X v A & Ors [2005] EWHC 2706 (Ch) (29 November 2005)

X v A & Ors [2005] EWHC 2706 (Ch) (29 November 2005)

The proposed advancement of a substantial part of the trust capital to the wife for charitable purposes could not be said to be for her benefit within the meaning of the trust and relevant authorities, as it did not improve her material situation nor relieve her of a moral obligation she would otherwise have to discharge from her own resources. The trustees were therefore not at liberty to enter into the proposed transaction.

Citation
[2005] EWHC 2706 (Ch)
Parties
Claimant: X; Defendant: A; Defendant: Third to Seventh Defendants
Jurisdiction
England and Wales
Judgment Date
29 November 2005
Procedural Posture
Trustees' Application for Directions / Judgment After Hearing
Outcome
Application refused
Legal Topics
Exercise of Trustee Powers, Advancement of Trust Capital, Moral Obligations and Benefit, Discretionary Trusts, Charitable Gifts From Trusts
Trusts and Estates Charity Law Exercise of Trustee Powers Advancement of Trust Capital Moral Obligations and Benefit Discretionary Trusts Charitable Gifts From Trusts

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Parties

X

Claimant

A

Defendant

Third to Seventh Defendants

Defendant

Procedural Posture

Trustees' Application for Directions / Judgment After Hearing

Legal Issues

  1. 1 Whether trustees can exercise powers of revocation and re-appointment to release substantial trust capital to life tenant for charitable purposes
  2. 2 Whether such an exercise is for the 'benefit' of the life tenant within the meaning of the trust instrument and relevant law

Ratio Decidendi

The proposed advancement of a substantial part of the trust capital to the wife for charitable purposes could not be said to be for her benefit within the meaning of the trust and relevant authorities, as it did not improve her material situation nor relieve her of a moral obligation she would otherwise have to discharge from her own resources. The trustees were therefore not at liberty to enter into the proposed transaction.

Court Disposition

Application refused

Orders

  • Trustees not at liberty to enter into the proposed transaction.
  • Trustees and third to seventh defendants entitled to costs out of the fund on the indemnity basis.