David Michael James Brudenell-Bruce, Earl of Cardigan v John Moore and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Newey |
| Judgment Date | 07 November 2014 |
| Neutral Citation | [2014] EWHC 3679 (Ch) |
| Docket Number | Case No: HC12A03886 |
| Court | Chancery Division |
| Date | 07 November 2014 |
[2014] EWHC 3679 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Rolls Building, Royal Courts of Justice
7 Rolls Buildings, Fetter Lane
London, EC4A 1NL
Mr Justice Newey
Case No: HC12A03886
Mr Gilead Cooper QC and Mr James Weale (instructed by Berwin Leighton Paisner LLP) for the Claimant
The First Defendant appeared in person
Miss Clare Stanley and Mr Jack Watson (instructed by Clyde & Co LLP) for the Second Defendant
Hearing dates: 3, 4, 7–11, 14–16, 18 and 21 July 2014
Further written submissions: 17 and 19 October 2014
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This case concerns an estate ("the Estate") at Savernake Forest in Wiltshire that the family of the claimant, the Earl of Cardigan, has owned since soon after the Norman Conquest. The Estate is the subject of a trust established by a conveyance dated 29 September 1951 ("the Trust") of which Lord Cardigan is a beneficiary. In these proceedings, Lord Cardigan challenges the remuneration that the first and second defendants, respectively Mr John Moore and Mr Wilson Cotton, have received as the present trustees of the Trust and alleges a variety of other breaches of duty by them. He also seeks an order for the removal of Mr Moore and Mr Cotton ("the Trustees") as the trustees of the Estate.
The context
The family
Lord Cardigan is the son of the 8 th Marquess of Ailesbury, who is now in his 80s. A younger half-brother of the Marquess, Lord Charles Brudenell-Bruce, also features in events relevant to the proceedings before me. Lord Charles is a year or two older than Lord Cardigan, who is himself 61.
Lord Cardigan married in 1980, and the couple had two children, Viscount Savernake (who is now aged 32) and Lady Catherine Brudenell-Bruce (who is 29 years old). Lord Cardigan and his first wife were, however, divorced in March 2009, and his first wife died of cancer on 4 July 2012.
Lord Cardigan re-married in 2011, and a year or so ago he became a father for the third time.
The Estate
The Estate includes a number of houses. Much the largest of them is Tottenham House, which was largely rebuilt in the 1820s for the 1 st Marquess of Ailesbury. The family lived in the property until the Second World War, but in 1946 it was let for use as a preparatory school before being used by a charity called the Amber Foundation. Since about 2005, the house has lain empty, except that a Ms Prue Chetwynd-Talbot was employed as a caretaker for a period.
There is a large stable block adjacent to Tottenham House and a gardener's cottage nearby. Like Tottenham House, the gardener's cottage is at present unoccupied.
The next largest properties on the Estate are (in order of approximate value) Savernake Lodge (where Lord Cardigan is living), Sturmy House (which is vacant) and Little Lye Hill Cottage (which is occupied by Lord Charles Brudenell-Bruce and his wife). Ten or so smaller residential properties are also still comprised within the Estate, as are an estate office and yard.
As well as buildings, the Estate includes about 3,950 acres of woodland and agricultural land. Much of this has, however, been leased to the Forestry Commission since 1939.
The Estate was rather larger in the past. Over the years, parts of the Estate have been sold off. In recent times, properties known as Morleigh Cottage, Leigh Hill Cottage and Luton Lye House have been sold (in the latter part of 2009 and early 2010) to reduce bank borrowings and Leigh Hill House was transferred to Lord Cardigan's first wife pursuant to a divorce settlement.
The trusts
At the end of the 1940s, the Estate was held by a company owned by Lord Cardigan's father (later to become the 8 th Marquess of Ailesbury) and grandfather (the 7 th Marquess). The former was beneficially entitled to 49% of the shares and the latter to the remaining 51%.
Between 1949 and 1951, the company was replaced by a partnership. The company was put into members' voluntary liquidation, and it was resolved that its assets should be divided between its members in specie. On 29 September 1951, the 7 th and 8 th Marquesses entered into a partnership agreement under which, it appears, the 7 th Marquess was to have a 51% share and the 8 th Marquess a 49% share (as had been the case with the company). On the same day, the Estate was conveyed by deed to the 7 th and 8 th Marquesses to be held on trust for sale as part of their partnership property.
By the early 1960s, there had been a generational shift. An agreement dated 9 July 1963 provided that the partnership was in future to be carried on by (a) the 8 th Marquess and (b) trustees for Lord Cardigan. The 8 th Marquess now had a 51% share, while his son's trustees had a 49% share.
In 1987 there was another generational shift. The 49% partnership share which had been held on trust for Lord Cardigan was appointed to him absolutely on 22 May 1987. At the same time, the 8 th Marquess assigned assets including his 51% share in the partnership to a Mr David Shorey (a solicitor) and a Mr Brian Butler on trusts for Lord Cardigan's children ("the Children's Trust"). An agreement of the same date provided that the partnership was henceforth to be carried on by Lord Cardigan on the one hand and the trustees of the new trust on the other. The assets of the partnership were stated to belong as to 49% to Lord Cardigan and 51% to the trustees of the Children's Trust. Lord Cardigan replaced Mr Butler as a trustee of the trusts affecting the Estate.
The Children's Trust contains a power to make appointments in favour of Viscount Savernake and Lady Catherine Brudenell-Bruce. Had Lord Cardigan had other children before 27 May 2011, they would also have become potential beneficiaries, but in the event the class closed on that date. Viscount Savernake stands to become absolutely entitled to the trust property on attaining the age of 40 years.
In 1994, Mr Butler retired as a trustee of the Children's Trust, and Lord Cardigan was appointed in his place. As a result, Lord Cardigan and Mr Shorey became the only trustees of both the Children's Trust and the trusts affecting the Estate. A new partnership agreement was entered into reflecting the change of trustee. The agreement stated that the partnership was now to be carried on by, on the one hand, Lord Cardigan and, on the other, Mr Shorey and Lord Cardigan as trustees of the Children's Trust.
In 2003, Mr Shorey retired as a trustee of the Estate and the Children's Trust. He was replaced as a trustee by a Mr Richard Ford, a partner in the firm of solicitors that has become Thrings (formerly Thring Townsend).
In 2007, Mr Ford instituted proceedings in which he alleged that Lord Cardigan had been guilty of breach of trust and sought his removal as a trustee. Lord Cardigan denied the allegations against him.
The proceedings were compromised on the basis of an agreement set out in the schedule to a Tomlin order made by Kitchin J on 21 October 2008. The agreement provided for Mr Moore and Mr Cotton to replace Lord Cardigan and Mr Ford as trustees of the Estate, and for Mr Cotton also to take over from Lord Cardigan as a trustee of the Children's Trust. Mr Moore and Mr Cotton were thus to be the only trustees of the trusts affecting the Estate, and Mr Ford and Mr Cotton the only trustees of the Children's Trust.
Two deeds of retirement and appointment of trustees were executed on 3 November 2008. One related to the Children's Trust, the other to the Estate.
The Trustees
Mr Moore is the senior clerk and practice manager in the chambers of Mr John Gardiner QC in Lincoln's Inn. After leaving school, he took Part I of the Bar exams before joining a company called Air Express International. He became a barristers' clerk in about 1987 at Mr Gardiner's suggestion.
Mr Moore and Lord Cardigan met 30 or more years ago when the latter joined the local branch of the Conservative Party, of which Mr Moore was then the chairman. The two became close friends.
Mr Moore and his wife live in Savernake Forest, on the fringes of the Estate.
Mr Cotton is a chartered accountant and a partner in Smith & Williamson LLP. He has specialised in trusts and estates since 1981 and has acted as a trustee or executor since about 1988. On a number of occasions, he has been appointed as a trustee by the Courts. He was a founding member of the Society of Trust and Estate Practitioners ("STEP") and served for many years on its council.
Management of the Estate before Mr Moore and Mr Cotton were appointed as trustees
After leaving school, Lord Cardigan attended the Royal Agricultural College in Cirencester and then took over the management of the Estate, a role that he performed for more than 30 years. In August 2005, however, Lord Cardigan went to the United States, and he spent relatively little time in this country between then and 2011. Except for a period in 2006 (when he lived close to the Estate), he was mainly in either the United States or the British Virgin Islands. During at least some of this period, he was receiving therapy. To his obvious distress, his then wife instituted divorce proceedings in 2006.
Lord Cardigan first approached Mr Moore in May 2007 about the possibility of his becoming a trustee. Although Mr Ford did not issue the proceedings for his removal as a trustee until December 2007, Lord Cardigan told Mr Moore in an email that relations with Mr Ford had "utterly collapsed, and irrevocably". Lord Cardigan went on:
"You will...
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