Analysis
This claim comprised various applications relating to the trusts of the Portman Estate, which own significant real property in London and elsewhere. There are several separate settlements, whose property is held in various funds. The claim was brought by the trustees, without naming any defendants. However, two key beneficiaries consented to the proposed application in writing.
The trustees sought orders under s57 Trustee Act 1925 conferring various powers on the trustees of various different trusts of the estate. None of the powers sought affected the beneficial interests under the trusts. The powers sought were a power to trade; a power to provide guarantees for the beneficiaries and cross guarantees across the different funds of the estate trusts; a power to accept good receipt for payments to a minor from a parent or guardian or from the minor themselves where over 16; a power to hold property via nominees; a power to employ a person to advise on, manage, or deal with trust property; a power to act as an officer of a company in which the trust fund is invested and to receive remuneration for that role.
The trustees also sought a general power to extend the administrative powers of the trust themselves subject to the opinion of counsel with a ten-year high court qualification that the proposed power was necessary and in the interests of the beneficiaries.
The trustees also sought a declaration about the meaning of a conflicts clause in two of the settlements. The court was also asked to insert a similar clause into one of the settlements pursuant to s57 Trustee Act 1925. The issue was whether a particular conflicts clause required each trust in a transaction that involved more than two trusts to have a trustee that was unique to that trust in the whole transaction or whether the clause simply required each trust to have one unique trustee as against each other individual trust in the transaction.
The trustees further sought the variation of the powers of remuneration in the settlements under the court’s inherent jurisdiction. There had already been an order in 2005 creating a complex scheme of remuneration. The trustees submitted that it should be varied to ensure that trustees across the estate received the same remuneration for the same level of work.
Held:
- 1) There was no good reason why the beneficiaries needed to be parties to the application. The claim would be permitted to proceed without them.
- 2) In relation to the power to trade, there were three specific transactions, all of which were expedient. The court could authorise these. However, conferring a general power would avoid the need for further applications to court and would allow the trustees to adapt to changing circumstances, in the light of professional advice at the time. A general power to trade was conferred on the trustees of the two settlements that did not have one.
- 3) The other specific powers were also expedient and were conferred. The guarantee power would be useful given that the various funds were administered together. The good receipt payment was desirable as beneficiaries under 18 were in receipt of funds and it was disproportionate to arrange for the trustees to oversee the funds’ application. The nominee power would be beneficial as the estate was largely invested in real property held by different funds. The power to employ a manager was also expedient. The power to act as an officer of a company and receive remuneration was expedient as there was a company that assisted in the management of the estate and it would be useful for the trustees to be officers of that company. This would also protect the interests of the beneficiaries. Professional trustees would require remuneration for that role.
- 4) The power to amend the administrative powers in future was not conferred. It went far further than any of the other powers applied for. It was hard to see what further power the trustees might need. Further, the court was of the view that it was less certain that such a power was usually conferred in modern trusts than in relation to other powers to which it was referred.
- 5) The conflicts clause was construed so as only to require a trust in a multi-trust transaction to have a unique trustee vis-à-vis any other one trust and not a trustee that was unique within the whole transaction. Such a construction was workable and would protect the beneficiaries’ interests. Declaration accordingly.
6) The court was satisfied that the proposed variation to the remuneration scheme should be made. The terms of the scheme itself satisfactorily protected the interests of the beneficiaries.
JUDGMENT BIRSS J: [1] This action relates to the Portman Estate. The estate is held for the benefit of the Portman family, principally the children and issue of the 9th Viscount Portman. The family consists of about 90 individuals. The estate has significant property holdings in Central London and owns a large part of Marylebone. …Continue reading "Re The Portman Estate [2015] EWHC 536 (Ch)"