Judicial Statements on the Exercise of Powers

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The following are examples of judicial statements made in relation to the exercise of powers that are to be found in Trust Deeds.

Lord Northington {High Court of Chancery}

No point is better established than that, a person having a power, must execute it bona fide for the end designed, otherwise it is corrupt and void.”

Aleyn v Belchier (1758) 1 Eden 132, at p. 138; [1758] EngR 208; 28 E.R. 634, at p. 637.

Cited by Dixon J in Mills v Mills  [1938] HCA 4; (1938) 60 CLR 150

 

Millett J {High Court of England and Wales- Chancery Division}

“It is trite law that a power can be exercised only for the purpose for which it is conferred, and not for any extraneous or ulterior purpose”

Re Courage Group’s Pension Schemes Ryan v Imperial Brewing and Leisure Ltd [1997] 1 All ER 528 at 537(e) ; [1987] 1 WLR 495 at 505(e).

Gordon Jackson (Glasgow Govan), Subordinate Legislation Committee Official Report #31, October 2006.

Trite law is law that, if you do not know it, you should. It is like saying that two and two is four. For example, there is a presumption of innocence in Scotland. That is trite law—something that everybody knows.”

 

Henderson J  {High Court of England and Wales – Chancery Division}

 

First, it is trite law that a power conferred on a trustee (or any person other than a beneficial owner) may be exercised only for the purposes for which it was granted, and not for purposes foreign to the power or to secure a collateral benefit”.

Independent Trustee Services Ltd v Hope [2009] EWCH 2810 (Ch) at [93]

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Rich J {High Court of Australia}

 

“It is not the purpose of the provision to enable the destruction of any substantive right to pensions, and an exercise such is apprehended would be not unlike a fraud on a power

Metropolitan Gas Co v FCT [1932] HCA 58; 47 CLR 621 at 635.

 

Hammond J {New Zealand Court of Appeal}<>  

The notion of a fraud on a power itself rests on the fundamental juristic principle that any form of authority may only be exercised for the purposes conferred, and in accordance with its terms.”

Wong v Burt [2004] NZCA 174, [27]

 

Lord Parker {The Privy Council}

 

“The term fraud in connection with frauds on a power does not necessarily denote any conduct on the part of the appointor amounting to fraud in the common law meaning of the term, or any conduct which could properly be called dishonest or immoral. It merely means that the power has been exercised for a purpose, or with an intention, beyond the scope of, or not justified by, the instrument creating the power”

Vatcher v Paull (1915) A.C. 372 at 378

 

Lord Hatherley {House of Lords}

 

The donee of the power (eg trustee) “must act with good faith and sincerity, and with  an entire and single view to the real purpose and object of the power, and not for the purpose of accomplishing or carrying into effect any bye or sinister object (sinister in the sense of being beyond the purpose and intent of the power”

Duke of Portland v Topham (1864) 11.H.L.C. Cas 32 at 54; [1864] EngR 339; (1864) 11 ER 1242 Portland v Topham [1864] XI HLC 33