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13.04.18

Will equity will intervene to correct defective execution of a power? – Re Thunder’s Trusts, English v Keats

Marcus Flavin, Justin Holmes, and Josh Lewison all recently appeared in the case of Re Thunder’s Trusts, English v Keats, in which the court was asked to declare that deeds of appointment made 19 years ago and intended to give an interest in possession to beneficiaries in each of three identical settlements should be deemed to be effective, even though a drafting error had resulted in one of the trustees (who was also the settlor of the trusts) not being a party to them.

HHJ Hacon sitting as a judge of the High Court rejected the argument that a proprietary estoppel arose to the same effect as the defective deeds, on grounds that he was not satisfied there was detriment, and in any event that in his view trustees could not give rise to an estoppel binding on the trust fund.

However he was prepared to revive an old doctrine, last successfully relied on in England and Wales in 1908 and described by Park J in 2005 (in Breadner v Glanville-Grossman) as ‘best consigned to history’, that equity can perfect the defective exercise of a power when the done of the power has a natural or moral obligation to provide for the intended object of its exercise; they intended to exercise it; and there had been an actual attempt to exercise it (as opposed to a complete failure to do so).

Marcus Flavin appeared for the Claimants, Justin Holmes appeared for the 4th Defendant (as representative of the class with interests in default of the appointment) to put the contrary arguments, and Josh Lewison represented the trustees.

You can read the full judgment here [http://www.bailii.org/ew/cases/EWHC/Ch/2018/673.html]