Equiom (ISLE of Man) Ltd v Peter Christian Velarde
| Jurisdiction | England & Wales |
| Judge | Master Dray |
| Judgment Date | 15 June 2021 |
| Neutral Citation | [2021] EWHC 1528 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: PT-2020-000521 |
| Date | 15 June 2021 |
[2021] EWHC 1528 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
PROPERTY, TRUSTS AND PROBATE LIST (ChD)
Rolls Building
7 Rolls Buildings
Fetter Lane
London
EC4A 1NL
Deputy Master Dray
Case No: PT-2020-000521
Clare Stanley QC (instructed by Forsters LLP) for the Claimants
Penelope Reed QC (instructed by Mills & Reeve LLP) for the First Defendant
Rodney Stewart Smith (instructed by Brabners LLP) for the Third Defendant
The Second Defendant did not appear and was not represented
Hearing date: 19 May 2021
Approved Judgment
The dispute in this case concerns the true construction of clause 7 of the Will dated 12 November 2007 of Patricia Moores (“Mrs Moores”). Mrs Moores died on 5 September 2017. Probate of her Will was granted on 13 November 2017.
The Will is governed by the law of the Isle of Man. It is, however, common ground that the relevant law is the same as English law, and I proceed on that basis.
Clause 7 of the Will reads:
“I LEAVE DEVISE BEQUEATH AND APPOINT the whole of my real estate and the rest residue and remainder of my personal estate wheresoever situate and of whatsoever kind of or to which I shall be seised possessed or entitled at the date of my death or over which I shall have any power of testamentary disposition whatsoever … unto my children PETER CHRISTIAN VELARDE MATTHEW JULIAN VELARDE AND REBECCA VELARDE.”
(bold emphasis added)
Mrs Moores' children are the Defendants to the present claim. I refer to them, without any disrespect, by their given/known names.
The Claimants are the trustees of a Settlement dated 11 July 1949, settled by Cecil Moores, the father of Mrs Moores.
By clause 2(c) of the Settlement Mrs Moores enjoyed a special power of appointment in respect of property described as the Patricia Trust Fund. This power could be exercised by deeds revocable or irrevocable, or by will or codicil.
Mrs Moores exercised this power twice during her lifetime.
First, by a Deed of Appointment dated 27 December 1981 (“the 1981 DOA”), expressed to be supplemental to the Settlement, Mrs Moores (then known as Mrs Martin) appointed (with effect from her death) the Patricia Trust Fund between Christian, Rebecca and Matthew. By clause 6 the appointment was expressed to be revocable by deed, will or codicil.
Secondly, by a Deed of Revocation and Appointment dated 20 August 1997 (“the 1997 DOA”), expressed to be supplemental to the Settlement and the 1981 DOA, Mrs Moores revoked the 1981 appointment and instead appointed (from and after her death) the Patricia Trust Fund on trust for Christian and Rebecca in equal shares, omitting Matthew. Again, by clause E the appointment was similarly revocable.
Around the time of the 1997 DOA Matthew was going through a divorce. Christian has suggested that a wish to avoid Matthew's ex-wife making a claim on Matthew's interest under the Settlement was the reason for the 1997 DOA. That may perhaps be so, although a curiosity is that Mrs Moores had made a will in 1993 leaving her residuary estate to her three children equally and no steps were taken in 1997 to revoke or alter that Will (which, I believe, remained in place until the 2007 Will with which I am concerned). The curiosity is all the greater given that I am led to understand that the (current) value of Mrs Moores' estate (which does not include the Patricia Trust Fund) is c.£40 million whereas the (current) value of the Patricia Trust Fund, the subject of the 1997 DOA, is rather less. Why, therefore, the concern about Matthew's share in the latter but not the former?
10 years later Mrs Moores made the Will which is the subject of the present proceedings. The Will was drafted professionally by Dickinson Cruickshank, Advocates & Notaries in the Isle of Man, the firm that had drafted the two DOA. Mr George Moore (spelled in the singular and no relation of Mrs Moores) was instrumental in that regard. He had advised Mrs Moores for a number of years. He knew of the Settlement and the DOAs.
The dispute between the parties concerns the meaning and effect of clause 7 of the Will. Specifically, the issue is whether clause 7 operated to effect a revocation of the 1997 DOA and made a new appointment, giving Matthew an equal share of the Patricia Trust Fund along with his siblings and so diluting their respective shares from one-half to one-third.
The Claimants quite properly adopt a neutral stance. Christian maintains that the 1997 DOA was not revoked. Matthew contends otherwise. Rebecca has not actively participated in the proceedings but she supports Matthew's position.
I heard the trial on 19 May 2021 remotely by Microsoft Teams. The Claimants were represented by Clare Stanley QC, Christian by Penelope Reed QC and Matthew by Rodney Stewart Smith of counsel. I am most grateful to them all for their clear, focussed and helpful submissions, both written and oral.
The trial proceeded without any oral evidence but there are various witness statements in the bundle, including statements from both Christian and Matthew. I have had regard to all the material in reaching my decision, although as I explain below the statements have relatively little bearing on the issue of interpretation before me.
The basic principles of construction in relation to wills broadly mirror those applicable to the interpretation of contractual documents. They are well-known, not in dispute and do not need to be set out at length. In essence the quest is to find the testatrix's intention, this being assessed objectively having regard to the language of the will as a whole read in the light of the relevant factual matrix and with regard to the overall purpose of the instrument and common sense: Marley v Rawlings [2015] AC 129, Sup Ct.
One difference between bilateral contracts and unilateral instruments (such as wills) is that, whereas contracting parties may accept an obscurely drafted provision as a compromise to get a deal done, a person making a will has no interest in obscurity: RSPCA v Sharp [2010] EWCA Civ 1474 @ [32].
Further, the court will lean against an interpretation of a will which renders a provision in it otiose; if there are possible rival meanings, it will prefer that which gives fullest effect to the will and avoids (or at least limits) redundancy: PTNZ v AZ [2020] EWHC 3114 (Ch) @ [45].
Unlike contracts, where evidence of a party's subjective intention is always inadmissible in relation to construction, the position is potentially different in relation to wills by reason of s.21 of the Administration of Justice Act 1982 (which mirrors s.19 of the Isle of Man Wills Act 1985). The statutory provision applies to a will insofar as it is meaningless, ambiguous on its face, or ambiguous in the light of otherwise admissible surrounding circumstances. If any of those conditions is satisfied, extrinsic evidence including evidence of the testator's intention, is admissible to assist in the interpretation of the will.
In this case Ms Reed and Mr Stewart Smith agree that, as regards clause 7 of the Will, the only possible gateway for the application of the statute is the third limb, namely, latent ambiguity arising in the light of the relevant factual matrix. The primary position of each is that clause 7 is not ambiguous but, rather, that its meaning is clear, so that the statute is not engaged. They thus invite me in the first instance to construe the Will without reference to any extrinsic evidence of Mrs Moores' intention and only to have regard thereto if I form the view that, contrary to their contentions (which, of course, lead to diametrically opposing results), the Will is ambiguous. I am content so to proceed.
If I decide that such extrinsic evidence is admissible, both Ms Reed and Mr Stewart Smith contend that the same supports their case, although both acknowledge that the limited material available is of but slender weight in the overall analysis. This is not a case where there is, for instance, a solicitors' note recording a clear discussion of the disputed issue with the testatrix. The will file has been destroyed. I refer to the extrinsic evidence below.
The exercise of a special power of appointment is a question of intention, to be deduced from the instrument in question. There must be a sufficient indication of the intention to exercise: In re Ackerley [1913] 1 Ch 510 @ 514–515; In re Lawrence's Will Trusts [1972] Ch 418 @ 430. However, it is clear from the authorities that there is no need expressly to refer to the particular power or to the property subject to the power; the intention may be deduced from rather more general wording. In In re Ackerley the will read, “I give, devise, appoint and bequeath, all my estate, property and effects, whatsoever and wheresoever, both real and personal, which I have power to dispose of by my will, to my said husband”; this was held to amount to the execution of a special power of appointment. Likewise in In Re Latta's Marriage Settlement Trusts [1949] Ch 490 a will whereby the testator simply gave, devised and appointed all his property to his son was held to operate as a valid exercise of a power of appointment conferred by a marriage settlement. A similar result obtained in In re Lawrence where the will read, “I give devise and bequeath all my estate both real and personal whatsoever and wheresoever … or over which I shall then have power or...
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Equiom (Isle of Man) Ltd v Peter Christian Velarde
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