TRUSTS; MOMENTOUS DECISION; WHETHER THE COURT CAN BLESS A DECISION RETROSPECTIVELY

Representation of X Trust Limited re S and T Trusts [2024] JRC 296

The question was raised as to whether the Court should grant a retrospective blessing application in respect of a decision a trustee has already made and put into effect. Lewin on Trusts, 20th Edition states, at paragraph 39-092, that it appears that the English courts will generally decline a retrospective blessing application. The Royal Court held that there was no reason why it cannot give its blessing retrospectively, but in such cases it will be for the applicant trustee to explain the reason for the delay, which may well be a factor in the Court deciding whether or not a blessing is appropriate

Applying the well-established test, conveniently summarised by the Court of Appeal in Kan v HSBC International Trustee Limited; Representation of Otto Poon Trust [2015] JCA 109, the Royal Court blessed a momentous decision of a trustee. The particular question that arose was whether the Court can and should bless retrospectively bless a trustee’s decision.

Held:

(1) Lewin on Trusts, 20th Edition states, at paragraph 39-092, that: “On occasion trustees seek retrospective approval for an exercise which they have already effected but since the effect of such approval would be to extinguish what might be an accrued claim for breach of trust, it seems that the Court will generally decline to grant it.” The footnote to that passage cites Green v Astor [2013] EWHC 1857 (Ch) at para 41 as authority for that proposition.

(2) In Re Y Trust [2011] JLR 464 the Royal Court blessed a decision of a trustee to make a final division of trust assets, more than a year after the decision had been taken. However, the question of retrospective blessing did not appear to have been argued in Re Y Trust.

(3) There was no reason why the Court cannot give its blessing retrospectively, but in such cases it will be for the applicant trustee to explain the reason for the delay, which may well be a factor in the Court deciding whether or not a blessing is appropriate. As the Court noted in Re Y Trust, in cases where the trustee has already implemented its decision it will have to accept the risk that if the Court declines to bless the decision the reasons put forward by the Court may have an adverse impact upon its ability to defend proceedings subsequently brought in relation to the part of the decision that had already been implemented.

(4) There had been no undue delay by the trustee in this case. On the facts the partly retrospective nature f the application was not an impediment to the Court giving its blessing.