Alexander v Alexander & Ors

Under section 57(1) of the Trustee Act 1925, the court may confer a power to sell trust property despite an express restriction in the trust instrument, provided the transaction concerns the management or administration of the trust and does not alter the beneficial interests. The court must consider the interests of the trust as a whole when deciding whether the transaction is expedient. The settlor’s wishes inform, but do not govern, the discretion. A sale may therefore be authorised where the original purpose has failed and retention would prejudice the beneficiaries, while the use of the proceeds for a replacement property requires separate evidence of expedience.

Trustees applied under section 57(1) of the Trustee Act 1925, alternatively under section 1 of the Variation of Trusts Act 1958, for power to sell a cottage held for a beneficiary for life and her children thereafter. The will restricted the trustees’ power to dispose of the cottage and contemplated its occupation by the life tenant.

The cottage had remained empty, uninsured and in need of substantial repair. The proposed transaction involved selling it and purchasing a replacement residential property. The central issues were whether section 57(1) conferred jurisdiction, whether the proposed transactions were expedient, and how the court should exercise its discretion.

1. Jurisdiction. The court had jurisdiction under section 57(1) of the Trustee Act 1925. The will excluded powers which would otherwise arise under sections 6 and 8 of the Trusts of Land and Appointment of Trustees Act 1996 and section 8 of the Trustee Act 2000. There was therefore an absence of the necessary power under the trust instrument and by law.
2. A sale of the cottage, the investment of the proceeds, or the purchase of replacement property would alter the beneficiary’s enjoyment of particular trust assets, but would not alter the beneficial interests under the trust. Section 57(1) could operate despite the settlor’s expressed wish or direction that the property be retained.
3. Expedience. Expedience required consideration of the interests of the trust as a whole, including all beneficiaries, with the court holding the balance fairly between differing interests. Selling the deteriorating, unoccupied and uninsured cottage was expedient. The evidence did not establish that purchasing a replacement property was expedient, particularly because the likely sale proceeds, suitable property and life tenant’s wishes were uncertain.
4. Discretion. The settlor’s intentions were relevant but not determinative. The original purpose of providing a suitable home had failed, all beneficiaries supported the sale, and continued retention was contrary to their interests. The court accordingly conferred power to sell the cottage. The trustees could invest the proceeds without returning to court, but required a further order to purchase land and would need detailed evidence under section 57(1).
5. The alternative application under the Variation of Trusts Act 1958 was unnecessary. Obiter, the court would have approved the sale for the minor and unborn beneficiaries, but not the purchase of replacement property on the evidence available.