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In re Downshire Settled Estates: CA 1953

A scheme of arrangements was proposed on behalf of infant beneficiaries to three settlements. The object of the scheme was to avoid losses to the beneficiaries by reason of inheritance tax.
Held: The court rejected the contention that it had an inherent jurisdiction to vary the beneficial interests in a trust fund designated by the settlor. The section provides a power to the Court to approve advantageous dealings. In those circumstances, if the power to be given to the trustee was not a specific power for a particular dealing but rather a wide discretionary power to alter the terms of the trust then the case did not fall within the section.
Sir Francis Evershed MR said: ‘We have already pointed out that neither trustees nor the court itself at any time, before 1925, had any general power to depart from the precise directions (provided that they were within the law) that a settlor thought proper to declare. If Parliament, in enacting section 57, had intended to confer this power on the court it is, in our view, inconceivable that it would not have done so in express terms, having regard not only to the novelty but also to the width of the jurisdiction that it was creating; and it is equally incredible that it should have done so without imposing any kind of limit, other than expediencey [sic], upon the extent to which, or the manner in which, the court was to exercise its powers.’
Denning LJ said: ‘The practice of the profession in these cases is the best evidence of what the law is: indeed it makes law.’

Judges:

Sir Francis Evershed MR, Sir Charles Romer LJ, Denning LJ

Citations:

[1953] Ch 218

Statutes:

Trustee Act 1927 57

Jurisdiction:

England and Wales

Cited by:

CitedKleinwort Benson Ltd v Lincoln City Council etc HL 29-Jul-1998
Right of Recovery of Money Paid under Mistake
Kleinwort Benson had made payments to a local authority under swap agreements which were thought to be legally enforceable when made. Subsequently, a decision of the House of Lords, (Hazell v. Hammersmith and Fulham) established that such swap . .
Appeal fromChapman v Chapman HL 25-Mar-1954
It was suggested to the House that: ‘A judge of the Chancery Division of the High Court of Justice has an inherent jurisdiction, in the execution of the trusts of a settlement, to sanction, on behalf of infant beneficiaries and unborn persons, a . .
Lists of cited by and citing cases may be incomplete.

Land, Trusts

Updated: 20 August 2022; Ref: scu.236531

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