The Honourable George Ronan Valentine Wyndham v The Right Honourable Pamela Doweger Baroness Egremont, et al [2009]EWHC 2076 (Ch)

The Court was invited to approve an arrangement variation, under the Variation of Trusts Act 1958 s 1(1), in respect of trusts concerning the estates of two baronies. The original trusts were set out in a number of deeds, ending with one dated 18th July 2008. Under the terms of the trust, George, who was the only living beneficiary, had a life interest but that would become absolute if he was living on the vesting day. The deed of 18th July 2008 had re-defined the “vesting day” as being 20 years from the death of the last survivor of the issue of King George V living on 20th May 1940. That person was Princess Alexandra, who was aged 72 at the time of the hearing. As George was only 26, it is likely that the vesting day would occur during his lifetime.

The effect of George becoming absolutely entitled was twofold: it would mean that future issue would not benefit from the trust and also it would trigger a large tax liability (in the region of £3m), which could be raised only by the sale of a large part of the trust property, consisting of ancestral lands.

One part of the arrangement concerned an alteration in the vesting day. The arrangement was for the benefit of the unborns but the issue arose as to whether the alteration of the vesting day was an arrangement which the court could authorise under the VoTA 1958, or whether it was a re-settlement, which it could not.

Blackburne J held that there is no “bright-line test” for determining whether a variation is simply a variation or in fact a resettlement. However, taking guidance from Megarry J in Re Balls Settlement Trusts [1968] 1 WLR 899, where he had said:

“If an arrangement, while leaving the substratum effectuates the purpose of the original trusts by other means, it may still be possible to regard that arrangement as merely varying the original trusts, even though the means employed are wholly different and even though the form is completely changed”

he was able to conclude that there was “no doubt” that this was a variation of the original trusts and not a re-settlement.