Earl of Balfour v Keeper of the Registers of Scotland and Others
| Jurisdiction | England & Wales |
| Judge | LORD BINGHAM OF CORNHILL,LORD HOFFMANN,LORD HOPE OF CRAIGHEAD,LORD CLYDE,LORD RODGER OF EARLSFERRY |
| Judgment Date | 06 November 2002 |
| Neutral Citation | [2002] UKHL 42 |
| Docket Number | No 1 |
| Court | House of Lords |
| Date | 06 November 2002 |
[2002] UKHL 42
HOUSE OF LORDS
Lord Bingham of Cornhill
Lord Hoffmann
Lord Hope of Craighead
Lord Clyde
Lord Rodger of Earlsferry
And Others
My Lords,
I have had the advantage of reading in draft the opinions of my noble and learned friends Lord Hope of Craighead, Lord Clyde and Lord Rodger of Earlsferry. I am in full agreement with them, and for the reasons which they give would allow the appeal and make the order which Lord Hope proposes.
My Lords,
I have had the advantage of reading in draft the opinions of my noble and learned friends Lord Hope of Craighead, Lord Clyde and Lord Rodger of Earlsferry. For the reasons which they give, I too would allow the appeal and make the order which Lord Hope proposes.
My Lords,
This is an appeal from an interlocutor of an Extra Division of the Court of Session (Lord Cameron of Lochbroom, Lord Macfadyen and Lord Sutherland) refusing the prayer of a petition in which the appellant had asked the court to pronounce an act and decree declaring him to be the fee simple proprietor of the lands and the barony of Whittingehame and others ("the heritable property"): 2002 SLT 981. The appellant is the Right Honourable the Fourth Earl of Balfour. The heritable property is at present held for him in liferent by the trustees acting under the trust disposition and settlement and two relative codicils of the late Arthur James Balfour, the First Earl of Balfour ("the First Earl"). The application was brought under section 48 of the Entail Amendment (Scotland) Act 1848. Following an amendment which was allowed by the Inner House the statutory basis for the application was extended to include, in the alternative, section 47 of that Act. The application is opposed by the sixth named respondent, who is a descendent of the younger brother of the First Earl, Eustace James Anthony Balfour.
The facts
The First Earl died on 19 March 1930, leaving a trust disposition and settlement dated 1 January 1923 and two relative codicils dated 20 December 1927 and 20 September 1929, all registered in the Books of Council and Session on 24 March 1930. His estate comprised both heritable and moveable property. After making provision for the payment of expenses and estate duty, for the preservation of his books and papers, for the payment of various pensions and for the disposal of any of his pictures and works of art which might be considered to be suitable to be made heirlooms he gave directions in Purpose In the Seventh Place as to what his trustees were to do with the residue of his estate, both heritable and moveable.
The opening part of the directions contained in Purpose In the Seventh Place was in these terms:
"With regard to the whole rest and residue of my means and estate heritable and moveable, real and personal, wherever the same may be situated, I direct my Trustees to hold and retain the titles to the same in their own names as Trustees foresaid, and to deal with the same, subject to the conditions and provisions relating thereto hereinafter written: And to pay to or apply the whole nett revenue or income thereof for behoof of the following series of heirs in their order successively each for his or her liferent use allenarly, videlicet:- My brother, the said Gerald William Balfour in liferent, whom failing, the heir male of the body of the said Gerald William Balfour, in liferent, whom failing, the heir male of the body of my brother Eustace James Anthony Balfour (now deceased), in liferent, whom failing the heir female of the bodies of each of my said brothers Gerald and Eustace in the order of their seniority, in liferent, excluding heirs portioners, whom failing the second and other younger sons of the late Charles Barrington Balfour of Balgonie and Newton Don in the order of their seniority in liferent, whom failing Captain the Honourable Arthur Charles Strutt, Royal Navy, the second son of my sister Evelyn, Lady Rayleigh, in liferent, whom failing the second or other younger son of the then Lord Rayleigh and who at the time may not be in the enjoyment of the honours of Rayleigh or the family estates in the County of Essex, in fee, whom failing my own nearest heirs and representatives whomsoever in fee, and that in the manner for the purposes, with the faculties and subject to the powers conferred by me and after expressed."
There then followed various declarations and other provisions relating to the series of liferent rights created by this provision which it is unnecessary to set out as they are not relevant to this application.
The first codicil dated 20 December 1927 was in these terms:
"Having consulted my brother Gerald William Balfour and the other members of my family interested, and with his and their full approval, I hereby cancel the nomination of my said brother Gerald as the first liferenter or heir ceded to the succession of the rest and residue of my whole means and estate as provided for "In the Seventh Place" in said Trust Disposition and Settlement, and I now instruct that in his place the heir male of his body shall be the person first entitled to succeed thereunder, and I wish to say that I have made this alteration to save my heirs as much Estate Duty as possible: And in all other respects I confirm the foregoing Trust Disposition and Settlement."
The second codicil dated 20 September 1929 was concerned only with the appointment of a named individual to be one of the First Earl's literary executors. It made no reference to, and did not affect in any way, the directions to the trustees which were contained in the trust disposition and settlement or the first codicil.
On 29 October 1931 the trustees acting under the trust disposition and settlement recorded a notice of title in the Register of Sasines for the County of East Lothian in their name in relation to the lands and barony of Whittingehame and others referred to in the trust disposition and settlement. In accordance with the directions set out in Purpose in the Seventh Place they have been holding the residue of the First Earl's estate continuously since the date of the First Earl's death in trust for the heirs male of the body of Gerald William Balfour.
The term "heirs of the body" denotes a limitation of the legal order of succession to heirs in the direct line of descent who are of the blood of the ancestor named, and the term "heir male of the body" means the eldest son or other male heir descended from the person named and connected with such person exclusively through males: Craigie, Scottish Law of Conveyancing, Heritable Rights, 3rd edition, p 531. Gerald William Balfour survived the First Earl and succeeded him as the Second Earl. The first member of the class comprising the heirs male of his body was the Third Earl of Balfour, who was the nephew of the First Earl and the son of the Second Earl. The Third Earl died on 27 December 1968. He was survived by his son ("the appellant"), who was born on 23 December 1925, succeeded him as the Fourth Earl, is also a member of the class and as such is the present liferenter.
There is no rule of law in Scotland which prohibits the constitution of a trust under which trustees remain vested in the fee of the trust estate in perpetuity for the purpose of dispensing the income as directed by the truster: Mackenzie Stuart, The Law of Trusts, p 82. As Lord Thankerton observed in Muir's Trustees v Williams, 1943 SC (HL) 47, 51, the law against perpetuities in Scotland is entirely of statutory origin. The law permits a truster to create a trust for the payment of the income of the trust estate for an indefinite period, so long as he does not infringe the provisions of the statutes which deal with accumulations of income and with the creation of successive liferents. This case is concerned with the statutory restrictions on the creation of successive liferents, and in particular with the restriction which applies to the creation of successive liferents over heritable property.
Prior to the introduction of legislation which was designed to free the property from such restrictions, a disposition of heritable property could be granted which contained a destination to a series of heirs together with clauses which prohibited the alienation of the property by any of them, the contracting of any debt on the security of the property and any alteration in the order of succession. It was open to the person who was in possession of the lands for the time being under a disposition of that kind, which was referred to loosely as an entail, to evacuate the special destination for onerous consideration. But an entail strictly so called was a disposition of lands which contained, in addition to these three cardinal prohibitions, an irritant clause which annulled the act prohibited and a resolutive clause which annulled the right to the estate of the heir who contravened the provisions of the entail: Craigie, p 694.
Provisions which were designed to enable lands to be set free from the fetters of an entail were contained in the Entail Amendment (Scotland) Act 1848, commonly known as the Rutherfurd Act in recognition of the fact that its promoter was the then Lord Advocate, Andrew Rutherfurd. Section 3 of that Act enabled an heir of entail who was of full age to disentail the lands by applying to the Court of Session for authority to execute and record, under the authority of the court, an instrument of disentail. It was recognised that the provisions contained in this legislation would be capable of being defeated if it had remained possible to tie up lands in perpetuity by the creation of a series of liferents. As Lord Mackenzie...
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