In the recent case of Gelber v Sunderland Foundation and others [2018] EWHC 2344 (Ch), [2018] All ER (D) 31 (Sep), the High Court granted new powers to trustees under the Trustee Act 1925 (the “Act”).

Where the trust document does not give certain powers to the trustees, section 57 of the Act allows the court to grant management or administration powers to them if the need is expedient and it can also dictate how any authorised sums of money should be used.

This case involves Blenheim Palace (the “Palace”) which is held for the Duke of Marlborough under a Parliamentary Settlement. Under a separate and later settlement, offshore resident trustees hold nearby land on trust to pay the income, and appoint capital, to the Duke.

In May 2018, the nearby land received planning permission which would greatly increase its value; but on the condition that 70% of the land’s development value was paid to a charity to maintain the Palace. Unfortunately, the trustees did not have power under the trust to make this payment. A separate issue was that the settlement did not permit a sole trustee to be appointed.

The High Court can use its section 57 jurisdiction to allow a specific transaction or wider power based on a test of expediency which involves something “advantageous” or “beneficial” for the trust as a whole; rather than for specific beneficiaries. In this case, the payment of £40 million of trust assets to charity was allowed because it would significantly increase the trust’s net assets and the beneficiaries would benefit from money spent on the Palace by the charity.

The court usually uses its section 57 jurisdiction in relation to buying, investing, selling or mortgaging land; rather than appointing or replacing trustees. It decided that to do this involves a disposition of trust assets which was included in the court's discretion. Therefore, the trustees were permitted to appoint a new trustee, being a sole corporate trustee rather than a trust corporation, as there were strong arguments in favour.

This case is interesting as the court used its powers under section 57 to appoint a new trustee and to make a substantial payment to charity. It is the first time that an English court has used its jurisdiction under the Act to appoint or replace a trustee and demonstrates how the powers of trustees may be expanded in the future under section 57.