- October 9, 2018
- Posted by: Josiah Hincks Solicitors
- Category: News
Not every eventuality can be foreseen by those who draft trust deeds and, over time, the powers granted to trustees can prove inadequate to their task. However, as a case concerning a nationally important stately home showed, the High Court can step in to make up for such deficits.
The case concerned a family trust which, amongst other things, held 166 acres of farmland that had an estimated value of £1,000 an acre when the land was purchased in 1986. The local authority, however, had since granted planning permission for large-scale residential development of the land, thus multiplying its value up to 100 times.
The permission was subject to a condition requiring 70 per cent of the profits from the land sale to be used for the maintenance and conservation of the stately home. The trustees wished to enter into a deed of covenant with the council that would achieve that objective. However, they had no power to do so because the only beneficiaries of the trust were members of the relevant family.
In those circumstances, the trustees applied under Section 57 of the Trustee Act 1925 to be granted the powers they required to finalise the agreement with the council. They planned to pay the 70 per cent profit share into a heritage foundation dedicated to maintaining and conserving the stately home as a national treasure.
In upholding the application, the Court found that there were compelling reasons for granting the relief sought. Unlocking the land’s full development potential would hugely improve the trust’s financial position, benefit future generations of the family and contribute substantially to the £40 million that the foundation intended to spend on preserving the stately home. All the beneficiaries had expressed their agreement to the trustees’ proposals.