Pitt & Anor v Holt & Anor

Pitt & Anor v Holt & Anor

The Hastings-Bass rule, as developed in first instance decisions, is not a correct statement of the law. Trustees' acts within their powers are not voidable for failure to consider relevant matters unless a breach of fiduciary duty is established. Reliance on professional advice discharges that duty. Mistake as to tax consequences is not sufficient to set aside voluntary dispositions unless it relates to the legal effect or a basic fact of the transaction.

Parties
Claimant: Patricia Madge Pitt; Claimant: David Neville Waite Shores; Defendant: David Langford Holt; Defendant: The Commissioners for Her Majesty’s Revenue and Customs; Claimant: Mark Stephen Futter; Claimant: Clive Donald Cutbill; Defendant: Elizabeth Gaye Futter; Defendant: Adam Jacob Futter; Defendant: James Daniel Futter; Defendant: Natalie Helen Futter
Jurisdiction
England and Wales
Judgment Date
09 March 2011
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeals allowed; orders below set aside.
Legal Topics
Exercise of Trustee Discretion, Hastings Bass Rule, Mistake in Voluntary Dispositions, Inheritance Tax Liability, Fiduciary Duty, Professional Advice and Negligence
Trusts and Equity Taxation Exercise of Trustee Discretion Hastings Bass Rule Mistake in Voluntary Dispositions Inheritance Tax Liability Fiduciary Duty Professional Advice and Negligence

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Parties

Patricia Madge Pitt

Claimant

David Neville Waite Shores

Claimant

David Langford Holt

Defendant

The Commissioners for Her Majesty’s Revenue and Customs

Defendant

Mark Stephen Futter

Claimant

Clive Donald Cutbill

Claimant

Elizabeth Gaye Futter

Defendant

Adam Jacob Futter

Defendant

James Daniel Futter

Defendant

Natalie Helen Futter

Defendant

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether the Hastings-Bass rule allows trustees' discretionary acts to be set aside for failure to consider relevant matters, especially tax consequences
  2. 2 Whether a voluntary disposition can be set aside for mistake
  3. 3 What is the correct legal test for court intervention in trustee decisions

Ratio Decidendi

The Hastings-Bass rule, as developed in first instance decisions, is not a correct statement of the law. Trustees' acts within their powers are not voidable for failure to consider relevant matters unless a breach of fiduciary duty is established. Reliance on professional advice discharges that duty. Mistake as to tax consequences is not sufficient to set aside voluntary dispositions unless it relates to the legal effect or a basic fact of the transaction.

Court Disposition

Appeals allowed; orders below set aside.

Orders

  • Order of Mr Robert Englehart Q.C. in Pitt v Holt set aside.
  • Order of Mr Justice Norris in Futter v Futter set aside.