Lord Hylton's Settlement, Re (Barclays Bank Ltd v Jolliffe)
| Jurisdiction | England & Wales |
| Date | 1954 |
| Court | Court of Appeal |
Trust and Trustee - Scheme to avoid tax - Jurisdiction of Chancery Court to sanction - Compromise - Protected life interest - Construction summons - Decision of court of first instance that protected life interest not determinable - Appeal - Compromise of appeal - Jurisdiction of Court of Appeal to sanction compromise varying beneficial interests. - Settlement. Revenue - Tax avoidance scheme. Court of Appeal - Jurisdiction - Compromise of appeal - Variation of beneficial interests.
Under a settlement made in 1923 the income of a trust fund was payable to a tenant for life until some act or event should happen whereby the income would become vested in or charged in favour of some other persons, in which event discretionary trusts would come into operation in favour of the tenant for life, his wife and issue. By clause 10 of the settlement it was provided that, after the death of the tenant for life, the trust fund was to be held in trust for the issue of the tenant for life in such shares and with such gifts over
as the tenant for life should by deed or will appoint, with ultimate trusts in default of appointment for the children of the tenant for life at 21 or marriage. The tenant for life had had three children, and by an appointment made in 1951 he appointed the whole trust fund and the income thereof in favour of his eldest son, if he should attain the age of 21 years. The eldest son attained the age of 21 in 1953 and the tenant for life requested his trustees to pay the whole trust fund to the eldest son. The tenant for life's two younger children were still infants“and with such provisions for their respective advancement (either overreaching the interests prior to this power or not) and maintenance and education and otherwise in such manner for the benefit of such issue”
The trustees of the settlement took out a summons to have the effect of clause 10 of the settlement and the appointment determined. Harman J. declared that the tenant for life had no power to appoint the whole fund to his eldest son. The eldest son appealed on the ground that Harman J. had misconstrued clause 10.
The Court of Appeal was asked to sanction the compromise of the appeal on the terms that the trustees should raise out of the trust fund a sum of £5,000 and hold that sum upon trust for the benefit of any future wife...
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