Analysis
The claim concerned a dispute between three siblings. Their father, Christopher Ball, had died on 26 June 1978 leaving the income of his estate in trust for his wife, Dorothy Ball, for life and the residue in the proportions one third each to the claimant and second defendant, with a further one third left to the children of the first defendant. All three siblings were appointed executors and trustees of their father’s will. Dorothy Bell died on 1 June 2016 leaving a will appointing her solicitor and accountant as executors. No grant had been obtained in respect of Dorothy’s estate due to the claimant filing a caveat.
The father’s estate had included a minority shareholding in a retail business established by himself and Dorothy known as Wroe’s. The defendants were directors of Wroe’s. There had been a notable failure on the part of all three trustees to consider with sufficient care what their duties as trustees required them to do. The claimant maintained that the defendants had put their role as directors before their duties as trustees.
The claimant issued a claim seeking an account in common form. Prior to the issue of the claim on 29 March 2018 the defendants’ solicitors had provided the claimant’s then solicitors with a five-page letter setting out the assets forming the father’s estate at death and the income paid to Dorothy. It was accompanied by spreadsheets setting out the income received and pages from Wroe’s accounts. After the claim had been issued further information had been provided. The claimant, through his solicitors, maintained a position that the information provided was not sufficient.
Held:
A capital beneficiary has an interest in the way the income trust has been managed, if income has been wrongly categorised or improperly paid away. The claimant had a sufficient interest to seek an order for an account.
An account in common form is the provision of information by the trustees to the beneficiaries. If the beneficiary considers there have been breaches of trust a further step must be taken to challenge the account. The beneficiary must show that an account has not been produced or that the account produced is inadequate.
There is a discretion whether or not to order an account. To the extent that any underlying claim would be time-barred, that would be a relevant factor to the exercise of the court’s discretion (Al-Dowaisan v Al-Salam [2019] applied).
An account to the beneficiaries must cover:
- i) what the assets were;
- ii) what the trustees have done with the assets;
- iii) what the assets now are; and
- iv) what distributions have taken place.
The level of detail the trustees must provide and the formality of the statements and documents will vary with the size and nature of the estate.
The defendants had discharged such obligation to account as between trustees as was accepted to exist by their letter of 29 March 2018.
Although it was not necessary to determine the matter, the court observed:
- i) it was clear that Dorothy had acquiesced in any failures in the method adopted by the trustees; and
- ii) an order for an account would serve no purpose.
The claimant had had such material with which to pursue such a complaint for two years.
JUDGMENT CHIEF MASTER MARSH: [1] This claim concerns a dispute between three siblings. I will, as at the disposal hearing on 5 and 6 March 2020, use the parties’ given names: Christopher, Jennifer and Jonathan. I will refer to their parents as ‘Father’ and ‘Dorothy’. Wroe’s is a store that was set up by Father …Continue reading "Ball v Ball & anr [2020] WTLR 741"