Oatley & Ors v Oatley & Powney [2014] EWHC 1956 (Ch)

22 April 2014

Christopher was instructed by Thrings in Oatley & Ors v Oatley & Powney (2014) to act on behalf of the minor and unborn beneficiaries of a settlement, where the claimant trustees sought rectification. The case was heard over three days in the Chancery Division in London.

The claimants operated a mixed farming business through a family company and in 1985 a number of shares in that company had been settled into trusts. The claimants were also shareholders. In 1994 a further settlement was proposed to hold the shares and prevent any shareholders calling for the break up of the company. The arrangement included a shareholders agreement whereby the claimants agreed to execute wills leaving their shares to the new settlement.

When the 10-year tax charge on the settlement was considered the claimants discovered that they had been excluded from the class of beneficiaries. The claimants argued that the settlement as drafted did not implement their parents’ intention to benefit them and sought rectification.

Racal Group Services Ltd v Ashmore [1995] S.T.C. 1151, Allnutt v Wilding [2007] EWCA Civ 412, [2007] B.T.C. 8003 and Day v Day [2014] Ch. 114 considered.

Asplin J held that it was clear that the intention of the settlement was to benefit all the members of the family, including the claimants, as well as keeping the family company together. Rectification was granted.