Pitt & Anor v Holt & Anor

Pitt & Anor v Holt & Anor

The rule in Hastings-Bass applies to the exercise of a fiduciary power by a receiver under the Mental Health Act 1983. Mrs Pitt, as receiver, failed to consider the material inheritance tax consequences of the Settlement and Assignment. Had she known, she would not have entered into the transactions. Therefore, the Settlement and Assignment are set aside as ineffective. The alternative ground of mistake does not succeed as there was no operative mistake as to the effect of the transaction, only as to its consequences.

Parties
Claimant: Patricia Madge Pitt; Claimant: David Neville Waite Shores; Defendant: David Langford Holt; Defendant: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
18 January 2010
Procedural Posture
Civil / Judgment After Part 8 Claim Hearing
Outcome
Claim allowed under the rule in Hastings-Bass; Settlement and Assignment set aside as ineffective.
Legal Topics
Hastings Bass Rule, Mistake in Voluntary Dispositions, Inheritance Tax Liability, Fiduciary Duties, Receivership Under Mental Health Act
Equity Trusts and Estates Taxation Hastings Bass Rule Mistake in Voluntary Dispositions Inheritance Tax Liability Fiduciary Duties Receivership Under Mental Health Act

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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

Procedural Posture

Civil / Judgment After Part 8 Claim Hearing

Legal Issues

  1. 1 Whether the rule in Hastings-Bass applies to a receiver under the Mental Health Act 1983 exercising a fiduciary power
  2. 2 Whether the Settlement and Assignment can be set aside due to failure to consider inheritance tax consequences
  3. 3 Whether the transactions can be set aside for mistake

Ratio Decidendi

The rule in Hastings-Bass applies to the exercise of a fiduciary power by a receiver under the Mental Health Act 1983. Mrs Pitt, as receiver, failed to consider the material inheritance tax consequences of the Settlement and Assignment. Had she known, she would not have entered into the transactions. Therefore, the Settlement and Assignment are set aside as ineffective. The alternative ground of mistake does not succeed as there was no operative mistake as to the effect of the transaction, only as to its consequences.

Court Disposition

Claim allowed under the rule in Hastings-Bass; Settlement and Assignment set aside as ineffective.

Orders

  • Declaration that the Settlement and Assignment executed by Mrs Pitt as receiver are set aside and ineffective.