Re Manisty’s Settlement Trusts [1974] Ch 17

Key point

  • Powers cannot be invalid for administrative unworkability, but capricious powers are invalid

Facts

  • Clause 4 of a settlement conferring power gave trustees the discretion to add new beneficiaries, other than a small excepted class
  • It was argued that the power, as an ‘immediate power’ which excepts a class of people rather than including a class of people, was too wide to be valid

Held (High Court)

  • The power was valid

Templeman J

A power cannot be uncertain merely because it is wide in ambit

  • ‘The mere width of a power cannot make it impossible for trustees to perform their duty nor prevent the court from determining whether the trustees are in breach.’
  • Lord Wilberforce spoke of a third class of trusts that are invalid as they are so hopelessly wide as not to form ‘anything like a class’ so that the trust is administratively unworkable, but this does not apply to powers where the court has a more limited function and does not need to execute and administer
  • An immediate power is not too wide

But a capricious power is invalid

  • A power to benefit ‘residents of greater London’  is invalid, it is an ‘accidental conglomeration of persons who have no discernible link with the settlor or with any institution’

Commentary

  • Powers that limit beneficiaries to a class of people are referred to as special powers