Smith v Campbell: Partial trustee removal following breakdown in family business trust

The High Court has delivered an important judgement on trustee removal in Nathan James Smith & Ors v Ian Patrick Campbell & Ors [2025] EWHC 3011 (Ch), demonstrating that whilst mere friction between trustees and beneficiaries is insufficient for removal, hostility that threatens proper trust administration may warrant the court's intervention.

Graham Cheslyn-Curtis died in 2018 leaving an estate valued at approximately £8.2 million, including Millpledge Group, a medical products supply business. His will established a discretionary trust ("The Whinleys Trust") for his partner Suzanne Smith, her children Nathan and Leah, and Graham's son Guy. Four trustees were appointed: business advisers Ian Campbell (Paddy) and Malcolm Taylor, alongside family members Sarah Cheslyn-Curtis and Maldwyn Worsley-Tonks.

Graham's detailed letter of wishes envisaged Nathan and Leah becoming Millpledge directors under Paddy and Malcolm's mentorship, with business profits funding both reinvestment and distributions to beneficiaries. This vision comprehensively failed. Following deteriorating board relations, Nathan and Leah were removed as directors and dismissed as employees. The claimants immediately issued proceedings seeking replacement of all four trustees.

Grounds advanced and rejected

The claimants advanced six grounds for removal, most of which Deputy Master Holden rejected. The court found no sustainable evidence that trustees had failed to notify beneficiaries of their interests, noting any technical breach was immediately rectified and occurred seven years previously. A single overlooked request for trust accounts was insufficient to warrant removal, particularly as accounts were subsequently provided.

Allegations that trustees failed to act impartially between beneficiaries were dismissed. The court accepted that Nathan and Leah had received substantial benefits through their Millpledge remuneration, consistent with Graham's wishes. Their removal as directors, whilst contrary to the testator's original vision, was found to be a legitimate commercial decision not amounting to breach of trust.

The court rejected submissions that Paddy's dual role as trustee and company director created an irreconcilable conflict, noting Graham's will explicitly authorised such appointments. Claims regarding the occupation of trust property by Graham's former wife were similarly dismissed, the arrangements appearing legitimate and potentially conferring indirect benefit upon beneficiary Guy.

The decisive factor

What proved determinative was Paddy's witness statement describing the claimants as "entitled and greedy" with "deep-rooted greed" and "complacency". Whilst acknowledging these remarks followed provocative allegations and the sudden service of proceedings without warning, Deputy Master Holden concluded they demonstrated "outright hostility" giving rise to reasonable concerns about impartial trust administration.

The court accepted Paddy might struggle to exercise required objectivity, particularly when considering distribution requests from claimants he viewed as motivated by "deep-rooted greed". Malcolm, having explicitly agreed with Paddy's hostile remarks, was similarly removed.

Measured intervention

Significantly, the court declined to replace all four trustees. Sarah and Maldwyn exhibited no animus towards claimants, and their retention provided continuity whilst honouring Graham's wish for family representation from both sides. The court ordered appointment of a professional trustee to work alongside the continuing family trustees, providing independent oversight of Millpledge whilst preserving Graham's intended trustee composition.

The decision reinforces established principles that trustee removal remains an exceptional remedy focused on beneficiary welfare and proper trust administration, not punishment for misconduct. However, it demonstrates that expressed hostility threatening impartial administration may justify intervention even absent proven breach of duty.

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