Appointing a New Trustee in United Kingdom and Ireland Law: Statutory Powers, Judicial Principles, and Contemporary Issues

Appointing a New Trustee in United Kingdom and Ireland Law: Statutory Powers, Judicial Principles, and Contemporary Issues

1. Introduction

The orderly succession of trustees is indispensable to the sound administration of private, charitable, and commercial trusts. United Kingdom and Irish law provide overlapping statutory mechanisms and equitable principles enabling the appointment of new or additional trustees when circumstances demand. This article analyses the key statutory provisions, leading authorities, and emerging procedural themes, with particular reference to the judicial guidance flowing from Letterstedt v Broers[1], National Westminster Bank Plc v Lucas[2], and recent English and Irish High Court jurisprudence. It further examines how the courts balance settlor intent, beneficiary welfare, and fiduciary accountability when exercising an overriding jurisdiction to appoint or remove trustees.

2. Statutory Framework

2.1 England and Wales

  • Trustee Act 1925
    • Section 36: extra-judicial replacement where a trustee is dead, remains abroad for more than twelve months, desires to be discharged, is unfit, or is incapable.
    • Section 41: judicial power to appoint a new trustee “whenever it is expedient to appoint a new trustee and it is found inexpedient, difficult or impracticable to do so without the assistance of the court.”
  • Administration of Justice Act 1985 s. 50: confers on the High Court an analogous power over personal representatives; modern decisions treat the welfare-based criteria in s. 50 decisions as instructive when exercising s. 41 powers.[3]
  • Trusts of Land and Appointment of Trustees Act 1996 (TOLATA) s. 19: empowers beneficiaries (if of full age and absolutely entitled) to compel retirement and appointment without court intervention.

2.2 Scotland

The Trusts (Scotland) Act 1921 s. 3(b) allows assumption or appointment of new trustees by existing trustees or by the court where necessary, complemented by the equitable principles articulated in Abel v Watt[4].

2.3 Ireland

  • Trustee Act 1893
    • Section 25: confers a plenary jurisdiction on the High Court to appoint a new trustee “either in substitution for or in addition to any existing trustee … or although there is no existing trustee.”[5]
    • Section 26: enables vesting orders to perfect title where a trustee cannot be found.
  • Land and Conveyancing Law Reform Act 2009 (Ireland) ss. 14–17 modernise certain aspects but do not displace the court’s core authority under the 1893 Act.

3. Judicial Principles Governing Court Appointment

3.1 The Welfare of Beneficiaries and Preservation of Trust Property

The seminal Privy Council decision in Letterstedt v Broers established that the “main guide” for the court is “the welfare of the beneficiaries” and the need to avoid jeopardising the trust property. Modern English decisions—such as Chief Master Marsh’s synthesis in Hanspaul & Ors v Wearing[6]—translate this into a pragmatic inquiry:

  • Is the administration functioning effectively?
  • Has any conflict, hostility, or misconduct materially endangered the estate?
  • Will the proposed appointment promote efficient future administration?

3.2 No Necessity for Proved Wrongdoing

While serious misconduct virtually guarantees removal, the courts have repeatedly emphasised that fault is not a pre-condition. In National Westminster Bank Plc v Lucas the High Court declined to remove an institutional executor despite controversy, holding that absence of misconduct and the pragmatic advantages of the proposed settlement scheme justified retaining the incumbent.[2]

3.3 Respect for Settlor Autonomy and Beneficiary Views

The settlor’s express choice of trustee remains a relevant factor, yet it is not paramount. Beneficiary preferences likewise inform but do not dictate the outcome. In James v Louisewilliams the Chancery Division reiterated that beneficiaries cannot “arrogate to themselves” the power to appoint new trustees merely because of dissatisfaction.[7]

3.4 Expediency, Difficulty, or Impracticability

Section 41 of the 1925 Act and Section 25 of the 1893 Act both employ this tripartite test. The courts adopt a purposive approach, focusing on whether the statutory conditions are met in substance. Thus, in Barr Na Farraige Owners Management Co Ltd the Irish High Court found it “inexpedient” to achieve trustee succession without judicial assistance owing to development-stage complexities.[5]

4. Analysis of Selected Authorities

4.1 Hanspaul & Anor v Ward (2016) and Structured Case Management

Newey J’s directions order illustrates the practical difficulty of reaching consensus on successor trustees in hostile litigation. The court’s willingness to invite the President of the Law Society to nominate independent professionals underscores the judiciary’s commitment to neutrality and expertise when private selection mechanisms fail.[8]

4.2 National Westminster Bank PLC v Ludlow Trust Co Ltd (2023): Confidentiality and Open Justice

Trower J sanctioned a mass-replacement of trustees across multiple settlements, sitting in private under CPR 39.2(3)(f). The judgment confirms that trust appointments may warrant confidentiality where the issues are “uncontentious and technical,” yet the resulting order remains public.[9]

4.3 Express Trust Powers and Corporate Pension Schemes

Atherton v British Insulated and Helsby Cables demonstrates how a trust instrument can channel appointment power to corporate actors (directors or staff trustees) and prescribe eligibility criteria (e.g., continuing directorship). Courts will generally respect such bespoke machinery unless its operation becomes impracticable.[10]

4.4 Intersection with Proprietary and Insolvency Claims

Although Independent Trustee Services Ltd v GP Noble is primarily a tracing case, it highlights that appointment or substitution of trustees may become necessary when fraud unravels existing fiduciary structures. On insolvency, Donaldson v O'Sullivan confirms that orders removing a bankruptcy trustee must derive from substantive statutory authority, illustrating the distinction between procedural rules and primary legislative power.[11]

5. Procedural Considerations

5.1 Evidence of Suitability

The Irish High Court’s practice note in W v M. requires an affidavit of suitability by any proposed trustee, a safeguard increasingly echoed in English proceedings to pre-empt objections on competence or independence.[12]

5.2 Costs and Indemnity

Unless there is misconduct, the costs of a change of trustees are ordinarily borne out of the trust fund. In Ludlow Trust the parties deliberately contracted for the incoming trustee to absorb costs, evidencing commercial flexibility.[9]

5.3 Standing

Only trustees or beneficiaries possess locus under s. 41 of the 1925 Act, a point confirmed in Davidson v Seelig (Henderson J).[13] Creditors or protectors must therefore invoke alternative powers (e.g., s. 50 AJA 1985 or derivative beneficiary applications) to influence trustee succession.

6. Comparative Reflections: England & Wales, Scotland, and Ireland

While the core equitable principles are homologous across jurisdictions, notable distinctions persist:

  • Irish courts continue to rely on Victorian legislation (1893 Act) yet exhibit a modern, welfare-oriented approach akin to English case law.
  • Scottish sequestration jurisprudence such as Drybrough Co v Macdonald[14] illustrates a creditor-centric revival of trusteeships in bankruptcy, contrasting with England’s reliance on the Insolvency Act 1986 for official appointments.
  • England’s TOLATA s. 19 uniquely empowers beneficiaries to bypass the court entirely where unanimity exists.

7. Conclusion

The appointment of new trustees sits at the confluence of statutory prescription and equitable discretion. Contemporary case law confirms that courts in the United Kingdom and Ireland remain guided by beneficiary welfare, efficiency of administration, and fidelity to settlor intention. Yet they also exhibit pragmatic flexibility—embracing professional, institutional, or court-nominated trustees where interpersonal hostility, complexity, or conflict renders traditional appointment machinery unworkable. Practitioners seeking judicial intervention must therefore marshal clear evidence of expediency or impracticability, demonstrate the suitability of proposed appointees, and anticipate cost consequences. As trust assets and governance structures grow more sophisticated, the principled yet adaptable jurisprudence canvassed herein will continue to evolve, ensuring fiduciary stewardship remains responsive to modern commercial and familial realities.

Footnotes

  1. Letterstedt v Broers (1884) UKPC 1.
  2. National Westminster Bank Plc v Lucas & Ors [2014] EWHC 653 (Ch).
  3. Administration of Justice Act 1985, s. 50; applied in Hanspaul & Ors v Wearing [2023] EWHC (Ch).
  4. Abel v Watt (1883) 11 R 149 (Ct Sess).
  5. Barr Na Farraige Owners Management Company Ltd v The Trustee Act 1893 (High Court of Ireland, 2021).
  6. Hanspaul & Ors v Wearing & Ors [2023] EWHC (Ch).
  7. James & Anor v Louisewilliams & Ors [2015] EWHC (Ch).
  8. Hanspaul & Anor v Ward & Ors [2016] EWHC (Ch).
  9. National Westminster Bank PLC & Ors v Ludlow Trust Company Ltd & Ors [2023] EWHC (Ch).
  10. Atherton (H M Inspector of Taxes) v British Insulated and Helsby Cables Ltd [1925] AC 205 (HL).
  11. Donaldson v O'Sullivan [2008] EWCA Civ 1146; cf. [2008] EWHC 387 (Ch).
  12. W. v M. (APUM) [2011] IEHC (High Court of Ireland).
  13. Davidson & Anor v Seelig & Ors [2016] EWHC 549 (Ch) at [57].
  14. Drybrough Co. v Macdonald (1893) Ct Sess.