Trustee’s appointment set aside for undue influence

MacKay v Wesley [2020] EWHC 3400 (Ch)

In 2003, Mrs Nicola MacKay signed a deed of appointment and retirement in relation to a settlement that, unbeknownst to her, was the subject of a “round the world” Capital Gains Tax (CGT) avoidance scheme that she learned in 2011 had incurred a tax liability of £1.6 million. She sought to set aside her appointment as trustee before the High Court on the grounds of undue influence, mistake, non est factum and lack of capacity. Deputy Master Henderson refused her claim on all four grounds, in part because her appointment as trustee was not an act carried out by her that she herself could seek to set aside. On 14 December 2020, however, new High Court Judge Mr Justice Meade allowed the appeal, considering that her appointment – or rather, her acceptance of the appointment – should be set aside on the ground of undue influence exerted over her by her father, the defendant. This appeal provides an important clarification of the nature of trusteeship and the process by which trustees are appointed.