The court considered the Rule in Hastings-Bass, and specifically (1) whether the trustee’s decision is open to challenge when the failure to take a consideration into account is not attributable to a breach of fiduciary duty on the part of the trustee; and (2) whether, where a decision is open to challenge on the ground that the trustee failed to take a factor into account, the decision is void or voidable. The trustees had exercised their power of appointment, but on the basis of mistaken information.
Held: The appointment was voidable and not void. As to the rule in Hastings Bass: ‘A successful challenge made to a decision under the rule should in principle result in the decision being held voidable and not void.’
Lightman J identified three important differences between the duties owed by trustees and by those making a public law decision, as the discretionary nature of relief on judicial review, a different approach to nullity, and strict time limits.
The Hon Mr Justice Lightman
[2003] EWHC 114 (Ch), Gazette 03-Apr-2003, [2003] WTLR 149, [2003] 2 WLR 1362, [2003] 1 All ER 763, [2003] Ch 409
Bailii
England and Wales
Citing:
Cited – Re Hastings-Bass; Hastings v Inland Revenue CA 14-Mar-1974
Trustees of a settlement had exercised their power of advancement under the section, in order to save estate duty by transferring investments to be held on the trusts of a later settlement. However the actual effect of the advancement was that the . .
Cited – Anker-Petersen v Christensen ChD 2002
Where a mistake is made as to the effect of an appointment under a trust it may be possible to invoke the court’s jurisdiction to rescind the appointment. Davis J considered Millett J’s distinction between ‘effect’ and ‘consequences’: ‘An example in . .
Cited – Edge and others v Pensions Ombudsman and Another CA 29-Jul-1999
The Pensions Ombudsman was wrong to set aside the decision of pensions trustees where that decision was properly made within the scope of a discretion given to the Trustees. He should not carry out an investigation where no particular benefit could . .
Cited – Mettoy Pension Trustees v Evans ChD 1990
Where a trustee acts under a discretion given to him by the terms of the trust the court will interfere with his action if it is clear that he would not have so acted as he did had he not failed to take into account considerations which he ought to . .
Cited – Gibbon v Mitchell ChD 1990
G executed a deed surrendering his life interest in a trust fund in order to vest the property in his two children: the deed did not have that effect because of two errors (one of which was ignoring the fact that his life interest was subject to . .
Cited – Turner v Turner ChD 1983
The trustees for many years signed every document placed before them by their solicitors (including appointments) without understanding that they had any discretion in the exercise.
Held: What might first appear to have been a decision of . .
Cited – Saunders (Executrix of the Will of Rose Maude Gallie, Deceased) v Anglia Building Society HL 9-Nov-1970
The Appellant had signed an assignment of her lease in favour of her nephew. She said she thought the effect of it would protect her right to continue to live in the house. She now appealed rejection of her plea of non est factum.
Held: The . .
Cited – Stannard v Fisons Pension Trust Limited CA 1991
Fisons had sold their fertiliser division to Norsk Hydro. Acting on advice of actuaries and thinking that the fund was in deficit, the trustees made a transfer to a new fund to provide for pensions of transferring employees in accordance with a . .
Cited by:
Cited – Kohli v Lit and Others ChD 13-Nov-2009
The claimant asserted that the other shareholders had acted in a manner unfairly prejudicial to her within the company.
Held: The claimant was allowed to bring in without prejudice correspondence to contradict evidence by the defendant which . .
Applied – Hunter v Senate Support Services Ltd and others ChD 2005
The court set aside a forfeiture of shares for non-payment of a call. The decisions of the directors to forfeit the shares and to transfer the forfeited shares to the group holding company were flawed, though not improperly motivated, because the . .
Cited – Pitt and Another v Holt and Others ChD 18-Jan-2010
The deceased had created a settlement in favour of his wife. He suffered serious injury and placed the damages in trust, but in a form which created an unnecessary liability to Inheritance Tax on his death. The wife’s mental health act receiver now . .
Cited – Pitt and Another v Holt and Another ChD 18-Jan-2010
The claimant sought to unravel a settlement she had made as receiver for her late husband, saying that it had been made without consideration of its Inheritance Tax implications. The Revenue said that there was no operative mistake so as to allow . .
Cited – Futter and Another v Revenue and Customs; Pitt v Same SC 9-May-2013
Application of Hastings-Bass Rule
F had created two settlements. Distributions were made, but overlooking the effect of section 2(4) of the 2002 Act, creating a large tax liability. P had taken advice on the investment of the proceeds of a damages claim and created a discretionary . .
Cited – Futter and Another v Revenue and Customs; Pitt v Same SC 9-May-2013
Application of Hastings-Bass Rule
F had created two settlements. Distributions were made, but overlooking the effect of section 2(4) of the 2002 Act, creating a large tax liability. P had taken advice on the investment of the proceeds of a damages claim and created a discretionary . .
Lists of cited by and citing cases may be incomplete.
Trusts, Equity
Leading Case
Updated: 01 November 2021; Ref: scu.179013
