Re Dick. Knight v Dick
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE JENKINS,LORD JUSTICE MORRIS |
| Judgment Date | 04 February 1953 |
| Judgment citation (vLex) | [1953] EWCA Civ J0204-1 |
| Date | 04 February 1953 |
| Court | Court of Appeal |
[1953] EWCA Civ J0204-1
In The Supreme Court of Judicature
Court of Appeal
The Master of the Rolls
(Sir Raymond Evershed)
Lord Justice Jenkins and
Lord Justice Morris
MR G. A. RINK (instructed by Messrs Montagu's and Cox & Cardale, agents for Messrs Snell & Co., Tunbridge Wells) appeared on behalf of the Appellant (First Defendant).
MR H. A. ROSE (instructed by Messrs Hardcastle Sanders & Armitage) appeared on behalf of the Respondent (Plaintiff).
MR JACK HAMAWI (instructed by Messrs Hardcastle Sanders & Armitage) appeared on behalf of the Respondents (all other Defendants).
The Appellant in this case is a daughter and the seventh child of one William Bruce Dick, who died in the year 1905. By the Will of William Bruce Dick (to whom I will refer as "the testator") considerable personal property, in the form of shares in companies and a large residue, was bequeathed in such a way that the youngest of his children, Mrs Minnie Tennant Sherman (who died in 1950 without issue), had certain limited powers of appointment,both in respect to the shares and to the residue. The objects of the powers were her own brothers or sisters and their respective issue; and the testator's Will provided that in default of the exercise of those limited powers or of a valid exercise of those powers the shares — that is the proportions of the testator's shares and of the residue (of the income of which Mrs Sherman had been in enjoyment during her life) — should go by way of accrual to the other like portions the trusts of which on her death were still subsisting.
I think it is unnecessary to elaborate further the trusts of the testator's Will. I must, however, say a word or two about the latter part of Mrs Minnie Sherman's life. She was herself born in February 1877. In the year 1918 she married a Mr Sherman, who was the widower of one of her own sisters. Mr Sherman survived that marriage for but five years and, therefore, from 1923 during the remaining 27 years of her life Mrs Sherman was a widow — as I have said, without any children. The Appellant, Miss Dick, who was six years Mrs Sherman's senior, has never married, but it appears that the two sisters were, by natural affinity and in the circumstances which affected their lives, thrown somewhat closely together, and, indeed, after Mr Sherman's death in 1923, this affinity may be said to have increased. Though the two had separate establishments for some time, in the year 1940 the Appellant, Miss Dick, joined her sister at the latter's house in Cornwall and they lived together there until some two years before Mrs Sherman's death. During those last two years Mrs Sherman lived with two persons for whom she had obviously acquired considerable affection, a Mr and Mrs Claydon. Mr Claydon entered the service of Mrs Sherman in the capacity of gardener and handyman in the year 1926, when he was himself 23 years old or thereabouts.
Three years later Mr Claydon married his present wife, Alice Lucy Claydon, and in 1931 a daughter was born to them, Miss Pamela Claydon, who became the Goddaughter of Mrs Sherman.
That short narrative enables me to state the problem which has been presented to the Court, which is, whether the exercise by Mrs Sherman in her last Will of the power of appointment over residue which I have mentioned in favour of her sister the Appellant Miss Dick constituted what is known to the Courts of Equity as a fraud upon the power. The learned Judge, Mr Justice Wynn-Parry, after a close review of all the circumstances of the case (and let me say at once that, as must almost always be the fact, the circumstances were in some respects of a very special character), came to the conclusion that the exercise was a fraud upon the power, so that the appointment was invalid and ineffectual. Miss Dick has appealed to this Court against that decision.
Now I confess, for my part, that I have found the case one of the most vexing difficulty, and I have been conscious of some vacillation and many doubts during the course of the careful arguments to which we have listened. But so that I may state at once my conclusion, I have on the whole come to the conclusion that I could not hold the Judge wrongly to have determined the issue presented to him. And my doubts have been perhaps the more assuaged by the circumstance that my two Brethren have felt, perhaps with less nervousness than I, that the conclusion reached is the right conclusion.
Before I proceed to such review of the facts as I must in order to justify my answer to the problem presented, let me say, about the law, that I shall certainly make no attempt to make an exhaustive formulation of the principles upon which or the circumstances in which the Court will hold an exercise of a limited power to have been "fraudulent", within the meaning of that expression. We have been, naturally,much referred to a recent decision in this Court of In re Crawshay (the second case of that name involving frauds on a power) reported in 1948, 1 Chancery at page 123. In that case the Judgment of the Court (which was a reserved Judgment) was delivered by Lord Justice Cohen (as he then was); and early in his Judgment he referred to certain propositions which had been accepted by the unsuccessful appellant in that case. It may be perhaps useful that I should refer to them at once. "The six propositions" (says the learned Lord Justice at page 134) "are as follows: (1) One case of a fraud on a power is where the donee of a special power of appointment makes an appointment intended to benefit some person not an object of the power. (2) To establish a fraud on a power it is not necessary to prove a bargain between the donee of the power and the appointee. (3) What the court looks to is the intention or purpose of the appointor in making the appointment. (4) It is not necessary that (a) the appointee should be a party to or know of the corrupt intention or purpose or (b) that the purpose should in fact take effect. (5) The relevant date as at which the intention of the appointor has to be ascertained is the date of the exercise of the power. (6) Evidence is admissible as to the state of mind of the appointor, including statements by the appointor which go to show his or her state of mind at the material date. Such statements may be material though they are not contemporaneous with the date of exercise of the power".
It will be observed that those six propositions are some of them affirmative in form, some negative; some are general in scope, some are particular, and indeed procedural. I do not understand that the learned Lord Justice in those six propositions intended exhaustively to formulate the principles governing frauds on a power or the methods of establishing the allegations of frauds on a power.
The propositions (as I have already indicated) had been put forward in the case by the respondents and accepted by the appellant for the purposes of the argument; and in order to make clear what I conceive to be the real scope and limits of those propositions I will state in brief form what the circumstances were that gave rise to the question in In re Crawshay. They were these. A testator had (as in the present case) disposed of his estate in settled shares among his children, giving in certain circumstances special powers of appointment to the children in favour of other members of his family. One of his daughters, a Mrs Williams, had contracted a marriage with a gentleman of whom the testator violently disapproved, and he therefore provided by codicil that the issue of that marriage should in no circumstances be objects of the exercise of the limited powers given. There were in fact two sons of that marriage, referred to as Eliot and Leslie. It was quite obvious that the whole family regarded this exclusion of Mrs Williams' issue by her husband as being grossly unjust; and the recital of the facts makes it quite plain that the utmost care was taken to see whether somehow or another that exclusion could be circumvented. (I observe that in the event Mrs Williams' own share had to be disposed of by her as though she had no issue, for the marriage with Mr Williams was her only marriage). The advice was sought of eminent Counsel as to the best steps to be taken to achieve the object in view, that is, somehow or another, to contrive that Mrs Williams' share of the corpus of this estate should reach her two boys, Eliot and Leslie; and on pages 138 and 139 of the Judgment is set out a reference to the questions put to Counsel and the advice which that eminent Counsel gave — advice which turned out not to be intention correct. Acting upon that advice, Mrs Williams proceeded then to exercise by Will her power of appointmentin favour of one of her nephews, Jack Crawshay, who was an object of the power and was, at the time of the making of the Will, a boy of some 13 years old. A little later Jack Crawshay's own father proceeded to make his own disposition of his own property; and (again without taking time by going into detail) he clearly brought the greatest possible pressure to bear on his own son to see or to secure that the son would dispose of anything that he took under the exercise of Mrs Williams' power of appointment by transferring it to Eliot and Leslie. And having regard to the unanimous and strong views taken by the whole of the family it is not surprising that the boy, out of natural decency and filial piety, did what was expected of him. It may be added that when Mrs Williams executed a new Will a little later containing a similar appointment in favour of Jack Crawshay she accompanied it by a letter addressed to the boy. It is worth while reading that letter: "'My dear Jack, You will not I am sure misunderstand what I have done with regard to the disposition of money in my Will. It is scarcely to be imagined that any...
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