It is common for enquiries to be made of us, where trustees have failed to keep adequate records during their period of acting as trustee. It is essential that all payments of trust property are properly documented and accounts maintained.
The decision in the case of Henchley and others v Thompson [2017] EWHC 225 (Ch) (16 February 2017) highlights this fact.
Henchley and others v Thompson
Case details
The High Court has ordered the defendant to provide an account to the beneficiaries of his dealings with a Trust of which he had been a trustee (or de facto trustee) up to the early 1990’s. It had previously been assumed by most practitioners that an order requiring a trustee to account for payments made had to be made, due to the operation of the Limitation Act 1980, within six years of the date of the cause of action accruing. In that case, the Court drew a distinction between an account based on wilful default, as opposed to an account in common form.
The Court observed that an application for an account in common form was not based on a breach of Trust and had never been regarded as being contingent on any adverse finding against a trustee. Subject to the Court’s discretion, the order was essentially administrative, arising from the Court’s supervisory jurisdiction and accordingly the Limitation Act did not apply.
The decision serves as a reminder for trustees that the duty to account to beneficiaries is a core duty and can still be relevant after many years. Whilst it is acceptable for the trustees to delegate record keeping responsibilities amongst themselves, this does not absolve them collectively of their duties to beneficiaries.
How can Nelsons help?
Kevin Modiri is a Partner in our Dispute Resolution team, specialising in inheritance dispute claims.
If you have any queries regarding the points discussed in this article, please get in touch with Kevin or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.