George Ronan Valentine Wyndham v Pamela Dowager Baroness Egremont & Others
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE BLACKBURNE,Mr Justice Blackburne |
| Judgment Date | 07 August 2009 |
| Neutral Citation | [2009] EWHC 2076 (Ch) |
| Docket Number | Case No: HC09C01548 |
| Court | Chancery Division |
| Date | 07 August 2009 |
[2009] EWHC 2076 (Ch)
Before: Mr Justice Blackburne
Case No: HC09C01548
IN THE HIGH COURT OF JUSTICE CHANCERY DIVISION
Francis Barlow QC and James Rivett (instructed by Farrer & Co LLP) for the Claimant
Hedley Marten (instructed by Farrer & Co LLP) for the Defendants
Hearing date: 24 July 2009
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 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 Justice Blackburne :
In this matter I have approved in exercise of the jurisdiction conferred by section 1(1) of the Variation of Trusts Act 1958 (“the 1958 Act”) an arrangement varying the trusts of a fund referred to as “George's Fund” comprised in settlement known as Lord Egremont's 1969 Settlement (“the 1969 Settlement”) which was created by a deed dated 28 February 1969 and deeds supplemental thereto. I did so at the conclusion of counsels' submissions on 24 July 2009 and indicated that, in view of the matters raised in the course of argument, I would set out briefly in writing my reasons for giving that approval. This I now do.
The claimant, George Ronan Valentine Wyndham (“George”), after whom the fund in question is named and who has appeared before me by Mr Francis Barlow QC and Mr James Rivett, is the only son of John Max Henry Scawen Wyndham, Second Baron Egremont (“Lord Egremont”). George attained his 26 th birthday on 31 July 2009. He is unmarried.
George's Fund, which I shall refer to simply as “the Fund”, consists of investments, cash, life policies, land in Cumbria and a great deal of agricultural and other land—indeed the major part of the Wyndham family estate—at Petworth in West Sussex. It is worth many millions. Petworth House was made over to the National Trust by Lord Egremont's great-uncle in 1947. Petworth—the house and estate—has been the family seat since it came into the ownership of the Wyndham family in the 18 th century and, traced through the female line, has been in the ownership of Lord Egremont's ancestors for many generations before that. It is where Lord Egremont and his family still live. It is this fact among others that has led to some of the terms of the arrangement which I was asked to approve. Before coming to those terms, there is a little more history that I should relate.
The barony of Egremont was created in 1963. The first holder of the barony was the present Lord Egremont's father, George's grandfather. In 1967, the First Baron Egremont inherited the barony of Leconfield. In so doing he became the Sixth Baron Leconfield so that the present Lord Egremont is also the Seventh Baron Leconfield. The barony of Leconfield was created in 1859. The first holder of the barony was himself descended from persons who had held the earldom of Egremont which, however, became extinct upon the death in 1845 of the first Lord Leconfield's cousin. So the names of Egremont and Leconfield have long been associated with Petworth and the surrounding estate.
I do not need to trace the various instruments by which the trusts had been established upon which the Fund had come to be held by the time of the hearing before me to approve the arrangement varying them (“the pre-arrangement trusts”). It is sufficient to note that they start with the 1969 Settlement (itself the result of the exercise of a power of appointment contained in an earlier instrument) and end with a deed dated 18 July 2008 (“the 2008 Deed”). Those trusts were as follows:
1. (i) the Fund was held in trust for George during his lifetime;
2. (ii) if George should be living on the Vesting Day the Fund would thereupon vest in him absolutely;
3. (iii) the Trustees had power at any time or times before the Vesting Day to transfer the Fund to George absolutely or to apply the same for his benefit in such manner as they with his consent should think fit;
4. (iv) subject as aforesaid the Fund was held upon such trusts for the benefit of George's children and remoter issue as he by deed or deeds revocable or irrevocable executed before the Vesting Day should appoint or if he should die before then as he by will or codicil should appoint;
5. (v) subject to and in default of appointment the Fund was held on trust for George's eldest or only son living on the Vesting Day or if his eldest or only son should have died before the Vesting Day then on trust for such son's eldest or only son living on the Vesting Day;
6. (vi) if the foregoing trusts should fail or determine the Fund was to devolve on George or his personal representatives.
Paragraph (vi) of the above summary—the ultimate trust—needs more explanation. As a result of various appointments, the Fund became absolutely vested in George on his 18 th birthday but on to that absolute interest various trusts had been engrafted which, in the events that have happened, were those summarised at paragraph (i) to (v) above by the time of my approval of the arrangement. The ultimate trust takes effect therefore under the rule in Hancock v Watson [1902] AC 14.
For the purpose of the pre-arrangement trusts the expression “Vesting Day” had been redefined by the 2008 Deed to be the day on which should expire the period of 20 years from the death of the last survivor of the issue, whether children or more remote, of His late Majesty King George V living on 20 May 1940. (The choice of Royal Lives by reference to that date derived from the terms of the 1969 Settlement which itself derived from the exercise of a power of appointment contained in an earlier instrument.)
Under the pre-arrangement trusts the only living beneficiary is George. He is entitled to: an immediate life interest, and an absolute interest in capital if he is living on the Vesting Day (as defined by the 2008 Deed); the right in the meantime to be considered for a capital advance; and the ultimate trust if he should die before the Vesting Day leaving no son or grandson living on the Vesting Day. Given the ages of the remaining Royal Lives in being under the definition of “the Vesting Day” contained in the 2008 Deed, the youngest of whom (HRH Princess Alexandra) is presently 72, those trusts will inevitably come to an end in the not too distant future and, since George is only 26, in all likelihood in George's lifetime.
The arrangement varying the trusts of the Fund is designed to achieve two aims: (1) to ensure, in accordance with George's wishes, that the ancestral estates at Petworth continue to be attached to the two baronies and thus to devolve for as long as possible down the senior male line and (2) to defer, by an extension of the applicable trust period, the very considerable tax charges which under current legislation—absent the arrangement—will arise on the termination of the pre-arrangement trusts and which could only be met by the sale of a significant part of the ancestral lands as the major constituent of the Fund.
With those objectives in mind the arrangement has involved the following modifications to the pre-arrangement trusts:
(i) the redefinition of “the Vesting Day” as the day on which expires the period of 21 years after the death of the last survivor of the issue of His late Majesty King George V and the issue of George's great-grandfather, the Fifth Baron Leconfield, living on the date of the order approving the arrangement (in the event 24 July 2009);
7. (ii) the deletion of the contingent capital trust in favour of George (being the trust summarised at (ii) of paragraph 5 above);
8. (iii) the substitution for the default trust in favour of George's son or grandson of a default trust of the Fund (and also of the income thereof in the meantime) in favour of that one of George's male issue in the male line who shall be living on the Vesting Day and then hold the baronies of Egremont and Leconfield;
9. (iv) the addition of a default power of appointment of the Fund and the income thereof among the male issue in the male line of the Fifth Baron Leconfield (other than the present Lord Egremont) exercisable by the trustees with George's consent during his lifetime and otherwise at their discretion; and
10. (v) the addition of a default trust of the Fund (and also of the income thereof in the meantime) in favour of that one of the Fifth Baron Leconfield's male issue in the male line (other than the present Lord Egremont) who shall be living on Vesting Day and shall then hold the baronies of Egremont and Leconfield or the barony of Leconfield.
The ultimate trust is, as before, for George and his personal representatives under the trusts of the 1969 Settlement and supplemental deeds.
The proposed variation, if it is to be approved by the court under section 1(1), must be for the benefit of the only other class of beneficiaries potentially entitled under the pre-arrangement trusts, namely George's future eldest or only son living on the Vesting Day and, if he should have died by then, the eldest or only son living on the Vesting Day of George's eldest or only son. This very restricted class, which is currently unborn, is represented by the defendants who are the trustees of the Fund in their capacity as trustees of the 1969 Settlement. They have appeared before me by Mr Hedley Marten.
Mr Marten has submitted, and I agree, that the variation to the pre-arrangement trusts brings two very clear benefits to the unborns. The first is the elimination of the likelihood, given George's young age and the...
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