Nigel Fox & Anor v Marcus Nathan Bent & Ors
[2024] EWHC 2179 (Ch)
Susan Mary Harvey & Anor v Pamela Van Hoorn
31 May 2023
[2023] EWHC 1298 (Ch)
High Court
A family wanted to change their trust to avoid paying taxes. The trust had some money set aside for grandkids, some of whom are still children. The court had to decide if it could approve the changes on behalf of the kids. The judge said yes, because even though the kids don't own the money yet, they still have rights related to it.
Key Facts
- •CPR Part 8 Claim for an order under the Variation of Trusts Act 1958 to approve an arrangement for minors and unborns.
- •Settlement made in 1989 by non-UK resident settlor and trustees; claimants are now the only trustees and are UK resident.
- •Arrangement aims to prevent capital gains tax consequences for the second claimant.
- •Settlement includes an overriding power of appointment (clause 5) and trusts in default of appointment (clause 6).
- •Question of court jurisdiction to approve the arrangement on behalf of minor and unborn objects of the power of appointment.
- •Adult objects consented, but court consent needed for minors and unborns.
Legal Principles
In construing a statute, context is all important.
Argentum Exploration Ltd v The Silver [2023] 2 WLR 209, [92]
Whether the object of a fiduciary power has an 'interest' depends on the statutory context.
Melville v IRC [2000] STC 628; [2002] 1 WLR 407
Objects of a discretionary trust can combine to effectively dispose of the trust fund (Saunders v Vautier).
Re Nelson [1928] Ch 920n; Re Smith [1928] Ch 915
Objects of a power, whether trust or mere, have standing to apply to the court to remove a trustee.
Re Manisty’s Settlement [1974] Ch 17, 25; Mettoy Pensions Trustees Ltd v Evans [1990] 1 WLR 1587
The object of a mere (fiduciary) power has an interest in the trust assets, though not a vested right to possession or enjoyment.
Lewin on Trusts (20th ed 2020), [42-073]
Section 1(1)(a) of the Variation of Trusts Act 1958 allows court approval on behalf of any person with an interest under the trusts who is incapable of assenting due to infancy or incapacity.
Variation of Trusts Act 1958, s.1(1)(a)
Section 1(1)(c) of the Variation of Trusts Act 1958 allows court approval on behalf of any person unborn.
Variation of Trusts Act 1958, s.1(1)(c)
'Interest' in the Variation of Trusts Act 1958 is not confined to legal or equitable interests in assets.
Bernstein v Jacobson [2008] EWHC 3454 (Ch), [29]
Outcomes
The court had jurisdiction to approve the arrangement on behalf of the minor objects of the mere power.
The objects of a mere fiduciary power have a sufficient 'interest' under the trusts within the meaning of section 1(1)(a) of the Variation of Trusts Act 1958, even without a vested right to trust assets. This interest includes rights to seek disclosure, prevent breaches of trust, and seek redress.