In Re Steed’s Will Trusts

A court will not ordinarily interfere with trustees’ exercise of an express discretionary power where they have directed themselves properly and acted to fulfil the trust’s purposes. Sympathy for a beneficiary is not a ground for overriding that discretion.

Under the Variation of Trusts Act 1958, “arrangement” has a wide meaning and may include a proposal made by one person to vary or revoke trusts. The court must consider the proposed arrangement as a whole and decide whether it should be approved on behalf of persons unable to consent, having regard to the settlor’s or testator’s purposes.

The appellant was the life beneficiary of trusts created by Joshua Owen Steed’s will. The trusts required the trustees to sell a farm, subject to a power to postpone the sale, and held the property or proceeds on protective trusts for the appellant, with a power of appointment in her favour. The appellant had irrevocably appointed the remainder to herself.

After the trustees agreed to sell the farm, the appellant sought relief restraining the sale and later invited the court to approve a variation removing the protective-trust provisions. The proposed variation would have made her absolutely entitled. The judge refused relief and approval, and the appeal concerned the court’s control of the trustees’ discretion and the proper approach under the Variation of Trusts Act 1958.

1. Appeal dismissed. The court declined to restrain the proposed sale and refused to approve the proposed variation. The trustees’ proper costs were payable from the trust corpus, and the appellant’s costs were dealt with under Schedule III to the Legal Aid and Advice Act 1949.

2. The trustees had an express trust for sale and a discretion to postpone the sale. They had considered the farm’s suitability, rent difficulties, possible liabilities for repairs and the advice available to them. The proposed price was a very good offer on the evidence. Their decision was a deliberate discharge of their duty to give effect to the testator’s intentions. There was no ground for judicial interference.

3. The court declined to adopt the broader formulation apparently underlying the first-instance judgment in Re Steed’s Will Trusts, reported at [1959] Ch 354, namely that intervention required circumstances warranting an administration or execution decree. The court instead accepted the general approach supported by Re Mayo, reported at [1943] Ch 302: absent bad faith or special circumstances showing serious misdirection, the court should not interfere with a properly exercised trustee discretion.

4. Under section 1 of the Variation of Trusts Act 1958, “arrangement” is capable of including any proposal to vary or revoke trusts, whether or not made by agreement between beneficiaries. The court’s task was not to approve the proposal on behalf of the appellant, nor did it require the trustees’ approval. It had to consider approval on behalf of persons whose potential interests under the discretionary trusts prevented the appellant from terminating the settlement, including a possible future spouse.

5. The court’s discretion under section 1 was wide. It required consideration of the arrangement as a whole, rather than only its material effect on the person represented. The court had to assess the proposal in the light of the trust’s purposes and the testator’s intentions. Because removing the protective trusts would defeat the evident purpose of preserving the appellant’s provision and protecting it from dissipation, the arrangement was not proper to approve. Lord Justice Upjohn agreed that the trustees’ views deserved respect but were not conclusive; Lord Justice Willmer agreed without adding reasons.

• Court of Appeal: dismissed the appeal from the refusal of relief and approval of the proposed variation.
• Chancery Division: refused relief and approval of the proposed variation, reported at [1959] Ch 354.