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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Harvey & Anor v Van Hoorn [2023] EWHC 1298 (Ch) (31 May 2023) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2023/1298.html Cite as: [2023] WLR(D) 256, [2023] 3 WLR 447, [2023] EWHC 1298 (Ch), [2023] Ch 500 |
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BUSINESS AND PROPERTY COURTS IN BRISTOL
PROPERTY TRUSTS AND PROBATE LIST (ChD)
2 Redcliff Street, Bristol, BS1 6GR |
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B e f o r e :
(sitting as a Judge of the High Court)
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(1) SUSAN MARY ![]() (2) ![]() ![]() | Claimants |
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- and - |
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PAMELA ![]() ![]() ![]() |
Defendant |
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Michael Clarke (instructed by GA Solicitors) for the Defendant
Hearing date: 15 December 2022
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Crown Copyright ©
HHJ Paul Matthews :
Introduction
The settlement
"5(a) THE Trustees shall hold the Trust Fund and the income thereof upon such trusts in favour or for the benefit of all or such one or more of the Appointed Class exclusive of the other or others of them and with and subject to such powers and provisions for their respective maintenance education or other benefit or for the accumulation of income (including if thought fit administrative powers and provisions) and including also discretionary trusts and powers to be executed or exercised by any persons or person whether or not being or including the Trustees or any of them and so that the exercise of this power of appointment may be delegated to any extent and if more than one in such shares or proportions and in such manner generally as the Trustees (subject to the application (if any) of the rule against perpetuities) by any deed or deeds revocable not later than the Perpetuity Date or irrevocable and executed not later than the Perpetuity Date shall with the written consent of the Settlor during the Settlor's lifetime but otherwise in their absolute discretion appoint PROVIDED ALWAYS that no exercise of the foregoing power shall invalidate any prior payment or application of the Trust Fund all the income thereof or any part or parts thereof made under any other power or powers conferred by this Settlement or by law".
" 'the perpetuity date' shall mean the earlier of
(i) the last day of the period of 80 years from the date of this Settlement which period of 80 years (instead of any other) shall be the perpetuity period applicable hereto
(ii) such date as the Trustees shall by deed specify (not being a date earlier than the date of execution of such deed)".
" 'the Appointed Class' shall mean the following objects and persons (whether now living or born hereafter but before the Perpetuity Date)
(i) the children and remote issue of the Settlor's parents (including the Settlor)
(ii) the spouses widows and widowers (whether or not such widows or widowers shall have remarried) of the persons in subclause above
(iii) such other objects or persons as are added in pursuance of the power to that effect conferred by clause 3".
The reference to "the power … conferred by clause 3" is one to a power contained in that clause of the settlement to add or remove persons from the Appointed Class. I was told that this power has not been exercised.
The objects of the power
"any person having, directly or indirectly, an interest, whether vested or contingent, under the trusts who by reason of infancy or other incapacity is incapable of assenting".
The question which arises in this case is whether the minor objects of the (mere, though fiduciary) power of appointment contained in clause 5 fall within the scope of section 1(1)(a). In particular, the question is whether such an object has an "interest … under the trusts".
Construction and context
Trusts and powers
"Either [type of object] has the negative power to block a family arrangement or similar transaction proposed to be effected under the rule in Sanders v Vautier (1841) 4 Beav 115 … "
The impact of the rule in Saunders v Vautier
"the whole of this share is now held by the trustees upon trusts under which they are bound to apply the whole income and eventually pay over or apply the whole capital to Mrs. Aspinall and the three children or some or one of them. So far as the income is concerned they are obliged to pay it or apply it for her benefit or to pay it or apply it for the benefit of the children. So far as regards the capital they have a discretion to pay it and to apply it for her benefit and, subject to that, they must hold it upon trust for the children. Mrs. Aspinall, the two surviving children and the representatives of the deceased child are between them entitled to the whole fund."
"It has been laid down by the Court of Appeal in the case to which I have referred that, in such a case as that you treat all the people put together just as though they formed one person, for whose benefit the trustees were directed to apply the whole of a particular fund."
Accordingly (at 920), he made
"a declaration that, in the events which have happened, the plaintiff is bound to pay the whole of the income of the one-fourth to the defendant society during the lifetime of Mrs. Aspinall, or until the mortgage is discharged."
"It is quite true that in one sense the objects of a discretionary trust have an interest in the fund which is being administered for their benefit. It is so far true that if the whole of the fund is applicable for their benefit, and they are of full age, they are together entitled to put an end to the discretionary trust … "
On the other hand, it is right to say that the judge in that case also considered that such an object did not have an interest within section 32, proviso (c), of the Trustee Act 1925, essentially because he did not think a settlor creating a discretionary trust would intend to fetter the statutory power of advancement by requiring the prior consent of all the objects. So, in his view, the consent of such objects was not needed to an advance under that section of the 1925 Act
Other remedies
"51. … The right to seek the court's intervention does not depend on entitlement to a fixed and transmissible beneficial interest. The object of a discretion (including a mere power) may also be entitled to protection from a court of equity, although the circumstances in which he may seek protection, and the nature of the protection he may expect to obtain, will depend on the court's discretion … "
" … In our view, a discretionary beneficiary, whether as an object of a discretionary trust or of a fiduciary power, can invoke the court's jurisdiction to seek the proper administration of the trust and the relief claimed can be the reconstitution of the trust …"
"Interest" in the 1958 Act
"It is constantly assumed in practice that a minor beneficiary (or adult beneficiary lacking mental capacity) of a discretionary trust … has a sufficient interest within the section to enable the court to consent on his behalf".
"29. … It is not in dispute that the 1958 Act authorises the court to give its approval on behalf of beneficiaries of a discretionary trust, notwithstanding that they have no fixed proprietary entitlement but only a right to be considered. That section 1(1)(a) extends to such an interest is confirmed by the fact that section 1(1)(d) applies to 'any person in respect of any discretionary interest of his under protective trusts where the interest of the principal beneficiary has not failed or determined'. It would be perverse if the Act extended to the beneficiaries of a discretionary trust under protective trusts where the interest to the principal beneficiary had not yet failed or determined, but not to those beneficiaries where the principal beneficiary's interest had failed or determined."
Conclusion