Law Report: Blenheim estates can be varied: Hambro and others v The Duke of Marlborough and others - Chancery Division (Mr Justice Morritt), 16 March 1994

The court has jurisdiction under section 64 of the Settled Land Act 1925 to authorise a transaction which creates a new settlement of settled land altering the beneficial interest of an ascertained beneficiary of full age and capacity without the beneficiary's consent, provided the transaction would benefit the settled land or beneficiaries under the settlement.

Mr Justice Morritt decided that the court had jurisdiction to authorise the 11th Duke of Marlborough to execute a conveyance of the Blenheim parliamentary estates without the consent of the Marquess of Blandford so as thereby to subject such land to the trusts of another settlement.

In 1705, Queen Anne gave the manor of Woodstock and other property, now represented by the Blenheim parliamentary estates, to the Duke of Marlborough for his victory at Blenheim. By an Act of Parliament in 1706 the settlement of the land was subject to limitations preventing any duke from hindering a subsequent beneficiary from enjoying the estates.

The 11th Duke and the trustees of the settlement had concluded that the Marquess of Blandford, the heir apparent, was not capable of managing the estates and had prepared a scheme for the future management of the estates. The proposed transaction would impose a trust for sale on the land and protective trusts on the marquess's life interest.

The trustees, supported by other persons beneficially entitled under the settlement, applied, under section 64 of the Settled Land Act 1925, to the court to authorise the duke to convey the estates to the trustees of the new trust. The marquess contended that section 64 did not enable the beneficial interest of a person who was sui juris (of full age and capacity) to be varied without his consent and alternatively the 1706 Act precluded the court having jurisdiction to authorise the proposed scheme.

Sir William Goodhart QC and David Rowell (Withers) for the trustees; Robert Walker QC and Tracey Angus (Taylor Joynson & Garrett) for the Marquess of Blandford; Edward Nugee QC (Charles Russell) for the Earl of Sunderland; Judith Bryant (Withers) for Lord Edward Spencer- Churchill.

MR JUSTICE MORRITT said that the submissions that the definition of 'transaction' in section 64 should be given a restricted construction could not be accepted. There was no reason to adopt a restricted interpretation when the transaction might only be carried out if the court considered it for the benefit of the land or the beneficiaries to do so. If that condition was satisfied then there was every reason for giving the words the widest meaning. The conveyance in this case was a transaction. It was a transfer of property which was an 'assurance . . . or other disposition'. The reason for or purpose of the transfer was immaterial.

Section 64 required that the transaction should be one which could have been effected by an absolute owner. It was submitted for the marquess that that excluded any power to vary the beneficial interest of the marquess. All the cases showed that transactions approved under section 64 might vary the beneficial interests of those who could not consent to the proposal because they were not of full age or capacity or because they were unborn or unascertained.

But there was nothing in section 64 to limit the jurisdiction to the interests of such beneficiaries to the exclusion of those who were ascertained and of full age and capacity. So far as jurisdiction was concerned a transaction approved under section 64 might vary the beneficial interest of an ascertained beneficiary of full age and capacity.

That far-reaching effect was qualified by the requirement of the section that such variation must be for the benefit of the settled land or all the beneficiaries under the settlement. Thus the person whose beneficial interest was affected would receive some countervailing advantage either as one of the beneficiaries or as someone interested in the settled land which was being benefited. Accordingly, there was jurisdiction to vary beneficial interests of beneficiaries who were of full age and capacity and who did not consent.

Turning to the entrenching provision in the 1706 Act, the scheme proposed to impose protective trusts on the marquess's life interest and reduced his right to the proceeds of sale of timber. Both were hindrances. Prima facie, therefore, what was proposed was contrary to the entrenching section.

However, it was necessary to consider the inter-relationship of the powers conferred by the Settled Land Act and the entrenching section. Parliamentary estates such as Blenheim had not been specifically excluded from legislation, such as the settled Land Act 1882, which rendered land more marketable by enabling it to be sold. The exercise of a power conferred on the tenant for life by the Settled Land Act 1925 was not prohibited by the entrenching section.

Powers conferred by section 64 on a tenant for life were exercisable by the tenant for life of the estates even if such exercise would 'hinder, bar or disinherit' a subsequent tenant for life from holding or enjoying the estates.