the judge below correctly understood and summarised the law on the removal of executors and trustees, and Julian has got it wrong; in particular, there is no special rule relating to trustees of discretionary trusts; (2) the judge below did not misunderstand or misapply the law relating to conflicts of interest and making unauthorised profits, as applied to executors and trustees; (3) Julian chose not to file any evidence on the application, and the judge below sat late to enable both sides to make the submissions they wished; the decision to hear the application was a case management decision within his ambit of discretion; (4) the matters relied on as errors of fact are inconsequential; (5) the judge below did not exercise his judicial discretion in any properly challengeable way; (6) the judge below is the regional costs judge, and both knew the law on costs and applied it correctly; the decision on costs is an exercise of discretion; the judge was entitled to take away Julian’s right to an indemnity out of the estate, and to award costs against him on the indemnity basis; (7) the judge below provided adequate reasons, and the appellant at the hand-down of the judgment did not suggest otherwise, but instead sought to persuade the judge to decide differently. The law Removal of executors

48. In his skeleton argument for permission to appeal, Julian said that removal of an executor is justified only where his or her conduct endangers trust administration or prevents the proper execution of the trust, and requires evidence of serious misconduct, conflict of interest or incapacity to perform the duties of the office. In my judgment, these submissions are not justified on the authorities.

49. The removal of executors from office is governed by the Administration of Justice Act 1985 , section 50 , which relevantly reads: “(1) Where an application relating to the estate of a deceased person is made to the High Court under this subsection by or on behalf of a personal representative of the deceased or a beneficiary of the estate, the court may in its discretion— (a) appoint a person (in this section called a substituted personal representative) to act as personal representative of the deceased in place of the existing personal representative or representatives of the deceased or any of them; or (b) if there are two or more existing personal representatives of the deceased, terminate the appointment of one or more, but not all, of those persons. [ … ]”

50. In relation to section 50 , I was referred to the well-known decision of the Privy Council in Letterstedt v Broers (1884) 9 App Cas 371 . That case was actually about the removal of a trustee, but in The Thomas and Agnes Carvel Foundation v Carvel [2008] Ch 395 , [44]-[47], Lewison J made clear that the same principles applied to the removal of a personal representative. He cited several relevant passages from the speech of Lord Blackburn

51. The first passage is this (at page 306): “It seems to their Lordships that the jurisdiction which a Court of Equity has no difficulty in exercising under the circumstances indicated by Story is merely ancillary to its principal duty, to see that the trusts are properly executed. This duty is constantly being performed by the substitution of new trustees in the place of original trustees for a variety of reasons in non-contentious cases. And therefore, though it should appear that the charges of misconduct were either not made out, or were greatly exaggerated, so that the trustee was justified in resisting them, and the Court might consider that in awarding costs, yet, if satisfied that the continuance of the trustee would prevent the trusts being properly executed, the trustee might be removed. It must always be borne in mind that trustees exist for the benefit of those to whom the creator of the trust has given the trust estate.”

52. After that passage, Lewison J commented as follows: “46. The overriding consideration is, therefore, whether the trusts are being properly executed; or, as [Lord Blackburn] put it in a later passage, the main guide must be ‘the welfare of the beneficiaries’. He referred to cases in which there was a conflict between trustee and beneficiary and continued: ‘As soon as all questions of character are as far settled as the nature of the case admits, if it appears clear that the continuance of the trustee would be detrimental to the execution of the trusts, even if for no other reason than that human infirmity would prevent those beneficially interested, or those who act for them, from working in harmony with the trustee, and if there is no reason to the contrary from the intentions of the framer of the trust to give this trustee a benefit or otherwise, the trustee is always advised by his own counsel to resign, and does so. If, without any reasonable ground, he refused to do so, it seems to their Lordships that the Court might think it proper to remove him; but cases involving the necessity of deciding this, if they ever arise, do so without getting reported.’

47. He added, however, at page 389: ‘It is quite true that friction or hostility between trustees and the immediate possessor of the trust estate is not of itself a reason for the removal of the trustees. But where the hostility is grounded on the mode in which the trust has been administered, where it has been caused wholly or partially by substantial overcharges against the trust estate, it is certainly not to be disregarded’.”

53. I need not set out any other passages from Letterstedt v Broers , because, much more recently, Chief Master Marsh in Harris v Earwicker [2015] EWHC 1915 (Ch) summarised the modern position in these words: “[9] i. It is unnecessary for the court to find wrongdoing or fault on the part of the personal representatives. The guiding principle is whether the administration of the estate is being carried out properly. Put another way, when looking at the welfare of the beneficiaries, is it in their best interests to replace one or more of the personal representatives? ii. If there is wrongdoing or fault and it is material such as to endanger the estate the court is very likely to exercise its powers under section 50 . If, however, there may be some proper criticism of the personal representatives, but it is minor and will not affect the administration of the estate or its assets, it may well not be necessary to exercise the power. iii. The wishes of the testator, as reflected in the will, concerning the identity of the personal representatives is a factor to take into account. iv. The wishes of the beneficiaries may also be relevant. I would add, however, that the beneficiaries, or some of them, have no right to demand replacement and the court has to make a balanced judgment taking a broad view about what is in the interests of the beneficiaries as a whole. This is particularly important where, as here, there are competing points of view. v. The court needs to consider whether, in the absence of significant wrongdoing or fault, it has become impossible or difficult for the personal representatives to complete the administration of the estate or administer the will trusts. The court must review what has been done to administer the estate and what remains to be done. A breakdown of the relationship between some or all of the beneficiaries and the personal representatives will not without more justify their replacement. If, however, the breakdown of relations makes the task of the personal representatives difficult or impossible, replacement may be the only option. vi. The additional cost of replacing some or all of the personal representatives, particularly where it is proposed to appoint professional persons, is a material consideration. The size of estate and the scope and cost of the work which will be needed will have to be considered.”

54. I should add that the Chief Master’s decision has been applied in a number of subsequent cases including Pegler v McDonald [2022] EWHC 2405 (Ch) , Fawcett v Dolo [2024] EWHC 2655 (Ch) , Hanson v Coleman [2024] EWHC 3589 (Ch) , and Osborne v Osborne [2025] EWHC 455 (Ch) . It is a much cited and well-worn authority.

55. In Long v Rodman [2019] EWHC 753 (Ch) , the same judge dealt with another case under section 50 . Of particular significance in this case is the fact, that, as Chief Master Marsh said, “17. This application under section 50 is unusual. Often such applications are made after a long period with an administrator in post based on the administrator’s failure to make substantial progress with the administration of the estate. In this case it is broadly common ground that most of the steps that needed to be taken in the estate have been completed or, where that is not the case, a way forward has been agreed that will not involve Mr Long being required to take further action on behalf of Norman’s estate. It is also common ground between the parties that the relationship between Mr Long and the Rodman sisters has completely broken down. The evidence is replete with accusation and counter-accusation …”

56. The Chief Master went on to say: “19. The discretion under section 50 is to be exercised in a pragmatic way … The need for the court to take a pragmatic approach to the jurisdiction has been disregarded by parties who have, on both sides, adopted an approach that is indulgent and wasteful. Much of the evidence is of limited assistance to the court.

20. At the hearing the court has to consider first, whether the circumstances are such that the discretion is engaged, secondly whether an order should be made under section 50 and, thirdly, if so, what order is appropriate. I would add that it will only rarely be necessary for an application under section 50 to result in a trial because it is usually not normally necessary to make findings in relation to disputed issues of fact for the purposes of dealing with the application.

21. The principles to be applied are not in dispute. The applicants have relied on my attempt to summarise them in Harris v Earwicker [2015] EWHC 1915 (Ch) at [9] … ”

57. The Chief Master then set this out (as reproduced above). Then he said: “22. The core guide to the exercise of the court’s discretion derives from the judgment of Lord Blackburn in Letterstedt v Broers (1884) 9 App Cas 371 , as applied to applications under section 50 by Lewison J in Thomas and Agnes Carvel Foundation v Carvel [2008] Ch 395 . It is the welfare of the beneficiaries.” In the result, the Chief Master removed Mr Long, for (at [68]), “he has conflicts of interest that make it inappropriate for him to remain in office.”

58. And, in Schumacher v Clarke [2019] EWHC 1031 (Ch) , the same judge said: “18. It is critical for present purposes that the core concern of the court is what is in the best interests of the beneficiaries looking at their interests as a whole. The power of the court is not dependent on making adverse findings of fact, and it is not necessary for the claimant to prove wrongdoing. It will often suffice for the court to conclude that a party has made out a good arguable case about the issues that are raised. If there is a good arguable case about the conduct of one or more of the executors or trustees, that may well be sufficient to engage the court's discretionary power under s.50 , or the inherent jurisdiction, and make some change of administrator or trustee inevitable. The jurisdiction is quite unlike ordinary inter partes litigation in which one party, of necessity, seeks to prove the facts its cause of action against another party.”

59. Harris , Long and Schumacher are, of course the three decisions of Chief Master Marsh referred to in the judgment of the judge below. I add only that it is clear that, under section 50 , the burden of proof to establish sufficient grounds for removing a personal representative lies upon the respondents to this appeal. I do not think that it is necessary for me to cite from any other decision in this connection. Removal of trustees

60. The removal of trustees from office is governed by the inherent jurisdiction of the court, and also by section 41 of the Trustee Act 1925 , which relevantly provides: “(1) The court may, whenever it is expedient to appoint a new trustee or new trustees, and it is found inexpedient difficult or impracticable so to do without the assistance of the court, make an order appointing a new trustee or new trustees either in substitution for or in addition to any existing trustees or trustees, or although there is no existing trustee … ”

61. As to the inherent jurisdiction, I have already referred above to the decision of the Privy Council in Letterstedt v Broers (1884) 9 App Cas 371 , and cited a passage from the opinion of Lord Blackburn, and another from the Carvel case, where Lewison J cited other passages from the same opinion. It is clear that much the same considerations apply to removal of a trustee as they do to the removal of a personal representative. In each case the litmus test is the welfare of the beneficiaries as a whole.

62. In London & Capital Finance plc v Global Security Trustees Limited [2019] EWHC 3339 (Ch) , an application was made to remove a trustee. Chief Master Marsh commented on the difference between the inherent and the statutory jurisdictions. He said: “25. … The exercise of the court’s inherent jurisdiction to remove a trustee is exceptional in the sense that it is not a jurisdiction that is commonly exercised, because the power under section 41 usually suffices. There is no basis, however, for adding a threshold test of exceptionality and the corollary that a strong case must be made out if the application is made under the inherent jurisdiction. This is because the jurisprudence dealing with the exercise of the power, whether exercised under section 41 or under the inherent jurisdiction, already has built within it adequate checks and balances. The court will never remove a trustee lightly. The court will always wish to consider the application in light of all the circumstances, with the welfare of the beneficiaries firmly in mind. If there has been misconduct by the trustees, it is likely that an order for removal will be made. On the other hand, the fact that the beneficiaries have fallen out with the trustees is likely to be insufficient on its own.”

63. It is to be noted from this passage that the Chief Master did not say that misconduct by the trustee was necessary before an order for removal would be made. That would have been inconsistent with what Lord Blackburn said in Letterstedt v Broers , with what Lewison J said in the Carvel case, and with what the Chief Master himself had said in both Harris and Schumacher . I note that, in his judgment, the judge below made the same point in different words: “19. … (2) Relationship breakdown is not sufficient of itself to justify the replacement of an executor/trustee, but it is relevant where the administration of the estate/trust is compromised.” Conflicts of interest and making unauthorised profits, as applied to executors and trustees

64. One of the criticisms of the judgment below advanced by Julian (in his skeleton argument in support of his application for permission to appeal) was that the district judge had “conflated the existence of a potential interest with an actual conflict, contrary to established case law”. In my judgment, this criticism misunderstands the law.

65. In Bray v Ford [1896] AC 44 , Lord Herschell, in a famous passage, said (at 50-51): “It is an inflexible rule of a Court of Equity that a person in a fiduciary position, such as the respondent's, is not, unless otherwise expressly provided, entitled to make a profit; he is not allowed to put himself in a position where his interest and duty conflict. It does not appear to me that this rule is, as has been said, founded upon principles of morality. I regard it rather as based on the consideration that, human nature being what it is, there is danger, in such circumstances, of the person holding a fiduciary position being swayed by interest rather than by duty, and thus prejudicing those whom he was bound to protect. It has, therefore, been deemed expedient to lay down this positive rule.”

66. In Boardman v Phipps [1967] 2 AC 46 , HL, Lord Hodson, in the majority, said (at 105-106) “There is no question of fraud in this case; it has never been suggested that the appellants acted in any other than an open and honourable manner. If, however, they are in a fiduciary position they are as trustees bound by duty, succinctly stated by Lord Cranworth LC in Aberdeen Railway Co v Blaikie Brothers [(1854) 1 Macq 461, 471]: ‘And it is a rule of universal application, that no one, having such duties to discharge, shall be allowed to enter into engagements in which he has, or can have, a personal interest conflicting, or which possibly may conflict, with the interests of those whom he is bound to protect’.”

67. And later Lord Hodson said (at 111): “Nevertheless, even if the possibility of conflict is present between personal interest and the fiduciary position the rule of equity must be applied. This appears from the observations of Lord Cranworth LC in Aberdeen Railway Co v Blaikie .” He then went on to refer with approval to the passage from the speech of Lord Herschell in Bray v Ford , cited above.

68. Lord Upjohn (dissenting in the result) said the same thing in different words (at 123): “The relevant rule for the decision of this case is the fundamental rule of equity that a person in a fiduciary capacity must not make a profit out of his trust which is part of the wider rule that a trustee must not place himself in a position where his duty and his interest may conflict.”

69. Then, after setting out the passage from Lord Herschell cited above, Lord Upjohn also set out the passage from the speech of Lord Cranworth LC referred to by Lord Hodson, though he then went on to say this (at 124): “The phrase ‘possibly may conflict’ requires consideration. In my view it means that the reasonable man looking at the relevant facts and circumstances of the particular case would think that there was a real sensible possibility of conflict; not that you could imagine some situation arising which might, in some conceivable possibility in events not contemplated as real sensible possibilities by any reasonable person, result in a conflict.”

70. The other member of the minority, Viscount Dilhorne, referred (at 94) to “the principles so often and firmly laid down as to the liability of agents to account if there has been a conflict or possibility of conflict between their interests and duties, and in breach of their fiduciary duty they have made profits out of their agency without the knowledge and consent of their principals”.

71. Jumping forward a generation, in Bristol & West Building Society v Mothew [1998] Ch 1 , CA, Millett LJ, with whom Otton LJ agreed (Staughton LJ not dissenting), said (at 18A-C): “A fiduciary is someone who has undertaken to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence. The distinguishing obligation of a fiduciary is the obligation of loyalty. The principal is entitled to the single-minded loyalty of his fiduciary. This core liability has several facets. A fiduciary must act in good faith; he must not make a profit out of his trust; he must not place himself in a position where his duty and his interest may conflict; he may not act for his own benefit or the benefit of a third person without the informed consent of his principal. This is not intended to be an exhaustive list, but it is sufficient to indicate the nature of fiduciary obligations. They are the defining characteristics of the fiduciary.”

72. And then, another generation on, in Rukhadze v Recovery Partmers GP Ltd [2025] 2 WLR 529 , SC (decided since the decision of the judge below), Lord Briggs, with whom Lords Reed, Hodge and Richards agreed, said: “16. The essential purpose of the rule that a fiduciary must not without his principal’s consent keep for himself a profit from his position as such, and the related rule that a fiduciary must avoid placing himself in a position where his interest and his duty may conflict (usually called the conflict rule), is to protect or deter those who have undertaken an obligation of single-minded loyalty to someone else from being tempted by human frailty to fall short of that obligation …

17. I have taken the phrase ‘single-minded loyalty’ as the hallmark of a fiduciary undertaking from Bristol and West Building Society v Mothew [1998] Ch 1 , 18 per Millett LJ. It was a case in which claims for breach of duty of care and fiduciary duty were bundled together, so that it was a suitable platform for an explanation of what is special about a duty or relationship being fiduciary.”

73. Lord Briggs then set out the passage from Millett LJ’s judgment above, with evident approval. (Lord Leggatt, Lord Burrows and Lady Rose each gave a judgment concurring in the result, but disagreeing with some parts of Lord Briggs’ reasoning. Nevertheless, Lord Briggs’ judgment represents the majority view of four out of seven justices. I therefore take it as binding upon me.)

74. Across the generations, from Victorian times down to the twenty-first century, there are two connected rules laid down in these passages. The first is that a trustee or other fiduciary must not make an unauthorised profit from his fiduciary position. This is an aspect of the second, wider rule, that a trustee or other fiduciary must not put him- or herself in a position of conflict of interests. As to the first rule, it is clear, for example, that a trustee may benefit from the trust only to the extent that such benefits are authorised (either by the trust instrument, or by the beneficiaries, or, exceptionally, by the court). Thus, in the absence of such authorisation, a trustee must act gratuitously, and is not, for example, permitted to pay him- or herself for services rendered to the trust. (This last point is also an aspect of a third rule, applicable to trustees and personal representatives at least, against unauthorised so-called “self-dealing”. I will return to that.)

75. As to the second rule, it will be noted that in Boardman Lord Hodson refers to “the possibility of conflict”, Viscount Dilhorne refers to “ a conflict or possibility of conflict between their interests and duties ”, and Lord Upjohn says that “ a trustee must not place himself in a position where his duty and his interest may conflict ” (emphasis supplied). Lord Upjohn in his speech then goes on to consider what amounts to a potential conflict. In Mothew Millett LJ says that “A fiduciary … must not place himself in a position where his duty and his interest may conflict” (emphasis supplied). Lord Briggs in Rukhadze similarly says that “a fiduciary must avoid placing himself in a position where his interest and his duty may conflict” (emphasis supplied). It is clear from these citations that the law therefore is not simply that a fiduciary must avoid actual conflicts of interest (though he or she must do that too), but also that he or she must avoid putting him- or herself in a position of potential conflict.

76. This formulation of the rule also brings into relief a further point. This is that a trustee or executor may be put in a position of potential conflict by the settlor or testator appointing a beneficiary as such trustee or executor. This amounts to an implied authorisation by the creator of the fiduciary relationship to exercise fiduciary powers in his or her own favour. Thus, in Sargeant v National Westminster Bank plc (1990) 61 P&CR 518, CA, a testator had both (i) by his will appointed his three children as his executors and (ii) during his life let certain farms to them, which they farmed in partnership. After the testator's death, the children all became beneficially entitled to the capital of the estate under the will. Then, one of the children also died, and the surviving siblings exercised an option in the partnership deed to acquire that child’s share in the partnership. Thus, the surviving children became the only tenants of farms of which they were the sole surviving legal owners, but in which both they and their deceased sibling’s estate were beneficially interested. The surviving children now wished as legal owners to sell the farms, but it was argued on behalf of the deceased sibling’s estate that they were not entitled to do so subject to their tenancies, since their interests as tenants would conflict with their duties as trustees.

77. Nourse LJ, with whom Bingham LJ and Sir George Waller agreed, said (at 523): “It cannot be doubted that the trustees have ever since been in a position where their interests as tenants may conflict with their duties as trustees to the estate of [the deceased sibling]. But the conclusive objection to the application of the absolute rule on which [counsel for the sibling’s estate] relies is that it is not they who have put themselves in that position. They have been put there mainly by the testator's grant of the tenancies and by the provisions of his will and partly by contractual arrangements to which [the sibling] himself was a party and of which his representatives cannot complain. The administrators cannot therefore complain of the trustees' continued assertion of their rights as tenants.” The same point appears from the decision of the Court of Appeal in Edge v Pensions Ombudsman [2000] Ch 602 , 631-33.

78. Of course, the trust instrument may go further, and expressly authorise the exercise of fiduciary powers in favour of the trustee or personal representative. In Re Beatty’s WT [1990] 1 WLR 1503 , for example, Hoffmann J said (at 1506B-C), “The rule that a trustee cannot profit from his trust would ordinarily exclude the trustees themselves from the ambit of the powers, but clause 12(c) of the will allows the trustees to exercise any power conferred by the will, notwithstanding that they may have a direct personal interest in the mode of its exercise. This arguably allows the trustees, subject to having proper regard to their overall fiduciary duties , to make gifts or payments to themselves” (emphasis supplied).

79. As shown by the last sentence of the quotation from Re Beatty , such an authorisation does not mean that the trustee or executor so authorised is able to behave unfairly, or indeed to make any decision that he or she likes. Thus, immediately following the passage set out in Sargeant , Nourse LJ said: “Since the absolute rule on which [counsel] relies does not apply, there is no absolute requirement that the trustees should appoint a new trustee before making any sale subject to the tenancies. Nor is there any absolute bar to their selling to themselves so long as the tenancies subsist. On the other hand, they must continue to discharge their fiduciary duties to [the deceased sibling]’s estate in regard to the freeholds, in particular by obtaining the best price for them subject to the tenancies. In the end, the basis for [counsel]’s arguments was seen to be a fear or a suspicion that the trustees will not properly discharge that duty. But there is no evidence either that they have failed to discharge their duties in the past or that they will fail to do so in the future. Without such evidence, it is wholly inappropriate for the court to interfere.”

80. And, in Edge , Chadwick LJ, giving the judgment of the court, went on to say (at 633): “Nevertheless, there is no doubt that the trustees' decision can be set aside if it can be shown that they failed to consider matters which were relevant, or took into account matters which were irrelevant.”

81. I referred above to a third rule, applicable to trustees and personal representatives at least, against unauthorised so-called “self-dealing”. There are both common law and equitable aspects to this rule. The common law aspect is that a trustee or executor cannot contract with himself or convey property to himself: Williams v Scott [1900] AC 499 , 504, PC; Ellis v Kerr [1910] 1 Ch 529 , 534; Holder v Holder [1968] Ch 353 , 391D-E. The Law of Property Act 1925 , s 72 , and the Administration of Estates Act 1925 , s 36 , have made some inroads on the common law principle where conveyances and assents of land are concerned, and the Law of Property Act 1925 , s 82 , has done so where contracts between (i) A and (ii) A and B are concerned. But it remains the law, for instance, that a sole trustee or executor cannot contract with him- or herself alone.

82. The equitable aspect to this rule is that, even if the contract or conveyance is not void at common law, a sale of trust property to a trustee “is voidable by any beneficiary ex debito justitiae [‘as a debt of justice’: in effect, as of right], however fair the transaction”: Tito v Waddell (No 2) [1977] Ch 106 , 225B. However, the trust instrument ( Re Beatty’s WT [1990] 1 WLR 1503 , 1506B-C), or the beneficiaries ( Holder v Holder [1968] Ch 353 , 399D, 405B), or indeed the court in appropriate circumstances ( Holder v Holder , 402E-F)), may licence such a sale or other transaction. So far as I can see, neither of the wills (which are home-made) nor the 2008 trust (which is a tick-box document added to an investment insurance policy) contains such a provision. Costs

83. The general law on costs is not in dispute. Under the general law, costs are in the discretion of the court: Senior Courts Act 1981 , section 51(1) ; CPR rule 44.2(1). If the court decides to make an order about costs, the general rule is that the unsuccessful party in the proceedings should pay the costs of the successful party: CPR rule 44.2(2)(a). However, the court may make a different order: CPR rule 44.2(2)(b). In deciding whether to make an order at all, and, if so, what order, the court will have regard to all the circumstances, including “the conduct of all the parties”, and to any admissible offer to settle the case (not falling under CPR Part 36) which is drawn to the court’s attention: CPR rule 44.2(4). (If there is a Part 36 offer, however, there is a special regime.)

84. If the general rule applies, it requires the court first to ascertain which is the “successful party”. In Kastor Navigation Co Ltd v Axa Global Risks (UK) Ltd [2004] 2 Lloyd's Rep 119 , Rix LJ (giving the judgment of the Court of Appeal) said (at [143]) that the words "successful party" mean "successful party in the litigation", not "successful party on any particular issue". As a general proposition, the courts prefer to make costs orders covering the entire action (even if then extending only to a proportion of costs), rather than issue-based costs orders. But it is clear that the court may still make an issue-based order if it considers that this better meets the justice of the case.

85. The next point to consider is the basis of assessment of those costs. There are two bases, the standard basis and the indemnity basis. The difference between the two is also well known. CPR rules 44.3(1), (2) provide that, where the court assesses the amount of costs on the standard basis it will not allow costs which have been unreasonably incurred , or are unreasonable in amount , and will only allow costs which are proportionate to the matters in issue. CPR rules 44.3(1), (3) provide that, where the court assesses the amount of costs on the indemnity basis it will do the same, except that the test of proportionality will not apply. Moreover, it will resolve in favour of the receiving party any doubt which it may have as to whether costs were reasonably incurred or were reasonable in amount.

86. The indemnity basis of costs assessment was discussed by Hildyard J in Hosking v Apax Partners Ltd [2019] 1 WLR 3347 , [42], [43]. There, the judge said: “42. The emphasis is thus on whether the behaviour of the paying party or the circumstances of the case take it out of the norm. The merits of the case are relevant in determining the incidence of costs: but, outside the context of an entirely hopeless case, they are of much less, if any, relevance in determining the basis of assessment.

43. The cases cited show that amongst the factors which might lead to an indemnity basis of costs are (1) the making of serious allegations which are unwarranted and calculated to tarnish the commercial reputation of the defendant; (2) the making of grossly exaggerated claims; (3) the speculative pursuit of large-scale and expensive litigation with a high risk of failure, particularly without documentary support, in circumstances calculated to exert commercial pressure on a defendant; (4) the courting of publicity designed to drive a party to settlement notwithstanding perceived or unaddressed weaknesses in the claims.”

87. In the present case, it is also necessary to consider the special rules relating to trust and estate cases. I first mention the relevant primary legislation. This is now contained in section 31(1) of the Trustee Act 2000 , which applies to trustees, but also (by section 35(1) of that Act ) to personal representatives: “(1) A trustee— (a) is entitled to be reimbursed from the trust funds, or (b) may pay out of the trust funds, expenses properly incurred by him when acting on behalf of the trust.”

88. The relevant secondary legislation, focusing more clearly on litigation costs, is contained in CPR rule 46.3 and PD 46 para 1. Rule 46.3 relevantly provides: “(1) This rule applies where – (a) a person is or has been a party to any proceedings in the capacity of trustee or personal representative … (2) The general rule is that that person is entitled to be paid the costs of those proceedings, insofar as they are not recovered from or paid by any other person, out of the relevant trust fund or estate. (3) Where that person is entitled to be paid any of those costs out of the fund or estate, those costs will be assessed on the indemnity basis.”

89. Para 1 of PD 46 provides: “1.1 A trustee or personal representative is entitled to an indemnity out of the relevant trust fund or estate for costs properly incurred. Whether costs were properly incurred depends on all the circumstances of the case including whether the trustee or personal representative (‘the trustee’) – (a) obtained directions from the court before bringing or defending the proceedings; (b) acted in the interests of the fund or estate or in substance for a benefit other than that of the estate, including the trustee’s own; and (c) acted in some way unreasonably in bringing or defending, or in the conduct of, the proceedings. 1.2 The trustee is not to be taken to have acted for a benefit other than that of the fund by reason only that the trustee has defended a claim in which relief is sought against the trustee personally.”

90. It will be seen that this provision picks up on the phrase “properly incurred”, which is the key phrase in section 31(1) of the Trustee Act 2000 , set out above. Where the litigation costs are not “properly incurred”, the trustee or executor is not entitled to an indemnity for them. What paragraph 1 of CPR Practice Direction 46 does is twofold. First, it directs the court in assessing whether the costs were properly incurred to look at “all the circumstances of the case”. Second, it sets out some considerations for the court in making that assessment. None of them is stated to be conclusive one way or the other.

91. It is important to appreciate that a trustee or executor may in some circumstances properly incur costs for its own account, or incur a liability to pay the other side’s costs, in engaging in hostile litigation. In hostile litigation against a third party, a wise trustee or executor will normally seek the protection of a Beddoe order (or at the very least obtain counsel’s opinion that it is proper to incur such liability) before engaging in the litigation, but that is not a formal requirement. However, in hostile litigation between a trustee or executor on the one hand and a beneficiary on the other, the court is not usually in a position to make a Beddoe order. Yet that does not mean that it can never be proper for a trustee or executor to incur costs or a costs liability in such litigation. The matter is fact-sensitive.

92. In Armitage v Nurse [1998] Ch 241 , there was breach of trust litigation between a beneficiary and trustees. At first instance, the judge made an order awarding the successful trustees only 80% of their costs to be paid by the beneficiary, thus depriving them of the other 20%, because they had put forward arguments on which they had been unsuccessful. The judge then went on to deprive them of the right to recoup themselves out of the trust fund of that 20% ( ie the part which they would not recover from the other party) simply on the grounds that the claim was a hostile claim against them for breach of trust.

93. On appeal, Millett LJ, with whom Hirst and Hutchinson LJJ agreed, held (at 263) that, although the judge could properly make the 80% inter partes litigation costs order, he “ … also deprived them of their right to recoup themselves out of the trust fund to the extent of that 20 per cent. on the ground that the claim was a hostile claim against them personally for breach of trust. In my opinion, that was not a sufficient ground for denying them their contractual rights. As things stood at the conclusion of the judge's judgment, he had held that the respondents were absolved by clause 15 from liability in respect of all the claims for breach of trust pleaded against them, with the result that the greater part of the action was bound to fail … Accordingly, unless the pleadings were amended, the action would be dismissed without any inquiry into the trustees’ conduct. This would not provide any basis for depriving the respondents of their rights.”

94. This is important, because it makes clear that the decision on the litigation costs order does not automatically deal with the trustee indemnity question. On the other hand, the position is or may be different where the beneficiary’s claim against the trustee or executor succeeds. Armitage v Nurse was a case where the beneficiary failed. In the same case, Millett LJ said (at 262), necessarily obiter , “Trustees are entitled to a lien on the trust fund for the costs of successfully defending themselves against an action for breach of trust … But on what principle can one justify their right to recoup themselves out of the trust fund for the costs of unsuccessfully defending themselves against such an action? It offends all sense of justice.” The grounds of appeal: discussion Ground 1: Error of law in removing the executor under section 50

95. Julian says that the district judge misapplied the relevant legal principles, failing to establish that his continuation in office would impede the due administration of the estate or cause harm to the beneficiaries. Moreover, no substantial evidence was presented to show that Julian acted in breach of fiduciary duty or that his removal was necessary for the proper administration of the estate. Nor did he make any “proper finding that either [of Jean’s or Alexander’s] estate was endangered, [or] that the welfare of the beneficiaries was compromised”.

96. But, on the authorities, none of these formulations is the test. As stated by Chief Master Marsh in Harris v Earwicker [2015] EWHC 1915 (Ch) , [9]) the test is “ … whether the administration of the estate is being carried out properly. Put another way, when looking at the welfare of the beneficiaries, is it in their best interests to replace one or more of the personal representatives?”

97. And, in Schumacher v Clarke [2019] EWHC 1031 (Ch) , [28], the same judge said: “ … The power of the court is not dependent on making adverse findings of fact, and it is not necessary for the claimant to prove wrongdoing. It will often suffice for the court to conclude that a party has made out a good arguable case about the issues that are raised … ”

98. The judge held (at [19](2)) that personal hostility was now placing significant hurdles in the way of finalising the administration of the estates, and (at [19](4)) had had a direct impact on that administration. He gave his reasons for that finding. These included Julian’s various conflicts of interest. Julian as trustee of the 2008 trust had power to appoint the trust fund among a class including himself (at [19](3)), although he was not appointed an original trustee (and therefore cannot claim to have been impliedly authorised to make an appointment in his own favour) (at [19](3)(g)). Julian also had conflicts of interest over his desire to help preserve Courtfield Road as a home for Vanessa (at [19](4)), and in relation to his claims against the estate and claims of the estate against the beneficiaries (including himself) (at [19](5)-(7)). Even though Julian was appointed executor by Jean and Alexander respectively, that does not dispense him from observing his fiduciary duties to act in the best interests of all the beneficiaries (at [19](9)), and his discretionary decisions can still be challenged where the evidence supports it. The delay in completing the administration was worrying (at [19](8)).

99. In my judgment, these were findings open to the judge on the evidence, and matters which he was entitled to take into account in deciding to remove Julian. The fact that Julian does not agree with the judge’s findings, or his evaluative decision, and perhaps considers that another judge would have found and held differently on the same evidence, is irrelevant. The judge concluded (at [19](12)) that it was in the interests of the beneficiaries as a whole that the final steps of this administration should be completed by an independent professional trustee.

100. In reaching that decision, the judge expressly took into account (at [19](11)) the fact that “the appointment of professional executors and trustees will create a new and significant layer of expense which will diminish the value of the net estate to the detriment of all beneficiaries”. But he considered that it was in the interests of the beneficiaries, and the estates were of sufficient size to justify the extra expenditure. That evaluation was a matter for him and not for the appellate court, unless he went plainly wrong, ie it was a decision that no reasonable judge could have reached. I have looked carefully at the material before me. I am not satisfied that he did go “plainly wrong”. On the contrary, I think he made a sensible decision, and one which (on the material I have seen) I would have made myself.

101. The delays so far are enormous. The personal hostility between the parties is patent, as are Julian’s potential conflicts of interest. The hostility and conflicts are impeding the proper administration of the estates. In that administration, Courtfield Road is still to be dealt with, as are the various claims between the estates and the beneficiaries. At some point the trustees of the discretionary trust will have to decide how to apply the trust fund. None of these things is likely to be achieved by Julian in a sensible timescale and at modest cost. The value at stake is significant enough to be able to absorb the costs involved in appointing an independent trustee, and 50% of the beneficiaries wish this to happen. It is not necessary to decide whether Julian has been guilty of any devastavit or breach of trust. In my judgment, as in that of the judge, the welfare of the beneficiaries demands that he be replaced for the future. Accordingly, this ground of appeal fails. Ground 2: Failure to consider that the estate was substantially administered with the beneficiaries’ agreement

102. Julian says that the judge overlooked or failed to give adequate weight to the fact that the estate was largely administered in accordance with the agreement of the beneficiaries, and that there was no ongoing conflict or mismanagement warranting removal. As to the former point, in his judgment (at [17]), the judge clearly recognised the administration which had been carried out and that, in Julian’s view at least, only the flat at Courtfield Road remained to be dealt with. The weight that the judge gave to this was a matter for him. In doing so, he did not exceed his margin of appreciation. (I note that an argument in Long v Rodman [2019] EWHC 753 (Ch) , that the administration was almost complete, and there was no need for removal, did not prevent the Chief Master doing so.) The judge also took into account (at [19](4)-(7)) possible claims by the estate against the beneficiaries (including Julian) and vice versa, which were also matters requiring administration, and the considerable length of time that administration had so far taken (at [19](8)).

103. As to the latter point, this falls into two parts. The first is that the judge in his judgment (at [19](4)-(7)) was quite clear that Julian had various potential conflicts of interest. The second is that I have already made clear that it is not necessary to establish any mismanagement in the administration of the estates to justify the removal of a personal representative.

104. Julian also says that removal creates disadvantages. In his judgment, the judge acknowledged this (at [19](11)). It was for him to make an evaluative judgment by weighing up the advantages and disadvantages of removal. This is what the judge did, and an appellate court will not interfere with his decision unless compelled to do so, by being satisfied that he was plainly wrong, in the sense which I have already explained. I am not so satisfied. In my judgment, this ground fails also. Ground 3: Improper and erroneous conclusions

105. Julian says that the judge failed to apply the correct legal principles governing conflict of interest and self-dealing in the context of executors. He also says that the judge erred in finding a conflict of interest without properly considering the content of the correspondence, and that his finding of a risk of self-dealing by Julian was speculative and unsupported by the factual matrix before the court.

106. As to the legal principles, the judge was taken to and read the relevant parts of Bray v Ford and Bristol and West Building Society v Mothew . The Supreme Court’s decision in Rukhadze was handed down only after the hearing before the judge, but this merely affirmed the position as set out in the earlier authorities. Even though the judge did not refer to the authorities in his judgment, there is no basis for supposing that he was relying on any others, let alone that they did not express the correct principles. The terms of his judgment are consistent with the application of the principles set out in those three cases.

107. Julian does not refer to specific items of correspondence as not having been taken into account, but the fact that the judge does not analyse the correspondence in his judgment does not mean that he did not have it in mind. I must approach consideration of his judgment on the assumption that the judge knew how to perform the judicial function, and therefore would take into account all the evidence before the court. It is not necessary that in his judgment the judge deal with every point made to him in argument. The weight that he gave to the evidence was a matter for him, and I have no basis for interfering with his decision in relation to that weight.

108. The judge’s appreciation of the risk of self-dealing by Julian is clear from the judgment (at [19](4)-(7)). I see no basis for calling this risk “speculative”, if by that is meant a risk which should not be taken into account by the judge. It was a matter for him to evaluate, having taken the evidence into account. There is no evidential basis for supposing that he did not do so. This ground too fails. Ground 4: Improper removal of the trustee from a discretionary trust

109. Julian says that removal of the trustee of a discretionary trust requires specific findings of misconduct or breach of trust, which were neither properly alleged nor established in this case. He relies on the decision of Lewison J in the Carvel case. That case, of course, is not one about the removal of the trustee of a discretionary trust, but instead one about the removal of a personal representative of the estate of the deceased person. Leaving that point on one side, however, what is important to notice is that there is no requirement to make specific findings of misconduct or breach of trust in order for the court to exercise either its inherent jurisdiction to remove the trustee or the jurisdiction arising under section 41 of the Trustee Act 1925 . Under the inherent jurisdiction, the main guide is “the welfare of the beneficiaries” and under section 41 , is whether it is “expedient” to appoint a new trustee in place of an old one. The judge correctly cited the decision in London & Capital Finance plc v Global Security Trustees Limited [2019] EWHC 3339 (Ch D) (on which the appellant himself relies in his submissions).

110. Julian also says that the judge “wrongly failed to understand the differences between a bare trust and a discretionary trust, in particular the discretion bestowed upon the trustees”. Julian does not refer to any particular passages in the judgment demonstrating such a failure to understand, and I have not found any. The judge is an experienced district judge, and before that was an experienced and well-respected Chancery practitioner. I decline to believe that this judge did not know the difference between a bare trust and a discretionary trust. Nor, indeed, can I see what difference this point makes in the present case. The test for removing the trustee of a bare trust is exactly the same test as that for removing the trustee of a discretionary trust, whether under the inherent jurisdiction or under section 41 . A trust is a trust is a trust. There is nothing in this ground of appeal. Ground 5: Unwarranted criticism of an earlier district judge

111. Julian says that the judge improperly criticised the order of an earlier judge dated 3 September 2019, asserting, without adequate grounds, and without any evidence or reasoning, that the earlier judge had made an error in listing the counterclaim for trial over four days. Certainly, the judge says (at [11]) that “the counterclaim should have proceeded under the procedural and substantive framework set out in Chief Master Marsh’s line of authority.” What he says was “an error” was “the extent (if at all) that the counterclaim has proceeded and directions have been made to determine all of the factual issues complained of in the pleadings, in addition to determining whether [Julian should be replaced]”. So, the only “error” lay in treating and preparing for the trial of the counterclaim for an order removing and replacing Julian as though it also included “all of the factual issues complained of in the pleadings”.

112. However, whether the judge was intending to attribute the “error” to the earlier judge (which I doubt) rather than to the parties themselves, the fact is that the judge in the present case was not seeking to revisit, let alone rewrite, the trial directions given by the earlier judge. Instead, he was simply adjudicating upon a stand-alone application in Form N244, which the respondents had issued, and which sought the removal of Julian and his replacement by an independent trust corporation. In so adjudicating, he was loyally applying the principles laid down by Chief Master Marsh in the trio of cases already referred to, and therefore deciding that it was unnecessary to find any mismanagement or breach of trust on the part of Julian. This no more amounted to an appeal from the earlier judge’s trial directions than would an application in an ordinary case for summary judgment before trial. Whether to hear the application at all was a case management decision with which, on the material before me, I cannot interfere.

113. Julian also says that the respondent’s counsel wrongly submitted that the earlier judge had not had his attention drawn to, or taken account of, the decision in Schumacher v Clarke . In his judgment, the judge below said it was not clear to him whether the parties directed the earlier judge to the decisions by Chief Master Marsh, and that Julian’s counsel “does not positively say that these authorities were cited, but confidently says that the intention of the court was to resolve all the factual issues raised by the pleadings, rather than merely determine whether [Julian should be replaced].” From the transcript it is clear that the reason that Julian’s counsel (very properly) did not give a positive answer to the judge’s question was that the hearing was five years ago, there was no transcript, and he did not wish to say anything which later turned out to be wrong. In his judgment, the judge below said that he accepted counsel’s explanation. On that basis, if the respondent’s submission was indeed wrong, it could have made no difference. This point is a sideshow, and the ground of appeal itself goes nowhere. Ground 6: Procedural irregularities and unequal treatment prejudiced the appellant

114. Julian complains of four procedural irregularities in the course of the hearing before the judge below. The first is that the judge failed properly to consider the central issues before deciding the case. The second is that he allowed “significantly more time” to the respondent’s counsel, thus “creating an unfair procedural imbalance”. The third is that the judge failed to address adequately or to sanction the respondent’s non-compliance with the CPR. The fourth repeats a point made earlier, that the respondent’s counsel wrongly submitted that the earlier judge had not had his attention drawn to, or taken account of, the decision in Schumacher v Clarke . Overall, Julian says that these irregularities amount to a denial of natural justice and undermine the fairness of the hearing.

115. As to the first of these, there is a real problem about the phrase “central issues”. Although that phrase is used (so far as I can see, only once) in the grounds of appeal, it is not defined in those grounds, and it does not appear at all either in the skeleton argument prepared for Julian for the hearing before the district judge or in the skeleton argument prepared for Julian for hearing before me on the appeal. Nor do I recall any discussion of this phrase during the hearing. So, I am not clear what the phrase as used in the grounds of appeal is intended to refer to. In the transcript of the hearing before the district judge I have found two references to “central issues”. Both are made by Julian’s counsel. One of them (at page 261 of bundle 5) is “The central two issues are whether Nick owes £90,000 to the estate, and Nick's assertion that Julian owes £117,000 to the estate.” The other (at page 264 of bundle 5) is “So, the central issue is that school fees order.”

116. I do not know if these are what Julian meant to refer to by “the central issues”. If so, then in my judgment they are not central at all. The central issue is whether Julian should be removed as executor and trustee. The prayer in the counterclaim does not ask for determination of any of these other three issues. Moreover, the judge below was not dealing with the counterclaim anyway. He was dealing with the application made by the respondents by notice dated 28 March 2024. That application did not ask for the determination of any of those three issues either. It asked instead for summary determination of the issue whether Julian should be removed, together with the appointment of a trust corporation in his place, vesting orders and costs.

117. If, on the other hand, Julian meant to refer to some other issues as the “central issues”, then he has not explained what they are. I am not able to hold that the judge reached the wrong conclusion when I am not told what it is that he is supposed to have done wrong. In my judgment this point goes nowhere.

118. As to the second point, the transcript of the hearing before the judge (excluding the cover page) runs to 83 pages. Looking at it, the respondents’ counsel appears to have been on his feet for some 45 of these, and the appellant’s counsel for some 33. Whilst it is clear that the respondents (being the applicants in the application) addressed the court for longer than the appellant, I do not find the disparity either surprising or significantly unbalanced. Having read the transcript, I gain no impression that the appellant’s counsel had in any way to truncate or shorten his submissions, and his submissions before me do not say that he did. On my reading of the transcript, he said everything that he wished to. I am told that the court sat late in order to make sure that he could do so. The fact that one counsel speaks more or for longer than the other can be explained in a myriad ways other than procedural irregularity. There is nothing in this point.

119. The third point is the alleged failure to address adequately or to sanction the respondent’s non-compliance with the CPR. I cannot recall any oral submission on this point during the hearing. Nor have I found any reference in Julian’s skeleton argument for the hearing before me which deals with this. However, there is a reference in Julian’s skeleton argument for the hearing before the judge below as follows: “9. … [The respondents’ solicitors] decided, without permission of the Court, that by virtue of them filing the application, they need not comply, and have not – that of course, was simply wrong, as they required the Court’s permission and now require relief from sanction to file any evidence. The consequence is that there ought to be an adverse costs order against Leesa [sic] and Nick.”

120. But, whatever the merits of that submission, that would not mean that the respondents were not entitled to be heard on their application of 28 March 2024, nor that, if they were otherwise entitled to the relief they sought by that application, the court should not grant it. This is not alleged to be (and is not) a case of contempt of court: cf Hadkinson v Hadkinson [1952] P 285 , CA. This point too goes nowhere.

121. As to the fourth point, I have already held that, even if the respondent’s submission about the citation of Schumacher v Clarke were wrong, it would make no difference. In any event, making a submission which turns out to be factually wrong is not a procedural irregularity automatically justifying the overturning of a judicial decision. If it could be shown that the court based its decision on the erroneous factual statement, then that might be different. But there is nothing in the judgment below to indicate that. There is nothing in this point.

122. Accordingly, this ground also fails. Ground 7: Significant misunderstanding of facts

123. Julian says that the judge was wrong on distributions, that the directions of the earlier judge had been complied with, and that the judge below made findings inconsistent with the correspondence. However, his skeleton argument for the hearing before me does not give any particulars of any of these allegations. And, as I have pointed out, an appellate court should not interfere with the trial judge's conclusions on primary facts unless it is satisfied that he was plainly wrong. As a result, none of these points is made out. And, in any event, none of them could make any difference as to the core question whether it was in the best interests of the beneficiaries to replace Julian. This ground also fails. Ground 8: Failing to give sufficient weight to evidence corroborating the appellant’s position

124. Here it is said that the judge failed to give sufficient weight to the correspondence before him, and to corroborative documents available, and also failed to evaluate substantial and important passages of evidence that went to the “central issue”. (I will assume that this is the question of the removal of Julian. If it is meant to be anything else, then I do not know what it is.) Again, before I can interfere, I have to be satisfied that the judge was plainly wrong on one or more of these questions of fact finding. What weight to give to the evidence was a matter for the judge. The fact that the appellant does not like the judge’s decision, or that another judge might make a different decision, is irrelevant. And there is no other basis put forward for showing that the judge was plainly wrong. This ground too fails. Ground 9: Erroneous order for costs against the executor

125. Under this ground it is said that the judge went wrong in law by ordering the executor personally to bear the costs of the proceedings. Although an executor can be deprived of his indemnity against the estate, no sufficient finding of misconduct was made to justify such deprivation. Moreover, the judge wrongly overlooked the respondents’ own litigation misconduct.

126. On any view, the respondents were the successful parties. The judge was entitled to exercise his discretion to order Julian to pay the costs. A costs order against a trustee or executor is always personal, although the trustee or executor is entitled to an indemnity out of the trust fund or estate in respect of that liability if properly incurred. However, a trustee or executor is not entitled to an indemnity so long as he or she has committed an unremedied breach of trust or duty, and may be deprived of the indemnity if he or she has committed so-called “misconduct” (now summarised in paragraph 1 of CPR Practice Direction 46). In the present case, the judge ordered that Julian should be deprived of his indemnity in relation to the costs of the litigation , though not in relation to his costs of the administration of the estates and trust.

127. In the respondents’ skeleton argument prepared for the consequentials hearing on 3 December 2024, they argued that Julian should not be permitted to indemnify himself out of the assets of the estates or the trust in respect of the costs of and incidental to the litigation. Their draft order (which the judge used as the basis for his own) included such a provision. In his extempore judgments, the judge does not deal specifically with the decision to deprive Julian of his indemnity in relation to litigation costs, although at paragraph 14 he does say this: “The question is whether this is trust litigation (in which the parties’ costs might be met from the estate) or hostile litigation (in which the usual inter partes principles regarding costs would apply). In my judgment, it is plainly hostile litigation”.

128. The transcript of the proceedings shows that the respondents’ counsel specifically raised the issue with the judge. He said: “It is not my understanding that the claimant is saying that he can indemnify himself in relation to his own costs out of the estate or anything like that.” To this the judge responded: “No, the draft order goes to administration costs”, and later added “Administration costs, they do mean administration costs, not litigation costs”.

129. Taking the remarks which the judge made in his costs judgment together with this exchange with the respondent’s counsel, in my judgment it is clear that the judge considered that Julian should not be entitled to an indemnity from the estates or the trust for his own hostile litigation costs and costs liability, even though he should be entitled to one for his costs of the administration of the estates and the trust. In other words, Julian acted “in substance for a benefit other than that of the estate, including the trustee’s own”, within the meaning of paragraph 1 of CPR Practice Direction 46, and therefore was no longer entitled to his indemnity. In my judgment, the judge was entitled on the material before him to reach that conclusion, and this ground of appeal also fails. Ground 10: Costs awarded on an indemnity basis

130. Julian says that the judge was wrong to award costs on the indemnity basis, because that requires “a finding of exceptional conduct, such as bad faith, fraud or gross negligence, none of which were established in this case”. For this proposition he cites the decision of Tomlinson J in Three Rivers District Council v Bank of England [2006] EWHC 816 (Comm) . I have read that decision, but regret to say that I do not find anything in the judgment of Tomlinson J which approaches that proposition. Instead, the judge (at [25]) expressed the wholly conventional view that there had to be “some conduct or some circumstance which takes the case out of the norm”.

131. Tomlinson J went on, in the same paragraph, to say: “The following circumstances take a case out of the norm and justify an order for indemnity costs, particularly when taken in combination with the fact that a defendant has discontinued only at a very late stage in proceedings; (a) Where the claimant advances and aggressively pursues serious and wide ranging allegations of dishonesty or impropriety over an extended period of time; (b) Where the claimant advances and aggressively pursues such allegations, despite the lack of any foundation in the documentary evidence for those allegations, and maintains the allegations, without apology, to the bitter end; (c) Where the claimant actively seeks to court publicity for its serious allegations both before and during the trial in the international, national and local media; (d) Where the claimant, by its conduct, turns a case into an unprecedented factual enquiry by the pursuit of an unjustified case; (e) Where the claimant pursues a claim which is, to put it most charitably, thin and, in some respects, far-fetched; (f) Where the appellant pursues a claim which is irreconcilable with the contemporaneous documents; (g) Where a claimant commences and pursues large-scale and expensive litigation in circumstances calculated to exert commercial pressure on a defendant, and during the course of the trial of the action, the appellant resorts to advancing a constantly changing case in order to justify the allegations which it has made, only then to suffer a resounding defeat.”

132. Julian complains that none of the examples given by Tomlinson J applies to this case. He treats those examples as exclusive of the circumstances in which an indemnity costs order can be made. In my judgment, that is not the law. As Julian himself says in his skeleton argument, “the threshold for indemnity costs is conduct ‘out of the norm’,” relying on the decision of the Court of Appeal in Excelsior Commercial & Industrial Holdings Ltd v Salisbury Hammer Aspden & Johnson [2002] EWCA Civ 879 .

133. What the judge in the present case actually said in his costs judgment was: “27. … The indemnity basis is appropriate where the conduct of the parties or, in the particular circumstances of the case or both, were such as to take the case out of the norm… meaning that the conduct complained of is something outside the ordinary and reasonable conduct of proceedings.” For my part, I cannot fault that formulation of the test.

134. In his skeleton argument, Julian goes on to say that the judge ordered him “to pay costs on the indemnity basis, without identifying conduct ‘out of the norm’. This was an error of principle and a manifestly disproportionate use of the court’s discretion under CPR 44.3, warranting appellate intervention.”

135. The judge in fact declined to make a costs order on the indemnity basis for the period of the litigation before the application of March 2024. Up to that point, costs were awarded on the standard basis. However, from that point onward, it ought to have become clear to Julian (the appellant) that his position was untenable. In his judgment he said: “38. At that point, it seems to me it was clear to the claimant that the administration could not be completed while he was in post and the hostile relationship between the parties continued. Furthermore, it seems clear to me that the claimant must have been aware that he had a conflict of interest. He continued to make his claims against the estate to be paid as a carer for his father, to be paid as a caretaker and gardener of Seathrift. The defendants continued to maintain claims that he should account to the estate for the use of Seathrift. The defendant continued to maintain that the estate had a claim against the claimant in respect of a debt, albeit disputed by the claimant. All of those matters meant that the claimant had a clear conflict of interest and in my judgment the only option was to step down.”

136. That is a clear statement of the conduct on which the judge relied as “out of the norm” in deciding to make an order for costs to be paid on the indemnity basis. Accordingly, in circumstances where the judge considered that Julian should have realised that he would have to be replaced as executor and trustee, it was in the judge’s view sufficiently “exceptional” or “out of the norm” for him to continue to resist the application to remove him, so as to justify costs against him on the indemnity basis. That was an evaluative decision by the judge, and it was for him to make. I cannot interfere unless it was a plainly wrong decision. On the material before me, I cannot say that. This ground of appeal also fails. Ground 11: Failure to provide adequate reasons for decisions

137. Julian says that the judge “failed to provide adequate reasons for [his removal] and the associated costs orders, and in particular how he disregarded the correspondence”. This, he says, “undermines the transparency of fairness of the decision-making process and constitutes an error of law”. For the latter proposition he cites the decision of the Court of Appeal in English v Emery Reimbold & Strick Ltd [2002] 1 WLR 2409 . I agree that that authority explains the obligation on a judge to give reasons for his or her decision, but, as the judgment of that court makes clear, that does not mean that the reasons have to be exhaustive, or that every factor that weighed with the court has to be explained. What is necessary will depend on the particular circumstances of the case.

138. In his skeleton argument, Julian says “There is complete failure to analyse the facts and provide proper reasons in the costs judgment … ” I am afraid that I disagree. The costs judgment, dealing with the decision in principle to award the respondents their costs, and the basis of assessment, covers some 27 paragraphs over five pages of the transcript. They contain much detailed reasoning and, in my judgment, more than adequately explained the judge’s decision on these matters. There is nothing in this ground of appeal. Final comment

139. The approach taken by Julian in his appeal submissions, both written and oral, has been in effect to attempt to re-argue the whole case. This follows the appellant’s unsuccessful attempt before the judge below, on the handing-down of judgment, to persuade him to alter the substance of his judgment under the so-called Barrell jurisdiction. But, as I pointed out above (at [29]), this appeal is a review of the decision below, a position which (as I also pointed out) was also adopted formally by the appellant. Conclusion

140. In my judgment, for the reasons given above, all the grounds of appeal fail, and this appeal must be dismissed. I should be grateful to receive a minute of order, preferably agreed between the parties, to give effect to this judgment.