Under the 1968 Act, the court is not in the position of a statutory settlor. Lord Reid described the provisions of the 1958 Act: ‘Under the Variation of Trusts Act the court does not itself amend or vary the trusts of the original settlement. The beneficiaries are not bound by variations because the court has made the variation. Each beneficiary is bound because he has consented to the variation. If he was not of full age when the arrangement was made he is bound because the court was authorised by the Act to approve of it on his behalf and did so by making an order. If he was of full age and did not in fact consent he is not affected by the order of the court and he is not bound. So the arrangement must be regarded as an arrangement made by the beneficiaries themselves. The court merely acted on behalf of or as representing those beneficiaries who were not in a position to give their own consent and approval.
So we have an alteration of the settlement which was not made by the settlor or by the court as being empowered to make it, but which was made by the beneficiaries quite independently of the settlor or of any power, express or implied given or deemed to have been given by him.’
Lord Guest: ‘Section 1 of the Act enabled the court to give approval to an arrangement on behalf of such persons as were unable by incapacity or otherwise to give their approval. The court thus supplied the capacity which the incapax lacked.’
Lord Wilberforce: ‘If all the beneficiaries under the settlement had been sui juris, they could, in my opinion, have joined together with the trustees and declared different trusts which would supersede those originally contained in the settlement. Those new trusts would operate proprio vigore, by virtue of a self-contained instrument – namely, the deed of arrangement or variation. The original settlement would have lost any force or relevance. The effect of an order made under the Variation of Trusts Act, 1958, is to make good by act of the court any want of capacity to enter into a binding arrangement of any beneficiary not capable of binding himself and of any beneficiary unborn: the nature and effect of any arrangement so sanctioned is the same as that I have described.’
Judges:
Lord Reid, Lord Guest, Lord Wilberforce
Citations:
[1967] UKHL 7, [1968] AC 685
Links:
Statutes:
Variation of Trusts Act 1958 1
Jurisdiction:
England and Wales
Citing:
Appeal from – Re Holmden’s Settlement Trusts CA 1966
Lord Denning MR said: ‘I must, however, consider the statement of Lord Upjohn on the footing that it is one of two reasons which he gave for his decision. It is said that both reasons are binding on all courts in the land, including the House of . .
Cited by:
Cited – Goulding and Goulding v James and Daniel CA 10-Dec-1996
The family sought approval of a proposed variation of the will to make best advantage of tax allowances. Because the beneficial interests of children would be affected, the court’s approval was necessary. The judge had refused to approve the . .
Lists of cited by and citing cases may be incomplete.
Trusts, Torts – Other
Updated: 06 July 2022; Ref: scu.241669
