C v C & Ors

The jurisdiction under section 1 of the Variation of Trusts Act 1958 is not confined to trusts governed by English law. Where a trust has substantial foreign elements, the court must carefully consider whether it is appropriate to exercise that jurisdiction and whether the foreign court is the more suitable forum. The English court may vary a foreign-law trust where the law governing the trust confers a substantially similar power on its own courts. In exercising the jurisdiction, the court should apply the substantive law governing the trust. The court approved the proposed variations because they benefited the represented beneficiaries, did not resettle the trust property, and could appropriately be dealt with together in England.

The claimant and the defendants were trustees and beneficiaries of four family settlements made in 1932, 1950 and 1996. The 1932 and 1996 settlements were governed by English law. The 1950 settlement was governed by Kenyan law and contained substantial connections with Kenya.

The claimant sought approval under section 1 of the Variation of Trusts Act 1958 for variations of all four settlements and the compromise of an issue concerning the validity of the two later settlements. The central jurisdictional issue was whether the English court could approve a variation of the Kenyan settlement, having regard to the Recognition of Trusts Act 1987 and the Hague Convention on Trusts.

1. The court approved the compromise on behalf of the minor defendants and the unborn and unascertained persons represented in the proceedings. The terms were directed to be binding on them and to be carried into effect by the relevant trustees.

2. The court was satisfied that the proposed arrangement benefited the minor defendants and all unborn and unascertained persons who might become beneficially interested under the four settlements. It also held that the arrangement did not constitute a resettlement of the trust property. The variations were therefore approved under section 1 of the Variation of Trusts Act 1958.

3. Following Re Ker's Settlement Trusts [1963] Ch 553 and Re Paget's Settlement [1965] 1 WLR 1046, the statutory jurisdiction was not limited to trusts governed by English law. However, substantial foreign elements required careful consideration of whether England was the proper forum.

4. The Hague Convention did not remove the jurisdiction. Article 8 made the law governing the trust applicable to its variation, while article 16 did not provide a relevant exception. Nevertheless, the English court could exercise its statutory jurisdiction where the governing foreign law conferred a similar power on its own courts. The court accepted that section 62 of the Kenyan Trustee Act supplied such a power and that the English court could exercise the corresponding jurisdiction.

5. Charalambous v Charalambous [2005] Fam 250 provided no material assistance because it concerned variation in divorce proceedings under the Matrimonial Causes Act 1973 and relied in part on article 15, which was inapplicable here.

6. It was appropriate to exercise the jurisdiction. The Kenyan settlement was closely associated with the three English settlements, and requiring a separate Kenyan application would have been unreasonable and disproportionate. The variations were approved, subject to amendments made during the hearing.