A real life example of a discretionary trust in operation
His grandparents had placed The Priory, their farmhouse and main property, into a discretionary trust in the early 1990s for tax planning reasons. The couple’s four children were named as the beneficiaries of this trust. Antony Webster died in 1996, but after the death of his father Valentine in 2006 and his grandmother in 2007, Rupert claimed that his grandparents had promised The Priory to Valentine some time ago. This, he claimed, now made the farmhouse his by right of succession.
As such, Rupert brought a claim in proprietary estoppel against the estates of his grandparents, which was dismissed in 2013 by the England and Wales High Court. Rupert unsuccessfully attempted to appeal the decision three times, then entered charges against the property at the Land Charges Registry in an attempt to protect his alleged substantive rights. A court order to remove these charges was successfully obtained in 2014 by the executors of Rupert’s grandparents’ estate – John Penley, the family solicitor, and Rupert’s aunt, Virginia Ashcroft.
Rupert subsequently brought a new claim seeking possession of part of the property, which was struck out in 2015. The judge also issued an injunction preventing Rupert from entering the property, from interfering with the sale or marketing of the property, from making any entry on the property’s title without court permission, or from publishing or using words to the effect that he had an interest in the property or that his permission was required before its disposal.
Rupert attempted to have the injunction varied, but this was refused. The judge then made the initial ECRO against Rupert, restraining him from issuing any claim or application against the executors for two years. Rupert nonetheless lodged three more claims against them, challenging the valuation of the farmhouse, which were also deemed meritless and struck out.
When the ECRO expired, the executors applied for renewal due to Rupert’s actions during the two year period. These included trying to resurrect his original claim, appealing the dismissal of his claims, and issuing new claims over breaches of his human rights during the past two years. The executors also cited the cost of both time and money of Rupert’s actions, as well as the fact that there was no real prospect of these costs being repaid, due to Rupert having already lost his house, office and agricultural business to pay legal costs.
The judge accepted these arguments, stating that Rupert continued to pose ‘a clear and serious risk’ to the claimants, to the new owners of the farmhouse and to the administration of public justice, and extended the ECRO to March 2019.
The story serves as an example of the power of discretionary trusts to protect assets from younger generations, if needed.