PT-2025-BRS-000081 - [2025] EWHC 2128 (Ch)

I can now consider the relevant substantive law. It is clear that, when there is sufficient secondary evidence of what the terms of a lost trust instrument were, the court can direct that the trust fund be held on the terms thus proved. In Hansell v Spink [1943] Ch 396, an assurance policy on the life of a husband was held on certain trusts. When the husband died in 1880, his widow and infant son sued to have the trusts executed, and the assurance company paid the policy proceeds into court.

When the widow died in 1942, the son sought payment of the fund still then in court out to him, claiming to be solely entitled under the trusts. However, by then the trust deed could not be located. All that could be found was a note made by the chief clerk of the court in 1880, summarising the terms of the trust. It was clear that the trust deed had been lodged in court. If accurate, this note showed that the son was indeed solely entitled.

Morton J made the order sought. He said (at 399-400):

“The applicant bases his claim for payment out on the contention that the full note which the chief clerk made on the occasion in question can be relied on as being, in the proved circumstances of the case, sufficient secondary evidence of the material trusts of the lost settlement. There is no question as to the admissibility of secondary evidence, the substantial question being always as to the weight of such evidence when tendered. There is no doubt, here, that the original settlement was actually produced to the chief clerk, and that his note was made with the settlement before him. I am prepared to accept the terms of the settlement as being in the form outlined in the chief clerk's note. Does that, however, necessarily entitle me to accede to the application? In this respect I am fortified by the decision of Uthwatt J. earlier in the year in Perch v. Robertson. That was a case where a settlement and all papers relating thereto had been destroyed by enemy action, the only known factor being the existence of a tenant for life to whom the dividends of the investments constituting the settlement funds had always been paid. There was, however, no certainty as to the trusts of the settlement beyond a recital of its contents contained in a will which the tenant for life had made ten years previously, the settlement on that occasion having been seen by the solicitors who prepared the will. The tenant for life issued a summons asking for a declaration that the investments were held upon the trusts set out in the summons which corresponded to those recited in the will. The learned judge declined to make an order in this form as it would have had the effect of binding all persons interested and so have prejudiced the interests of possible beneficiaries who were not before the court, but (being satisfied as to the facts) made an order that the trustees were to be at liberty, until further order, to hold the said investments on the footing that they were subject to the trusts set out in a schedule to the order, being the trusts specified in the summons as amended by the directions of the judge. This was really applying the well-known principle established by In re Benjamin, where the court, without making any positive order declaring rights, protects personal representatives or trustees by giving them liberty to distribute on a particular footing based on probable inferences. With a fund in court, there is no room for the application of the principle of permissive distribution. The court must take the responsibility of deciding whether to make or to refuse an order for payment out. Here, the court, the custodian of the fund, is asked to make an order for payment of the fund to the applicant out and out. That is going far beyond the principle in In re Benjamin, but the evidence in this case is stronger than that in Perch v. Robertson. The fund has become distributable by reason of the death of the tenant for life, and as I am satisfied that the applicant has established his title to the relief asked, I see no reason why, on principle or authority, he is not entitled to an order for payment out, which, accordingly, I make.”

That was a case where the fund was in court, and the applicant sought its payment out to him as the person absolutely entitled. The court could not order payment out of court unless positively satisfied of his entitlement. The secondary evidence of the trust’s terms contained in the chief clerk’s note was sufficient for the purpose. However, the present case is not the same. First of all, the trust funds are not in court, but in the hands of the deceased’s personal representatives. So, it is not the court’s decision, but theirs. Secondly, here there is no direct evidence of the terms of the trusts affecting the policy. All we have is circumstance.

This case is therefore one of ignorance of essential details affecting the trusts. If the court cannot have its ignorance dispelled, it should not make an order which would have the effect of shutting out a claim by a third party who thereafter finds sufficient evidence to make a claim to the fund or to some part of it. On the other hand, that does not mean that the court is unable to assist those holding the trust assets and not knowing what to do with them.

One way of providing assistance is to order the payment of the funds into court, thereby discharging the fund holders: see the Trustee Act 1925, s 63, and CPR PD 37, paragraph 6. Yet that would not assist Jason, the surviving member of the family. The funds would simply sit in court until an application were successfully made for their payment out.

Another way of assisting is for the court to order that the trustees be at liberty to apply the funds on a certain assumed footing. This is usually known as a Benjamin order, from Re Benjamin [1902] 1 Ch 723. There the court directed the application of gifts by will on the footing that a certain beneficiary, who had gone abroad and not been heard of since, had predeceased the testator.

Such an order protects the personal representatives or trustees from personal liability for misapplication of estate or trust funds, but does not take away or cancel the rights of any beneficiary who can thereafter prove entitlement. In effect it transfers the risk arising from payment from the personal representatives or trustees to the recipient of the estate or trust funds, who can make his or her own decision as to what to do.

Indeed, that was what the court did in the case of Perch v Robertson (1943) 87 Sol Jo 66, 195 LT Jo 72, referred to by Morton J in Hansell v Spink. In Perch v Robertson, a marriage settlement had been executed in 1891. However, the trust deed and other papers were destroyed by enemy action in 1941. The sole surviving trustee was unable to recall the terms of the trust beyond the existence of a tenant for life receiving the income.

The only evidence as to what would happen in remainder consisted of a recital in the tenant for life’s will, which had been professionally prepared. The trustee wished to retire, but his proposed successor would not accept the trusteeship until the trusts were known. This summons was accordingly taken out. Only the tenant for life (plaintiff) and the trustee (defendant) were parties to the proceedings.

Uthwatt J declined to direct that the trustees should hold the trust fund on the trusts so indicated. However, he did make a form of Benjamin order, by directing that the trustees were to be at liberty to administer the trusts on the basis of that recital. That would protect the trustees from personal liability, but would not prejudice the interests of any third party not before the court who thereafter was able to prove an entitlement. Similar relief was granted by Danckwerts J in Re Knapp’s Settlement [1952] 1 All ER 458n.