Re Erskine 1948 Trust
| Jurisdiction | England & Wales |
| Judge | Mr Mark Herbert QC |
| Judgment Date | 29 March 2012 |
| Neutral Citation | [2012] EWHC 732 (Ch) |
| Docket Number | HC 11 C 01077 |
| Court | Chancery Division |
| Date | 29 March 2012 |
[2012] EWHC 732 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
The Rolls Building, 110 Fetter Lane EC4A 1ES
Mr Mark Herbert QC sitting as a Deputy Judge of the Chancery Division
HC 11 C 01077
In the matter of the Denys Malcolm Erskine 1948 Trust
Mr Edward Hewitt (instructed by Veale Wasbrough Vizards) for the Claimants
Mr David Rowell (instructed by Veale Wasbrough Vizards) for the 1st and 2nd Defendants
Mr Charles Holbech (instructed by Veale Wasbrough Vizards) for the 3rd Defendant
Hearing dates : 14, 16 December 2011
Approved Judgment
I direct that pursuant to CPR 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version may be treated as authentic
This Part 8 claim concerns the construction of the phrase 'statutory next of kin' in an English settlement made in 1948, and the possible effect of the Human Rights Convention on that construction.
The basic facts are not complicated and are not in dispute. The settlement was made on 10 December 1948 by Denys Malcolm Erskine. The original assets were shares in Associated Hotels Limited and are now represented by a trust fund worth about £3.2 million. The first beneficial trust was in favour of the settlor's daughter Margaret Lucile Erskine (known as Lucile) for life. She married three times and was lastly Mrs Saich. She died on 11 August 2010 without children or other descendants. After her death, the settlement provided a power of appointment exercisable in favour of her children and remoter issue with a trust over in favour of her children. Those provisions have failed, and the important beneficial provisions are clause 1(4) and (5), with Mrs Saich as 'the Beneficiary' :—
'(4) If the Beneficiary shall have no child who or whose issue shall attain a vested interest in the Trust Fund or any part thereof under the trusts powers and provisions hereinbefore declared the Trustees shall hold the Trust Fund or the residue thereof in trust for Denise Elizabeth Grace Erskine the sister of the Beneficiary absolutely provided she has married or attained the age of 30 years
'(5) If the said Denise Elizabeth Grace Erskine shall die in the lifetime of the Beneficiary or before attaining the age of 30 years or previously marrying the Trustees shall hold the Trust Fund or the residue thereof Upon Trust for the statutory next of kin of the Beneficiary at the date of her death on the footing that she died a spinster.'
The settlement is short, and none of its other provisions shed any light on the question which I have to decide.
Looking first at clause 1(4), Mrs Saich's sister Denise attained the age of 30 years, and also married, twice, becoming Mrs Pigott and later Mrs Delaney. But the opening words of clause 1(5) apply, because Mrs Delaney did die during Mrs Saich's lifetime in the early 1980s. So the whole of the trust fund vests in Mrs Saich's statutory next of kin on the footing that she had died a spinster. Now the state of the family at Mrs Saich's death was that she had no children or other issue (as I have mentioned), no living parent and no living siblings. Her sister Mrs Delaney had been her only sibling, and she had left two children, Christopher Richard Erskine Pigott and Stephen Robert Erskine Pigott, both of whom are living and are the first two defendants to this action. They are not the biological children of Mrs Delaney, having been adopted by her and her then husband in 1951 and 1952.
The only question in the case is whether Christopher and Stephen Piggott are entitled to the trust fund as the persons who were Mrs Saich's statutory next of kin at her death, or whether their claims are negated by their having been adopted. If Christopher and Stephen Pigott are not entitled to the trust fund, then it is common ground that the fund vests in a number of cousins, many of whom have not been identified. One of those who have been identified is Fiona Margaret Lady Mottram, a niece of the settlor, and she has been joined as a defendant to represent all the cousins.
All parties appeared before me by counsel, Mr Edward Hewitt for the trustees (who are neutral), the Pigott brothers by Mr David Rowell, and Lady Mottram by Mr Charles Holbech.
The construction of the settlement
Mr Rowell puts his case in two ways. First, as a matter of pure construction, he says that his clients are indeed the statutory next of kin of Mrs Saich. When she died in 2010 all impediments to inheritance by adopted children had been removed by statute, and if Mrs Saich had died intestate and a spinster, Christopher and Stephen Piggott would have inherited her estate. Second, he says that, if he fails on that first basis, the Court should construe the settlement in such a way as to eliminate discrimination against adopted children, by virtue of articles 8 and 14 of the Convention for the Protection of Human Rights and Fundamental Freedoms, and should be guided in this process by the jurisprudence of the European Court of Human Rights. The High Court is itself a public authority for this purpose, and should not entertain a construction which would put the United Kingdom in breach of the Convention.
Mr Holbech submits that the phrase 'statutory next of kin' is given a meaning by statute and, applying that meaning, the adopted nephews of Mrs Saich do not qualify. It is indeed common ground that none of the successive Adoption Acts passed in 1950 and later have any effect on the issue before me, because they expressly do not apply to dispositions made before those Acts came into force, and they therefore do not have any effect on this settlement made in 1948. As to the Human Rights Convention, he submits that the Strasbourg jurisdiction should affect the construction of an instrument only if the disposition is ambiguous, and this one is not.
Looking at the submissions in more detail, Mr Rowell recognizes that the Adoption Acts do not help him. The Adoption of Children Act 1926 had, under section 5, no effect either to confer property or inheritance rights on adopted children or indeed to remove such rights from them. The Adoption Act 1950 did confer inheritance rights by providing in principle that the expression 'child' includes an adopted child, but Schedule 5 to the Act, paragraph 4, provided that this did not affect a disposition made before 1950. The Adoption Act 1976 contained a similar limitation, and that limitation has been preserved in later statutes as well. There is no doubt that the disposition in question in the present case is the 1948 settlement.
But Mr Rowell says that the Adoption Acts are irrelevant. The reason is that they make provision for the effect of words of relationship, such as 'child', 'children' and 'issue', but they do not make provision for next of kin. His clients, he says, are Mrs Saich's next of kin (both on the hypothesis specified in the settlement and generally), and it is unnecessary to examine the process by which that status has come to pass, for instance by their being her sister's children. He pointed out that a trust in favour of the Mayor of London depends on a simple fact of identity. One does not have to enquire how he or she became mayor. An alternative analysis, according to Mr Rowell, is that one looks not only at the relevant facts at Mrs Saich's death but also at the law at that date. In 2010 adopted children were entitled to inherit equally with natural-born children, so they were the statutory next of kin. It would be anomalous to apply 1948 law to 2010 facts.
Mr Holbech adopts a more systematic analysis. The second part of section 50(1) of the Administration of Estates Act 1925 provides a statutory definition of the phrase 'statutory next of kin' :—
'(1) References to any Statutes of Distribution in an instrument inter vivos made or in a will coming into operation after the commencement of this Act, shall be construed as references to this Part of this Act; and references in such an instrument or will to statutory next of kin shall be construed, unless the context otherwise requires, as referring to the persons who would take beneficially on an intestacy under the foregoing provisions of this Part of this Act.'
That requires the court of construction to see who does benefit under an intestacy under the provisions of the 1925 Act, and the beginning of the answer is provided by section 46(1)(v) :—
'(1) (v) If the intestate leaves no husband or wife and no issue and no parent, then the residuary estate of the intestate shall be held in trust for the following persons living at the death of the intestate, and in the following order and manner, namely :—
First, on the statutory trusts for the brothers and sisters of the whole blood of the intestate;…'.
That in turn leads to section 47, which sets out the statutory trusts. To begin with, section 47(1)(i) specifies the statutory trusts for the issue of the intestate :—
'(i) In trust, in equal shares if more than one, for all or any the children or child of the intestate, living at the death of the intestate, who attain the age of twenty-one years or marry under that age, and for all or any of the issue living at the death of the intestate who attain the age of twenty-one years or marry under that age of any child of the intestate who predeceases the intestate…'.
Finally section 47(3) applies the same statutory trusts to any class of relatives of the intestate other than his or her issue.
I should add that the 1925 Act has been amended in several ways, with effect from 1970 so as to substitute the age of 18 years...
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David John Hand and Another v Richard George and Another
...as certainty) for not making such legislation retrospective." 54 More recently the High Court has had occasion to revisit the issue. In Re Erskine 1948 Trust [2012] EWHC 732 (Ch) (' Erskine') concerned a settlement deed made in 1948. The relevant clause provided that the trustees should hol......
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