Barclays Bank Trust Company Ltd (Claimant) Sylvia Theresa Newton Mcdougall (First Defendant) Jean Reginald Henri Pierre Beauprez (Second Defendant) Jacques Roland Louis Beauprez (Third Defendant) Colette Louise Agnes Davis (Fourth Defendant) Pamela Sybil Rattle (Fifth Defendant) Graham Stephen Brown (Sixth Defendant) Elizabeth Caroline Lyle (Seventh Defendant) David John Picot (Eighth Defendant) Arthur Rodney Amy (Ninth Defendant)
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE RIMER |
| Judgment Date | 27 June 2000 |
| Judgment citation (vLex) | [2000] EWHC J0627-8 |
| Docket Number | HC00 00759 |
| Date | 27 June 2000 |
| Court | Queen's Bench Division (Administrative Court) |
[2000] EWHC J0627-8
IN THE HIGH COURT OF JUSTICE
(CHANCERY DIVISION)
Royal Courts of Justice,
Strand,
London. WC2A 2LL.
The Honourable Mr Justice Rimer
HC00 00759
The Claimant was unrepresented.
MR J McDonnell QC (Instructed by DJ Freeman, 43 Fetter Lane, London) appeared on behalf of the Second, Fourth and Fifth Defendants.
MR R CHAPMAN (Instructed by Furley Page Fielding & Barton) appeared on behalf of the Third Defendant.
MISS A MASON (Instructed by Payne Hicks Beach, 10 New Square) appeared on behalf of the Sixth and Seventh Defendants.
JUDGMENT (As Approved)
Tuesday, 27 th June 2000.
This is a Part 8 application raising a question of construction arising under a settlement dated 20 th March 1950. The settlor was Roland Field and he and Barclays Bank Limited were the original trustees. In 1970 Barclays Bank Trust Company Limited ("Barclays") became the sole trustee and it is the claimant.
By the settlement the settlor settled a fund on trust for the benefit of his four children, who were described as "the Life Tenants". The settlement was to operate during a "Trust Period" which was defined as "the period between the date of the settlement and the death of the survivor of the Life Tenants". By clause 3 the settlor directed that the trustees were to accumulate the income of the fund until 20 th March 1955 or his earlier death. The trustees were then to divide the fund into four equal parts, each of which was to be held on trusts for each of the four life tenants respectively. The income of each part was to be held on protective trusts for the life tenant for life and after his or her death, and during the trust period, the income was to be held on protective trusts for his or her children, save that if the life tenant died leaving fewer than three children only one third of the income was to be held on protective trusts for any child or children and the balance was to be held on protective trusts for the surviving life tenants.
The settlor's four children were Roland, Doris, Vera and Sybil. At the date of the settlement Roland had two children, Aubrey and Sylvia (now Sylvia McDougall, the first defendant) . Doris was, and remained, childless. Vera had three children, Jean Reginald (the second defendant) , Jacques (the third defendant) and Colette (now Colette Davis, the fourth defendant) . Sybil had one child, Pamela (now Pamela Rattle, the fifth defendant) . The second, fourth and fifth defendants were represented by Mr McDonnell, QC. The third defendant was represented by Mr Chapman. These four defendants are in the same interest and Mr McDonnell and Mr Chapman made common cause.
No further grandchildren were born after the date of the settlement. Aubrey died on 5 th March 1973, intestate and without issue. On 1 st February 2000 a grant of his unadministered estate was obtained by Graham Brown and Elizabeth Lyle, who are respectively a partner and assistant solicitor in Payne Hicks Beach, solicitors. They are the sixth and seventh defendants and were represented by Miss Mason.
On 21 st June 1980 Sylvia McDougall assigned her reversionary interest or interests in the capital and income of the property subject to the trusts of the settlement to the trustees of a settlement she had made on 11 th January 1980. The present trustees of her settlement are David Picot and Arthur Amy, the eighth and ninth defendants.
The last surviving life tenant was Vera who died on 11 th April 1998 when the trust period came to an end and clauses 9 and 10 of the settlement came into play. They provide as follows:
10. SUBJECT to all the trusts hereinbefore declared and to the powers herein contained or by law conferred on any person and to any and every exercise of such respective powers the Trust Fund shall vest in the survivor of the life tenants absolutely."
"9. FROM and after the end of the trust period the Trustees shall hold the Trust Fund upon trust for Aubrey … Sylvia … Jean Reginald … Jacques … Colette … and Pamela … and other the children or child of the life tenants hereafter born who have attained or shall attain the age of 21 years and if more than one in equal shares absolutely PROVIDED ALWAYS that if any child of any of the life tenants shall die during the trust period leaving surviving him or her a child or children such child or children shall take (and if more than one in equal shares) the share of the Trust Fund which his her or their parent would have taken if he or she had survived the Trust Period.
The issue which has arisen is whether, following Vera's death, the fund should be divided in five equal shares between the five surviving grandchildren or whether it should be divided in six equal shares between the five grandchildren and Aubrey's estate. At the date of Vera's death the fund was valued at £1,120,727. Pending the determination of the issue it has been provisionally divided into six parts of which interim partial distributions have been made in respect of four parts. Barclays retains the undistributed part of the fund. Mr McDonnell and Mr Chapman have argued for a five way split, Miss Mason has argued for a six way split. The answer to the question turns on whether the gift to Aubrey in clause 9 of the settlement was contingent not only on his having attained 21 years of age but was contingent also on his surviving the trust period. I should mention that by a sensible agreement arrived at with a view to saving costs Barclays has not been represented before me. It is of course neutral as to the outcome of the issue.
Miss Mason's argument is that the gift in favour of grandchildren was subject to only a single contingency, that of attaining 21 years of age. She submitted that by clause 9 the settlor made a conventional disposition of the capital of the fund to a defined and finite class, namely the grandchildren of the settlor, and that the language of the main body of the clause, that is down to the proviso, makes it plain that the only contingency upon which the disposition was made was that the grandchildren should have attained or should attain 21 years of age. In the case of Aubrey he was already 21 at the date of the settlement—he was in fact the only one of the six grandchildren who had attained that age by then—and so he thereupon acquired a vested interest in the fund, with the five other grandchildren acquiring like vested interests later. As the class of the ultimate beneficiaries was a finite class, whose members would all be ascertained by the end of the trust period, there would according to well settled principles be no implication in the gift confining its enjoyment to those who survived the trust period, and the estates of those who did not would also be entitled to share (see, for example, Hickling and Others v Fair and Others [1899] AC 15, at 35 and following, per Lord Davey) .
As to the proviso to clause 9, that provides for a substitutional gift of a grandchild's share in favour of his or her own children if he or she should die during the trust period, and Miss Mason accepted that its effect might be to divest a grandchild of his or her previously vested interest. She submitted, however, that any such divesting could only occur in the event of the grandchild dying during the trust period but leaving children surviving him or her. That has not happened in Aubrey's case; he died during the trust period without leaving children so his vested interest was not thereby divested and his estate remained and still is entitled to a sixth share.
Mr Chapman submitted that the question as to the entitlement of Aubrey's estate cannot or should not be answered by reference only to clause 9 but is required to be answered by construing clause 9 in the context of the settlement as a whole. In principle I agree. His submission was that, so approaching the exercise, there are several indicia in the settlement pointing to the conclusion that it was no part of the settlor's intention that a share of the capital of the fund should devolve on to the estate of a previously deceased grandchild.
Mr Chapman referred first to recital (a) of the settlement which...
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