We act as professional trustees in a trust with a lay trustee in a Will trust. Back in December, he mooted retiring and appointing someone in his place, but since has not responded to any correspondence I have sent him.
The Will contains no STEP provisions, only administrative provisions that do not contain any provisions related to appointing or removing trustees.
I think my only option therefore is to rely on the Trustee Act 1925 - I cannot rely on Saunders v Vautier to close the trust because the beneficiaries are minors.
I think I can rely on s36 - “(1)Where a trustee, …or refuses …to act” (as I would wager that not responding amounts to a refusal to act, particularly when he has not turned up to the past couple of annual meetings for one reason or another), but I am unsure for how long he has to not respond for. I am tempted to take the view of 12 months (due to the other reference in the same section about being outside of the UK). What are people’s thoughts or is there a leading case on what amounts to refusal to act?
I would be cautious about relying on six months’ silence alone as constituting a “refusal to act” under s.36 Trustee Act 1925. In my view, the section envisages a trustee who has positively declined, or whose conduct clearly demonstrates an unwillingness, to continue acting. Mere non-response to correspondence may not be sufficient, particularly if there is no evidence that the trustee has actually received the communications.
Before relying on s.36, I would be looking to exhaust reasonable attempts to make contact (recorded delivery, email, telephone, perhaps via family or other known contacts) and make it clear that, unless he responds by a specified date, you will proceed on the basis that he no longer wishes to act.
If there is still no engagement, and particularly if the trustee’s absence is preventing the administration of the trust, an application to the court under s.41 Trustee Act 1925 for the appointment of a replacement trustee may ultimately be the safer course if there is any doubt about whether s.36 applies.
Out of interest, is there any evidence that the trustee lacks capacity or is otherwise incapable of acting? Also, is the trust currently inactive, or are there decisions that genuinely require both trustees? Those facts may affect the most appropriate route.