An “Excessive Exercise” of the Power of Amendment

Legal Principle:

Geraint Thomas in Thomas on Powers (2nd Edition) states at [16.19]:

“As a general rule, restrictions on a power of amendment cannot themselves be amended, removed or annulled by means of the exercise of the power; otherwise the restrictions could be self-defeating. If those restrictions or limitations are entrenched, the power cannot be exercised so as to remove or annul them, whether they are a traditions trust1 or a pension scheme2.”

(1) Re Brunner’s Declaration of Trust [1941] 2 All ER 745.

(2) Re Alfred Herbert Ltd Pension and Life Assurance Scheme’s Trusts [1960] 1 WLR 271; UEB Industries Ltd v WS Brabant and others [1991] PLR 109; Rictchie v Blackely [1985] 1 NZLR 630; British Coal Corporation v British Coal Staff Superannuation Scheme Trustees Ltd [1994] OPLR; Harwoood-Smart v Caws [2000] OPLR 227; The Law Debenture Trust Plc v Lonrho Africa Trade & Finance Limited [2002] EWHC 2732 (Ch)

Geraint Thomas in Thomas on Powers (2nd Edition) states in Chapter 8 – “The Excessive Execution of a Power” at [8.01]:

“Most instances of excessive execution involve attempts to go beyond that which is authorised by the express or implied terms of the particular power. Common examples are……Inclusions of persons who, or purposes which, are not proper objects of the power3; and a failure to comply with any restriction or condition imposed on the power being exercised4.”

(3) Re Boulton’s Settlement Trust [1928] Ch 703

(4) Price v Williams-Wynn [2006] EWHC 788 (Ch)

 

In The Laws of Australia {Thompson Reuters) at [15.14.1450] under the section “It is the trustee’s plainest duty to obey the terms of the trust” the following is stated:

“Where the trust instrument confers a power of amendment, the conditions and restrictions imposed on its exercise must themselves be strictly observed.”

Examples of the application of this legal principle care be found in the following cases:

  • Walker Morris Trustees Ltd. v Masterson & Anor [2009] EWHC 1955 (Ch) – Details here .
  • Sovereign Trustees Ltd & Anor v Glover & Ors [2007] EWHC 1750 (Ch) – Details here
  • Trustee Solutions Ltd & Ors v Dubery & Anor [2006] EWHC 1426 (Ch) – Details here
  • Re IMG Pension Plan [2009] EWHC 2785 (Ch) – Details here
  • Independent Trustee Services Ltd v Knell [2010] EWHC 650 (Ch) – Details here
  • PNPF Trust Co Ltd v Taylor [2010] EWHC 1573 (Ch) – Details here
  • Re Cavill Hotels Pty Ltd [1998] 1 Qd R 396.