pitt_holtChD2010
References: [2010] EWHC 236 (Ch)
Links: Bailii, Times
Coram: Robert Englehart, QC
Ratio: The deceased had created a settlement in favour of his wife. He suffered serious injury and placed the damages in trust, but in a form which created an unnecessary liability to Inheritance Tax on his death. The wife’s mental health act receiver now sought the unravelling of the trust based on either Hastings Bass or mistake.
Held: The rule in Hastings-Bass could be used by others than only trustees. Robert Englehart QC said: ‘A mere failure by someone to take a material consideration into account in the conduct of his own affairs will not justify setting aside for mistake. It was said in argument before me that the law allows you to be as foolish as you like with your own property. On the other hand, there certainly is jurisdiction, irrespective of any trust or fiduciary element, to set aside a voluntary transaction where there has been an operative mistake. Nevertheless, for the rule in Hastings-Bass to apply there is no need to identify a mistake as such, as opposed to a failure to take a relevant consideration into account.’ though there was no real mistake, only a failure to address the effect of the arrangement fully, the rule in Hastings-Bass could be applied and the trust varied.
Statutes: Mental Health Act 1983
This case cites:
- Cited – Sieff v Fox ChD (Bailii, [2005] EWHC 1312 (Ch), [2005] 1 WLR 3811)
The advisers to trustees wrongly advised the trustees about the tax consequences of exercising a power of appointment in a certain way. As a result a large unforeseen Capital Gains Tax liability arose. The trustees sought to set aside the . . - Cited – Re Hastings-Bass; Hastings v Inland Revenue CA ([1975] Ch 25, Bailii, [1974] EWCA Civ 13, [1974] 2 All ER 193)
Trustees of a settlement had exercised their power of advancement under the section, in order to save estate duty by transferring investments to be held on the trusts of a later settlement. However the actual effect of the advancement was that the . . - Cited – Mettoy Pension Trustees v Evans ChD ([1990] 1 WLR 1587)
Where a trustee acts under a discretion given to him by the terms of the trust the court will interfere with his action if it is clear that he would not have so acted as he did had he not failed to take into account considerations which he ought to . . - Cited – Byng v London Life Association CA ([1990] 1 Ch 170)
The venue selected for a meeting of the members of a company was too small to accommodate all the members who attended, and so the chairman adjourned the meeting to an alternative venue.
Held: The decision by the chairman was set aside on the . . - Cited – Gibbon v Mitchell ChD ([1990] 1 WLR 1304, [1990] 3 All ER 338)
G executed a deed surrendering his life interest in a trust fund in order to vest the property in his two children: the deed did not have that effect because of two errors (one of which was ignoring the fact that his life interest was subject to . . - Cited – Hunter v Senate Support Services Ltd and others ChD ([2005] 1 BCLC 175)
The court set aside a forfeiture of shares for non-payment of a call. The decisions of the directors to forfeit the shares and to transfer the forfeited shares to the group holding company were flawed, though not improperly motivated, because the . . - Cited – Edge and others v Pensions Ombudsman and Another CA (Times 19-Oct-99, Bailii, [2000] Ch 602, [1999] EWCA Civ 2013, [1999] 4 All ER 546)
The Pensions Ombudsman was wrong to set aside the decision of pensions trustees where that decision was properly made within the scope of a discretion given to the Trustees. He should not carry out an investigation where no particular benefit could . . - Cited – Equitable Life Assurance Society v Hyman HL (Times 21-Jul-00, Gazette 03-Aug-00, House of Lords, House of Lords, Bailii, [2000] UKHL 39, [2000] 3 All ER 961, [2000] 3 WLR 529, [2002] 1 AC 408, [2001] Lloyds Rep IR 99, [2000] Pens LR 249, [2000] OPLR 101)
The directors of the Society had calculated the final bonuses to be allocated to policyholders in a manner which was found to be contrary to the terms of the policy. The language of the article conferring the power to declare such bonuses contained . . - Cited – Anker-Petersen v Christensen ChD ([2002] WTLR 313, Bailii, [2001] EWHC B3 (Ch))
Where a mistake is made as to the effect of an appointment under a trust it may be possible to invoke the court’s jurisdiction to rescind the appointment. Davis J considered Millett J’s distinction between ‘effect’ and ‘consequences’: ‘An example in . . - Cited – Ogden and Another v Trustees of the RHS Griffiths 2003 Settlement and others; In Re Griffiths deceased ChD (Bailii, [2008] EWHC 118 (Ch), [2008] STC 776, [2008] 2 All ER 654, [2009] 2 WLR 394, [2009] Ch 162, [2008] WTLR 685, [2008] STI 250, [2009] BTC 8027)
A life-time transfer which had been made under a mistake as to the donor’s chances of surviving long enough for the transfer to be exempt from Inheritance Tax was set aside. Unbeknown to the donor, he had lung cancer at the time.
Held: Lewison . . - Cited – Wolff v Wolff ChD (Bailii, [2004] EWHC 2110 (Ch), [2004] STI 2068, [2004] WTLR 1349, [2004] STC 1633, [2009] BTC 8017, [2004] NPC 135)
The court considered its ability to redraw a document where its legal effect was misunderstood. . . - Cited – Abacus Trust Company (Isle of Man) Colyb Limited v Barr, Barr, and Barr ChD ([2003] EWHC 114 (Ch), Gazette 03-Apr-03, Bailii, [2003] WTLR 149, [2003] 2 WLR 1362, [2003] 1 All ER 763, [2003] Ch 409)
The court considered the Rule in Hastings-Bass, and specifically (1) whether the trustee’s decision is open to challenge when the failure to take a consideration into account is not attributable to a breach of fiduciary duty on the part of the . . - Cited – Ogilvie v Littleboy CA ((1897) 13 TLR 399)
Lindley LJ discussed the variation of a gift for mistake: ‘Gifts cannot be revoked, nor can deeds be set aside, simply because the donors wish they had not made them and would like to have back the property given. Where there is no fraud, no undue . . - Cited – Burrell and Sharman v Burrell, Shore, Tyrrell, etc ChD (Bailii, [2005] EWHC 245 (Ch), (2004-05) 7 ITELR 622, [2005] Pens LR 289, [2005] WTLR 313, [2005] BTC 8011, [2005] STC 569)
Shares were appointed by trustees in the mistaken belief that they attracted business property relief from Inheritance tax. They sought to set aside the appointment.
Held: Mann J applied the rule in Stannard v Fisons Pensions Trust and . .
(This list may be incomplete)
This case is cited by:
- Cited – Futter and Another v Futter and Others ChD (Bailii, [2010] EWHC 449 (Ch), [2010] Pens LR 145, [2010] STC 982, [2010] STI 1442, [2010] BTC 455, [2010] WTLR 609)
Various family settlements had been created. The trustees wished to use the rule in Hastings-Bass to re-open decisions they had made after receiving incorrect advice.
Held: The deeds were set aside as void. The Rule in Hastings-Bass derives . .
(This list may be incomplete)
Leading Case
Last Update: 08 October 2019
Ref: 396742
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