Source: All England Reporter
Publisher Citation: [2008] All ER (D) 78 (Jun)
Neutral Citation: [2008] EWHC 1267 (Ch)
Court: Chancery Division
Judge:

Mark Herbert QC (sitting as a deputy judge of the High Court)

Representation Geoffrey Topham (instructed by Farrer & Co) for the claimants.
  Michael Waterworth (instructed by Mills & Reeve LLP) for the second defendant.
  Nicholas Le Poidevin (instructed by Taylor Wessing LLP) for the third defendant.
Judgment Dates: 9 June 2008

Catchwords

Trust and trustee - Powers of trustee - Exercise of powers - Discretionary trust - Trust agreement permitting trustees to withhold from distribution any trust property subject to liabilities incurred in administration of trust estate - Settlors commencing proceedings against trustees for breach of duty - Trustees deciding to retain part of life tenant's future income in respect of litigation costs - Whether trustees having power to make proposed retention - Whether decision to make such retention proper exercise of trustees' powers.

The Case

On the claimant trustees' application to court for approval of their decision to make a retention of one-third of the future income of a life tenant under a trust settlement for the purpose of reimbursing themselves in respect of litigation costs incurred, and to be incurred by them, in certain pending overseas litigation, it was decided that in the circumstances, the trustees had not made out their case for such a retention out of income.

Practice Areas

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