Trustees unable to override beneficiaries' wishes under Saunders v Vautier

The High Court refused to approve a proposed sale of shares by trustees that was opposed by the only beneficiaries absolutely entitled to them under the rule in Saunders v Vautier [1841] EWHC Ch J82. Finding that the beneficiaries of two sub-funds were the only persons beneficially entitled to the shares allocated to the respective funds, by virtue of an earlier appropriation made by the trustees, the High Court held that the beneficiaries were entitled to direct the trustees how to deal with those shares.

The case illustrates that where the rule in Saunders v Vautier is held to apply, the trustees cannot act against the directions of the beneficiaries, despite, as in this case, the trustees' belief that the sale would be in the best interests of all the beneficiaries of the trust, including those who opposed it. (Hughes and others v Bourne and others [2012] EWHC 2232 (Ch).)

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