Equiom (Isle of Man) Ltd v Peter Christian Velarde
| Jurisdiction | England & Wales |
| Judge | Ashley Greenbank,Mr Ashley Greenbank |
| Judgment Date | 05 January 2022 |
| Neutral Citation | [2022] EWHC 11 (Ch) |
| Docket Number | Case No: CH-2021-000153 |
| Court | Chancery Division |
[2022] EWHC 11 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice, Rolls Building,
Fetter Lane, London, EC4A 1NL
Mr Ashley Greenbank (sitting as a judge of the High Court)
Case No: CH-2021-000153
Penelope Reed QC (instructed by Mills & Reeve LLP) for the First Defendant
Rodney Stewart Smith, counsel (instructed by Brabners LLP) for the Third Defendant
Hearing date: 24 November 2021
APPROVED JUDGMENT
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Mr Ashley Greenbank (sitting as a judge of the High Court):
Introduction
This appeal is against a decision of Deputy Master Dray dated 15 June 2021 (the “Decision”). It is reported with neutral citation number [2021] EWHC 1528 (Ch).
In that decision, Deputy Master Dray decided that a provision of the will of Mrs Patricia Moores dated 12 November 2007 (the “2007 Will”) had effect to revoke a previous exercise of a power of appointment by Mrs Moores in relation to property under a settlement created by her father, Cecil Moores, dated 11 July 1949 (the “Settlement”). As a consequence of his decision, Deputy Master Dray ordered that the effect of the 2007 Will was that the trustees of the Settlement hold the property for the First, Second and Third Defendants in equal shares.
The Claimants in these proceedings are the trustees of the Settlement. The First, Second and Third Defendants are Mrs Moores's children, Christian Velarde, Rebecca Velarde and Matthew Velarde. I refer to them, without any disrespect, by their given/known names.
The appellant in this appeal is Christian, the First Defendant. The respondent is Matthew, the Third Defendant.
At the hearing, Christian was represented by Ms Penelope Reed QC. Matthew was represented by Mr Rodney Stewart Smith, of counsel. I am grateful to both of them for their very clear and focussed submissions. Ms Reed QC and Mr Stewart Smith also appeared at the hearing before Deputy Master Dray.
Neither the Claimants nor Rebecca were represented before me. The Claimants have quite properly maintained a neutral stance in these proceedings. Rebecca, the Second Defendant, has played no part in the proceedings. In his judgment, Deputy Master Dray suggests that she is supportive of the position taken by Matthew.
The appeal is brought with the permission of Deputy Master Dray.
The 2007 Will is governed by the law of the Isle of Man. It is common ground between the parties that Isle of Man law is the same as English law in all material respects.
Background
I have set out a summary of the background facts below. It is drawn in part from the Decision, but also from the documents that were before the Deputy Master.
The Settlement made by Mrs Moores's father created three funds for his three children. The fund created for the benefit of Mrs Moores is referred to in the Settlement as the “Patricia Trust Fund”. Under the terms of the Settlement, the trustees held the Patricia Trust Fund to accumulate the income until she was 21 or married under that age and thereafter on protective trusts for life. By clause 2(c) of the Settlement, Mrs Moores enjoyed a special power of appointment in respect of property in the Patricia Trust Fund. This power could be exercised by deeds revocable or irrevocable, or by will or codicil. Clause 2(c) provides:
From and after the death of Patricia either before or after attaining the age of twenty-one years the Trustees shall stand possessed of the capital and future income of the Patricia Trust Fund upon trust for all or such one or more exclusively of the others or other of the children or remoter issue of Patricia by any marriage at such age or time or respective ages or times (but so that such children shall take vested interests not later than twenty-one years from the death of Patricia) if more than one in such shares and with such trusts for their respective benefit and such provisions for their respective advancement and maintenance and education at the discretion of the Trustees or any other person or persons as Patricia shall by any deeds revocable or irrevocable or by will or codicil appoint and in default of and subject to any such appointment in trust for all or any the children or child of Patricia who attain the age of twenty-one years and if more than one in equal shares.
Mrs Moores exercised the power by a Deed of Appointment dated 27 December 1981 (the “1981 DOA”). In the 1981 DOA, which is expressed to be supplemental to the Settlement, Mrs Moores divided the Patricia Trust Fund into three separate funds and, with effect from her death, appointed those funds upon certain trusts for the benefit of each of Christian, Rebecca and Matthew. By clause 6 of the 1981 DOA, the appointment was expressed to be revocable by deed, will or codicil.
On 1 June 1993, Mrs Moores made a will (the “1993 Will”). In the 1993 Will, having made various specific legacies and bequests, Mrs Moores left her residuary estate to her three children, Christian, Rebecca and Matthew in equal shares. The residuary gift in the 1993 Will is in the same terms as that in Mrs Moores's later will, to which I refer below, and which is the subject of these proceedings. The 1993 Will does not refer expressly to the 1981 DOA. One of the executors of 1993 Will was Mr George Moore, an Isle of Man advocate. The Deputy Master records in his judgment that Mr Moore advised Mrs Moores over a number of years.
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 appointment made in the 1981 DOA and instead appointed the Patricia Trust Fund, from and after her death, on trust for Christian and Rebecca in equal shares, omitting Matthew. By clause E of the 1997 DOA, the appointment was expressed to be revocable by deed, will or codicil.
On the same date, Mrs Moores made a codicil to the 1993 Will under which she gave Matthew a sum of £700,000 and her loan account and shareholding in a private company.
At the time of the 1997 DOA, Matthew was going through a divorce. In the Decision, the Deputy Master recorded that, in his evidence, Christian had suggested that a wish to avoid Matthew's ex-wife making a claim on Matthew's interest under the Settlement was the reason that the appointment in the 1997 DOA excluded Matthew from any benefit from the Patricia Trust Fund.
Mrs Moores executed two further codicils to the 1993 Will: the first, dated 14 September 1998, made gifts to Matthew and Rebecca of funds in two separate bank accounts; the second, dated 20 October 2002, revoked the bequest to Rebecca that she had made in the codicil of 14 September 1998 and revoked the bequest of £700,000 to Matthew which she had made in the codicil of 20 August 1997.
In 2007, Mrs Moores made the 2007 Will, which is the subject of the present proceedings. The 2007 Will revoked all previous wills and testamentary dispositions (including the 1993 Will). The 2007 Will was drafted by Dickinson Cruickshank, Advocates & Notaries in the Isle of Man, the firm that had drafted the 1981 DOA and the 1997 DOA. Mr George Moore was involved in the preparation of the 2007 Will. He was also one of the executors named in the 2007 Will.
Mrs Moores died in 2017.
The dispute between the parties concerns the meaning and effect of clause 7 of the 2007 Will. It is in the following form:
“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”
The issue in these proceedings is whether clause 7 of the 2007 Will operated to revoke the 1997 DOA and make a new appointment, giving Matthew an equal share of the Patricia Trust Fund along with Christian and Rebecca, and so diluting their respective shares from one-half to one-third.
The decision of Deputy Master Dray
Deputy Master Dray decided that, as a matter of construction of the terms of the 2007 Will, Mrs Moores's testamentary intention was to revoke the appointment made under the 1997 DOA and make a new appointment of the Patricia Trust Fund on the terms of clause 7 of the 2007 Will. His conclusion is at paragraph [70] of the Decision, where he said:
70. For the above reasons, I conclude that on the true construction of the Will, read in the light of the relevant factual matrix, clause 7 operates, both impliedly to revoke the 1997 DOA and also to exercise afresh the power of appointment conferred on Mrs Moores by the Settlement in favour of her three children equally.
He decided, however, that the terms of the 2007 Will were ambiguous, and that he was therefore entitled under s19 of the Isle of Man Wills Act 1985 (which is in the same form as s21 of the Administration of Justice Act 1982) to have regard to extrinsic evidence. Having done so, he found that to the extent that it was of any assistance, the extrinsic evidence supported his interpretation of the effect of clause 7 (Decision [78]).
I will address some of the detail of the Deputy Master's...
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