Re Gale, decd.; Gale v Gale
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE HARMAN,LORD JUSTICE RUSSELL |
| Judgment Date | 26 January 1966 |
| Judgment citation (vLex) | [1966] EWCA Civ J0126-1 |
| Court | Court of Appeal |
| Date | 26 January 1966 |
[1966] EWCA Civ J0126-1
In The Supreme Court of Judicature
Court of Appeal
From Mr Justice Cross
Lord Justice Harman
Lord Justice Diplock and
Lord Justice Russell
In the Matter of The Estate of William Philip Gale Deceased
In the Matter of The Inheritance (Family Provision) Act 1938
In the Matter of The Intestates' Estates Act 1952
THE APPELLANT (MRS ANNIE GALE) appeared in person.
MR G. T. HESKETH (instructed by Mr Henry E. Goodrich) appeared as Counsel for the first two Respondents, Executors.
MRS MARGARET CHAMBERS (Respondent) appeared in person.
MR J. D. WAITE (instructed by the Official Solicitor) appeared as amicus curiae
This appeal raised a novel point under the Inheritance (Family Provision) Act 1938 which we thought right to direct the Official Solicitor to instruct counsel to argue before us as amicus curiae. All the parties except the first two defendants? who are the executors, declined to instruct counsel. As a result we have had an excellent and most helpful argument from Mr Waite.
It is on record that in the well known case of Rowlls v. Bebb (1900, 2 Chancery, p. 107) Sir Nathaniel Lindley, the then Master of the Rolls presiding in the Court, observed that the point there emerging was due to "the keen eyes of the equity lawyer" (I believe the late Mr Percy Walters). Here the other side of the law returns the compliment, for the emergence of the present point is due to the keen eyes of the common law member of this Court sweeping as with a new broom through sections of an Act administered by the Chancery Judges over the last quarter of a century and that not infrequently in a way which, if the point be good, is not permitted by the Act. Orders have been frequently made over the last quarter of a century giving to a dependent, usually the widow, the income or a fraction of the income of the residuary estate. It seems to me at any rate, prodded thereto by my common law brother, that this was not within the power of the Court.
The point turns on the definition of "annual Income" in Section 5(1) of the Act where it is said to mean "the income that the net estate might be expected at the date of the order when realised to yield in a year". The same section defined "net estate" as meaning the net estate left by the deceased less funeral and testamentary expenses and estate duty. Now under Section 1(1) of the Act as amended in 1952 the reasonable provision that may be made for a dependent must come out of the net estate. Under Section 1(2) provision is to be made "by way of periodical payments" which under Section 1(3) "shall not be at an annual rate which exceeds the annual income of the netestate". Section 3(2) directs that no larger part of the net estate shall be appropriated to answer by its income the maintenance awarded than is sufficient at the date of the order to produce the provision by its income.
The result seems to me to be that it is the executors' duty to value the net estate, as defined, at the date of the order and to estimate the exact yield in income. This represents the maximum amount which can be awarded and the scheme of the Act seems to be that a capital sum to provide by its income the amount of the award is to be set aside so that the rest of the estate may be distributed. If thereafter the income of the appropriated fund be diminished, the deficiency must be made up out of the capital, but if increased, then the surplus will be distributed among the beneficiaries. It seems to me to follow first that the periodical payments must he payments of "X" pounds a year and not a variable fraction and that orders like Mr Justice Wynn-Parry's in the present case, where he directed that the whole of the income of the net estate be paid to the widow, were not authorised by the statute.
The facts may be shortly stated. The testator by his will left to his widow the right to occupy a house on payment of the net outgoings, also the furniture of the house and an annuity of £2. 10s.0d. a week. The rest of the estate he gave as to three-quarters to his three sons and the remaining one-quarter to his two daughters. These are the defendants to the action and none of them is a dependent within the meaning of the Act. He made his will in 1942 but did not die until 1954, by which time his estate had considerably increased: he did not alter his will. His estate was sworn for probate at a net value of about £18,000 and it is agreed that the net estate for the purposes of the Act is £16,000 or thereabouts. The widow made application to the Court under the Act, and on the 6th March 1957 Mr Justice Wynn-Tarry made an order expressed to be made pursuant to the Act that the will should have effect as ifthe whole of the income of the net estate had been bequeathed to the plaintiff until her remarriage. There was no appeal from that order which, whether made with jurisdiction or not, must he binding between the parties. Indeed nobody suggested that we should go back into the past. No attempt was made to value the net estate or to ascertain the annual income, as the Act prescribes, and this was unfortunate in the present case owing to the circumstance that most of the testator's property was tied up in houses then producing veiw low rents owing to the Rent Restriction Acts. If the annual income had been estimated as the Act dictates, it might have been done I suppose by taking 4 per cent, of £16,000, which is £640 a year. In fact the residuary income at that time was about £500 a year so that what the widow then got under the order was well within the allowed amount, and this state of things ruled up to the year ending March 1950, but in the next year, owing no doubt to the release of the houses from the operation of the Acts, the income nearly doubled and has remained at over £1,000 ever since. Under Mr Justice Wynn-Parry's order the widow took the whole of this increase, which of course would not have happened if she had been merely given the annual income of the net estate as valued, namely, £640 a year or so. The result has been that at the end of 1959 the executor sons, the first and second defendants, issued a summons in the proceedings for a variation of Mr Justice Wynn Parry's order under Section 4 of the Act. The variation may be made on the ground that "a substantial change has taken place in the circumstances of the dependent". This came before Mr Justice Cross on the 19th March 1964, when he said this, after citing Section 4(2), on page 6: "Obviously the song are both trustees and beneficially interested. What they say is that a substantial change has taken place in the circumstances of the dependent. Oddly enough, it does not seep that there has yet been any case under this section but itseems to me that in this case it can fairly be said that a substantial change has taken place in the circumstances of the dependent since the date of the order because at the date of the order she was in receipt of an income from the estate and the net income of the estate was in the order of between £500 and £600 a year perhaps and she had no capital, whereas now the net income is over £1,000 a year and she has £6,000. So there is no doubt to my mind that a change has taken place". It is clear, therefore, that Mr Justice Cross saw nothing wrong in Mr Justice Wynn–Parry's order. The reference to £6,000 is to savings made by the widow out of her income in recent years. The Judge then considered what would be a suitable sum as provision for the widow and came to the conclusion that £600 was the right sum. He made this reducible to £500 so long as the widow received the income of a house, belonging to the estate but lived in by her daughter, direct from the daughter. It is against this that the widow appeals but she gives no ground for her appeal except that she feels "morally entitled" to the...
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APZ (by his litigation representative MC) v AQA and another
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