Henry Richard Geers Cotterell OBE v The Right Honourable Wentworth Peter Ismay Fourth Viscount Allendale
| Jurisdiction | England & Wales |
| Judge | Chief Master Marsh |
| Judgment Date | 17 August 2020 |
| Neutral Citation | [2020] EWHC 2234 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: PT-2019-000853 |
| Date | 17 August 2020 |
[2020] EWHC 2234 (Ch)
Chief Master Marsh
Case No: PT-2019-000853
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
PROPERTY TRUSTS AND PROBATE LIST
Rolls Building, Fetter Lane,
London EC4A 1NL
Richard Dew (instructed by Withers LLP) for the Claimants
Hearing dates: 16 December 2019 and 17 July 2020
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.
The claimants are the trustees of the Allendale 1949 Settlement (“the Settlement”). The first defendant is the fourth (and current) Viscount Allendale and the second defendant is his son. I will describe the first defendant as “Lord Allendale” and his son (in the manner adopted in later deeds of appointment) as “Wenty”. They are both beneficiaries under the Settlement.
The trustees apply to the court for orders under section 57(1) of the Trustee Act 1925 (“section 57”), and under the court's inherent jurisdiction, to extend their powers. I am indebted to Mr Dew, who appeared for the trustees, for his full and helpful submissions.
Section 57(1) of the Trustee Act 1925 provides:
“Power of court to authorise dealings with trust property.
Where in the management or administration of any property vested in trustees, any sale, lease, mortgage, surrender, release, or other disposition, or any purchase, investment, acquisition, expenditure or other transaction, is in the opinion of the court expedient, but the same cannot be effected by reason of the absence of any power for that purpose vested in the trustees by the trust instrument, if any, or by law, the court may by order confer upon the trustees, either generally or in any particular instance, the necessary power for the purpose, on such terms, and subject to such provisions and conditions, if any, as the court may think fit and may direct in what manner any money authorised to be expended, and the costs of any transaction, are to be paid or borne as between capital and income.”
Section 57 enables the court to grant powers to trustees in connection with the management and administration of trust property. The principal considerations are that the court must be satisfied (a) the trustees lack the power they seek and (b) it is “expedient” to exercise the jurisdiction to make such an order. The court must also be satisfied that it should exercise its discretion to make the order.
The scope of section 57 has historically given rise to differing judicial views. On one view, the power could only be exercised where a specific “disposition” or “transaction” was contemplated that could not be undertaken due to the absence of the requisite power. The contrary view is that section 57 is not restricted in this way. I will first describe the Settlement and then deal with the issues that have arisen for determination.
The Settlement
The Settlement was created on 31 March 1949 by the second Viscount Allendale. It:
(1) Provided that the trust fund should be held upon trust for the person who at the termination of the appointed period would be the Viscount Allendale or (if the settlor were alive at that time) would be the Viscount Allendale if the settlor were dead, and so that an adult would take an absolute interest but an infant would take an entailed interest in tail male.
(2) Defined the appointed period as being the period beginning at the date of the settlement and expiring at the end of 70 years from that date or 21 years from the death of the survivor of the settlor's family then living, whichever should be the shorter. This period expired on 31 March 2019. The trust period therefore has more than 68 years remaining.
(3) Provided that during the appointed period the trustees should hold the income for the benefit of any one or more of the persons having contingent interests in the trust or being members of the settlor's family.
(4) Provided further that the trustees should also have the power during the appointed period to apply the whole or any part of the capital of the trust fund in their discretion for the benefit of all or any one or more of the persons having contingent interests in the trust fund.
By an Order made on the 15 February 1977 the Settlement was varied, pursuant to the Variation of Trusts Act 1958, so as to include various provisions, including a power to accumulate income and an extended power of appointment in favour of the male line of The Right Honourable Wentworth Canning First Viscount Allendale.
Clause 12 of the Settlement conferred various powers in the ‘management of real and leasehold and immoveable property’. There are other powers at Clause 13. In addition, the Order referred to above inserted a new Clause 12A and 13A. Clause 13A is in the following terms:
“The Trustees shall have power to appropriate partition or apportion any property for the time being forming part of the Trust Fund in or towards satisfaction of any share or interest in the Trust Fund or for any purpose in connection therewith in such manner as the Trustees shall in their absolute discretion (and without the necessity of obtaining any consent) consider just'”.
The Settlement also included a clause permitting remuneration, in the following terms:
“ANY trustee for the time being hereof being a solicitor or other person engaged in any profession or business shall be entitled to charge and be paid all usual professional or other charges for business done by him or his firm in relation to the trusts hereof and also his reasonable charges in addition to disbursements for all other work and business done and all time spent by him or his firm in connection with matters arising in relation to the trusts hereof including matters to which a trustee not being a solicitor or other professional person might have personally attended but to which such trustee might reasonably instruct a solicitor or other professional person to attend”.
The substantial assets now comprised in the Settlement are held in four funds: The W Fund, The I Fund, the D Fund and the U Fund. The appointments (or in the case of the I Fund the surrenders and releases) can be briefly summarised.
The W Fund
By a deed dated the 28 March 1977 (the “1977 Appointment”) the then trustees of the Settlement appointed a fund, described as “Wentworth's Fund” (and now known as the ‘W Fund’) upon trust for Lord Allendale for his life, with powers to enlarge his interest into an absolute interest and subject thereto for such all or such one or more exclusively of Lord Allendale's male issue and in such shares and with such trusts and powers and so on as Lord Allendale should by deed or deeds revocable or irrevocable or by will or codicil appoint.
There have been various appointments exercising the power referred to above. However, the governing appointment is now that contained in the deed dated 27 November 2012 made by the trustees and by which the trustees resolved, in exercise of the powers conferred by section 32 of the Trustee Act 1925 (as extended by the 1977 Appointment), that Lord Allendale is absolutely entitled to the W Fund provided always that the trustees might at any time or times during Lord Allendale's lifetime by deed wholly or partially revoke Lord Allendale's absolute entitlement or wholly or partially release the future exercise of that power.
The I Fund
The I Fund was created not by a single appointment, but by a series of surrenders and releases by which Lord Allendale gave up his life interest, and the trustees revoked their ability to appoint in his favour, in respect of various property at different times.
The governing appointment for those funds is the deed of release, revocation and advancement dated 19 October 2012. Under that deed:
(1) Wenty is entitled to the income of that fund until his death or the expiration of the Perpetuity Period.
(2) The trustees have power exercisable before his death or during the Perpetuity Period to appoint that the capital or income of the I Fund should be held on such trusts for the benefit of all or any one or more of the Beneficiaries in such manner as the trustees think fit.
(3) The trustees have power to pay or apply the whole or any part of the I Fund in which Wenty has an interest in possession for the time being to Wenty for his advancement or otherwise for his benefit in such manner as they shall in their discretion think fit.
The D Fund
By a deed dated 29 February 1984, the third Viscount Allendale, Lord Allendale's father, appointed the Dukesfield Estate onto trusts for Wenty in tail male. Further property was added to the D Fund by the Third Viscount of Allendale by deeds dated 31 March 1992 and 15 December 1997. Further assets from another fund (not relevant to this application) passed into the D Fund upon the death of the Third Viscount Allendale in 2002.
Income is payable to Wenty during his lifetime. Subject to Wenty's life interest, the D Fund will pass into Wenty's free estate on his death to be held in accordance with his will.
The U Fund
By a deed dated 19 October 2012, funds were appointed to the U Fund (prior to this the Fund had been known as the ‘Unappointed Fund’).
Pursuant to an appointment dated 19 October 2012, the Perpetuity Period applicable to this fund is now defined as 21 years from the death of the last survivor of all descendants of either the 2nd Viscount Allendale living in 1949 or members of the royal family living in 1949.
If the U Fund has not been completely distributed before...
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