Cotterell & Anor v Allendale & Anor

Section 57 of the Trustee Act 1925 permits the court to confer general administrative powers on trustees. An application need not relate to a particular transaction already under contemplation. The proposed power must nevertheless relate to transactions generally, or be ancillary to a transactional power, and the court must be satisfied that each requested extension is expedient and should be granted in its discretion. Section 57 cannot be used to rewrite the dispositive provisions of a trust. A general power to delegate requires separate proof of expediency. The court’s inherent jurisdiction may support remuneration of a trust corporation where that is necessary for the good administration of the trusts.

The claimants, trustees of the Allendale 1949 Settlement, applied for orders extending their powers under section 57(1) of the Trustee Act 1925 and under the court’s inherent jurisdiction. They sought powers including re-appropriation between funds, establishment and management of entities, payments for minors, investment advice and delegation, indemnities, remuneration of trust corporations, and administrative action despite conflicts of interest.

The court granted an initial power of re-appropriation and later considered whether the remaining powers fell within section 57, whether each was expedient, and whether the inherent jurisdiction could support the proposed remuneration provision.

1. Section 57 jurisdiction. The court held that section 57(1) is not confined to a specific disposition or transaction already under contemplation. The words permitting a power to be conferred either generally or in a particular instance support the conferral of general administrative powers.
2. The jurisdiction remains subject to the opening words of section 57. A proposed power must enable trustees to undertake transactions generally, or be a necessary ancillary provision facilitating a transactional power. Section 57 cannot be used to alter the dispositive provisions of a trust, save for incidental effects arising from administrative powers.
3. Expediency must be established separately for each requested extension. The court retains a discretion whether to make the order. Modernisation may be expedient, but a wholesale rewriting of administrative powers is not automatically justified.
4. The court was satisfied that powers concerning entities, payments to or for minors, investment advisers, delegation of investment management, indemnities and related commitments, remuneration of trust corporations, and administrative action notwithstanding conflicts of interest were within jurisdiction and expedient. The conflict provision was subject to disclosure and the presence of an independent trustee.
5. A general power to delegate was refused. Although delegation may constitute a transaction in the broad sense, the trustees had not shown that a general delegation power was expedient or that the discretion to grant it should be exercised.
6. The inherent jurisdiction could authorise remuneration for a trust corporation. Such remuneration was practically necessary if appointment of a trust corporation was required for the good administration of the trusts. The revised order was approved and sealed.

First-instance decision. The court made an initial order on 16 December 2019 and, after further written submissions and a hearing on 17 July 2020, approved and sealed a revised order extending the trustees’ powers, subject to the refusal of a general power to delegate.