When trustee relationships break down: Lessons from Smith v Campbell

The recent High Court decision in Smith v Campbell [2025] EWHC 3011 (Ch) underscores that where relations between trustees have deteriorated to the point of hostility, creating a reasonable concern that the trust may not be administered in the best interests of all beneficiaries, the removal of trustees may be justified. The judgment reinforces the critical importance of trustee impartiality, constructive engagement with beneficiaries, and the effective administration of trusts.

The case in brief

This case concerned an application to remove four trustees following a dispute over the administration of a trust created under the Will of Graham Cheslyn‑Curtis, founder of the Millpledge Group, a veterinary supply company. Under his 2016 Will, Graham established a 125‑year discretionary trust for the benefit of his son, Guy; his partner, Suzanne (the First Claimant); and his two stepchildren, Nathan and Leah (the Second and Third Claimants).

The Defendants were Paddy and Malcolm, Graham’s trusted business advisers; and two family members (Graham's sister and his partner's brother). Together they were the four trustees of the Trust.

In his letter of wishes, Graham made clear his intention that the Company should continue operating and that Paddy and Malcolm should guide Nathan and Leah in assuming their responsibilities as directors. Following Graham’s death, relations between the Trustees broke down irretrievably, culminating in the dismissal of Nathan and Leah from their employment with the company.

The Claimants sought the removal and replacement of the Trustees on the basis that they had breached their duties. Their allegations were grouped into six core grounds:

1. Failure to notify the Claimants of their status as beneficiaries of the Trust;
2. Failure to keep proper Trust accounts or provide them on request;
3. Failure to administer the Trust fairly and impartially;
4. Failure to exercise independent oversight of the Company;
5. Breach of trust by permitting a non‑beneficiary to occupy trust property;
6. A complete breakdown in relations resulting in a loss of trust and confidence in the Trustees.

The Court's findings

The Court first considered its statutory jurisdiction under section 41 of the Trustee Act 1925, which empowers it to appoint new trustees and, where appropriate, replace existing ones. It also recognised its inherent jurisdiction to supervise the administration of trusts, including the power to remove trustees where necessary to protect the beneficiaries’ interests. The central test to be applied is whether the removal or replacement of any trustee would serve the best interests of the beneficiaries as a whole, with a view to ensuring the proper and effective administration of the trust.

The judge considered each of the six grounds advanced by the Claimants and determined that the first five did not, either individually or collectively, justify removal. However, the sixth ground (the serious and ongoing breakdown in relations between the Claimants and the Trustees), combined with clear evidence of Paddy’s hostility towards the Claimants, was held to warrant his removal. In turn, Malcolm was also removed, having endorsed hostile remarks made by Paddy in his first witness statement.

To secure the proper administration of the Trust going forward, the judge ordered the appointment of a professional trustee to act alongside the two remaining family trustees. This solution addressed concerns regarding the adequacy of oversight of the Company, while also reflecting Graham’s expressed wish that the trustee body comprise both family members and professionals.

Key lessons for charities and legacy officers

The following points may be of interest:

• The court will only remove or replace trustees if doing so is in the best interests of all beneficiaries and supports the effective running of the trust. Friction or disagreement alone is not enough.

• The fact that the trustees were chosen by the person who created the trust is a relevant consideration for the court. In particular, the court may take into account the trustees’ experience and the testator’s intention that family members be included in the trust. However, these factors do not detract from the court’s primary focus, which remains the welfare of the beneficiaries and the proper administration of the trust.

• Trustees must act impartially and avoid entrenched positions. Demonstrated hostility, whether between trustees or towards beneficiaries, can put the trust’s administration at risk and ultimately result in removal.

• Statements made during litigation, such as the inflammatory witness statement in this case, can evidence partiality and undermine a trustee’s suitability. Professionalism and neutrality must be maintained at all times.

• Disputes about company management rarely justify trustee removal. For example, allegations that trustees mishandled the process of removing company directors will not, without more, support their removal.

Full judgment: Smith & others v Campbell & others [2025] EWHC 3011 (Ch)

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