Overview

The rule in Hastings-Bass had been settled law for many years. Trustees and other fiduciaries were able to apply to the court to set aside as void a decision arising from an exercise of their discretionary power which later turned out to have unforeseen or unintended consequences.

Now, in the joint appeals of Pitt v Holt and Futter v Futter, the Court of Appeal has overturned this rule. All trustees and fiduciaries will be affected:

• In the future, beneficiaries will have to make claims against trustees by claiming a breach of a fiduciary duty.

• Consideration of the tax consequences of a transaction is almost certainly part of this fiduciary duty.

• Seeking and acting on professional advice from competent advisors, which later turns out to be incorrect, does not amount to a breach of trust.

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