Key Facts
- •Safe Hands Plans Limited (SHPL), a pre-arranged funeral plan provider, entered administration.
- •Significant shortfall existed between trust funds and amounts needed for plan holders' funerals.
- •Administrators arranged for Dignity Funerals Limited to provide funerals, conditionally upon court approval.
- •Approximately 416 funerals were provided under this agreement, costing £615,629.65.
- •The key issue was whether the trust deed allowed using trust funds for funeral payments instead of pari passu distribution.
Legal Principles
Construction of trust deed to determine whether administrators had power to use trust funds for funeral expenses.
Trust Deed dated 6 May 2020
Court's power to approve or sanction trustees' actions, including whether actions are within their powers or a proper exercise of powers.
The Public Trustee and another v Paul Cooper [2001] WTLR 901
Principles of equitable relief as per In re Berkeley Applegate (Investment Consultants) Ltd (In Liquidation) 1 Ch 32.
In re Berkeley Applegate (Investment Consultants) Ltd (In Liquidation) 1 Ch 32
Pari passu distribution principle in insolvent trusts.
Equity Trust (Jersey) Ltd v Halabi [2022] UKPC
Contractual interpretation principles.
Arnold v Britton and others [2015] UKSC 36, [2015] AC 1619
Outcomes
The court approved the use of trust funds to pay Dignity Funerals Limited for the provided funeral services.
The court held that the trust deed allowed the administrators to use the funds under the discretionary power of appointment (Clause 4.8) even in insolvency, to ensure that funerals took place, despite the insolvency provision (Clause 4.6) requiring pari passu distribution. The court considered that the administrators acted reasonably and in the best interests of the beneficiaries given the circumstances.