National Westminster Bank PLC & Ors v Ludlow Trust Company Limited & Ors
[2023] EWHC 2532 (Ch)
John Michael Wythe & Ors v Andrea Zavos
1 November 2024
[2024] EWHC 2784 (Ch)
High Court
The Portman Estate's managers wanted to reorganize their assets, transferring them into a single company. They asked the court for permission because it was a big change. The court checked that everyone who mattered agreed, that they'd got good advice, and the plan made sense for everyone involved. The court said yes, with a small adjustment to fix a technical problem in the rules.
Key Facts
- •The Portman Estate trustees sought court approval for a restructuring involving the transfer of partnership assets into a single limited company.
- •The restructuring involved 10 funds of the Portman Estate.
- •All principal living beneficiaries consented to the proposal.
- •A representative was appointed for unborn beneficiaries and supported the proposal.
- •A potential conflict of duty existed among trustees owing to their roles in multiple funds.
- •One fund lacked explicit power to participate; the trustees sought to remedy this using s.57 of the Trustee Act 1925.
- •The restructuring aimed to provide greater flexibility in profit distribution, preserve the estate's integrity, and offer commercial benefits.
Legal Principles
Court's supervisory jurisdiction to approve trustees' decisions, particularly momentous ones, even if within their powers.
The Public Trustee v Cooper [2001] W.T.L.R. 901 at p.923
Trustees' duty to act in the best interests of all beneficiaries, including unborn beneficiaries.
Implicit in the judgment
Section 57 of the Trustee Act 1925 allows the court to confer necessary powers on trustees if expedient and the powers are absent from the trust instrument.
Lewin on Trusts (20th ed) at 52-010, citing Re Thomas [1930] 1 Ch 194
Court's approval of trustee decisions depends on the principles of res judicata and abuse of process, not immunity.
Denaxe Ltd v Cooper [2024] Ch 65
On an application for court blessing, the court assesses whether the decision is one a reasonable body of trustees could have made and whether it's vitiated by conflict of interest.
Public Trustee v Cooper at pp. 925-6 and Cotton v Earl of Cardigan [2014] EWCA Civ 1312; [2015] WTLR 39 at [12]
Outcomes
Court approved the trustees' decision to restructure the Portman Estate.
The court found the decision to be rational, made with appropriate advice and consultation, and in the best interests of all beneficiaries.
Court granted relief under s.57 of the Trustee Act 1925 to one fund to enable its participation in the restructuring.
It was deemed expedient to grant the power, aligning the fund's powers with the others and fulfilling the wishes of all major beneficiaries.
Similar Cases
Folds Farm Trustees Limited & Anor v Oliver Alister Sydney Cutts & Ors
[2024] EWHC 12 (Ch)
The Serious Fraud Office & Ors. v Litigation Capital Limited & Ors.
[2022] EWHC 3053 (Comm)
Susan Mary Harvey & Anor v Pamela Van Hoorn
[2023] EWHC 1298 (Ch)
Coutts & Co & Anor v Ludlow Trust Company Limited
[2023] EWHC 2545 (Ch)