Gelber & Anor v Tthe Sunderland Foundation & Ors

Section 57 of the Trustee Act 1925 permits the court to confer a trustee power where the statutory conditions are met and the proposed transaction is expedient. Expediency is assessed by reference to the interests of the beneficiaries as a whole. The transaction need not benefit every beneficiary equally, and the court may balance benefits and disadvantages, including tax consequences.

The jurisdiction does not permit the court to rewrite the trust. It may, however, authorise a disposition required to unlock substantially greater value, or modify trustee appointment and retirement powers where the resulting arrangement benefits the trust as a whole. A change of trustee can constitute a disposition because control of the trust assets passes from one trustee to another.

This was a Part 8 claim concerning the Marlborough 1981 Settlement. The trustees sought additional powers under section 57 of the Trustee Act 1925.

• First, they sought authority to enter into a deed requiring payment of a substantial part of the development value of trust land to Blenheim Palace Heritage Foundation, in order to satisfy a planning condition and unlock residential development.
• Secondly, they sought modification of the statutory trustee appointment and retirement provisions so that a single non-natural person could act as sole trustee, although not necessarily as a trust corporation.

The issues were whether the proposed powers fell within section 57 and whether each transaction was expedient for the trust as a whole.

1. Section 57 jurisdiction. The court identified four express requirements: the trustees lacked the proposed power; the power related to management or administration of trust property; it authorised a disposition or transaction of the type contemplated by the section; and the transaction was expedient. The court also had to be satisfied that the order would not rewrite the trust and that it was appropriate to exercise the discretion. These principles were explained by Chapman v Chapman [1954] AC 429 and Re Downshire Settled Estates [1953] 1 Ch 216.
2. Expediency. Expediency includes advantage or benefit and may include necessity short of an emergency. The transaction must benefit the beneficiaries as a whole, but need not benefit every beneficiary equally. The court should adopt a broad approach and weigh benefits and disadvantages in a notional balance. Significant adverse tax consequences, or an appreciable risk of them, may weigh against expediency.
3. Woodstock Land. The trustees lacked power to make the proposed payment to the heritage foundation. The deed was a disposition and transaction within section 57. Payment of the heritage contribution was the only current means of satisfying the planning condition and unlocking a substantially greater development value. The resulting improvement to the trust fund, the alignment with the beneficiaries’ interests and the absence of material tax disadvantages made the transaction plainly expedient. The order was therefore granted.
4. Sole trustee. The court accepted that appointment or retirement of a trustee necessarily involved the transfer of control of trust assets and was therefore a disposition within section 57. The proposed modification of the statutory powers was legally permissible. Although sale of trust land would still require two trustees under section 27(2) of the Law of Property Act 1925, and there was a theoretical reduction in beneficiary protection, the practical and administrative advantages outweighed those disadvantages. The sole trustee order was granted.

First instance decision. The judgment records no appeal or earlier decision in the same proceedings.