Duhaime's Law Dictionary


Saunders v. Vautier, Rule in Definition:

The terms of a trust (eg. will) can be terminated if all beneficiaries of the trust, being of full legal capacity, consent.

Related Terms: Gift Over

Named after the June, 1841 case Saunders v Vautier, over Richard Wright's estate between his nephew Daniel Wright Vautier and executors John and Thomas Saunders.

The rule: If a trust is set up to endure for a period of time, yet the beneficiaries, all being of the age of majority, and unanimous, may have the trust collapsed and the proceeds disbursed.

In Buschau v. Rogers Communications Inc., Justice Deschamps of the Supreme Court of Canada described the import of the Rule in Saunders v Vautier:

"... as allowing beneficiaries of a trust to depart from the settlor’s original intentions provided that they are of full legal capacity and are together entitled to all the rights of beneficial ownership in the trust property."

In the 1987 edition of Underhill and Hayton Law Relating to Trusts and Trustees, the rule in Saunders and Vautiers is stated in these words:

In Kos v. Dobrowolsky, Justice Brown of the Ontario Superior Court of Justice attempted a consolidation of the rule as follows:

"If there is only one beneficiary, or if there are several (whether entitled concurrently or successively) and they are all of one mind, and he or they are not under any disability, the specific performance of the trust may be arrested, and the trust modified or extinguished by him or them without reference to the wishes of the settlor or the trustees."

"The rule allows the beneficiaries of a trust to depart from the settlor’s original intentions provided that they are of full legal capacity and are together entitled to all the rights of beneficial ownership in the trust property....

"The narrow statement of the rule is this: where there is an absolute vested gift made payable at a future event, with a direction to accumulate the income in the meantime and pay it with the principal, the court will not enforce the trust for accumulation in which no person has any interest but the legatee....

"The broader statement of the rule is this: if there is only one beneficiary, or if there are several (whether entitled concurrently or successively), and they are all of one mind, and he or they are not under any disability, the specific performance of the trust may be arrested, and the trust modified or extinguished by him or them without reference to the wishes of the settler or the trustees…It is this exclusive ownership of rights of enjoyment which connects the narrower and the broader statement of the rule; the broader statement is a logical deduction from the reasoning behind the narrower.

"Absolute entitlement by the beneficiaries to the trust property is an essential element to permit the application of the rule in Saunders v. Vautier."

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