Re Hain's Settlement

JurisdictionEngland & Wales
CourtCourt of Appeal
Judgment Date09 February 1961
Judgment citation (vLex)[1961] EWCA Civ J0209-5
Date09 February 1961

[1961] EWCA Civ J0209-5

In The Supreme Court of Judicature

Court of Appeal


The Master of the Rolls (Lord Evershed)

Lord Justice Upjohn and

Lord Justice Pearson

Re Hain's Settlement
Tooth and Another
Hain and Others

MR J.M. PRICE (instructed by Messrs Collissons & Dawes) appeared as Counsel for the defendant appellant, Denis Edward Hain.

MR A. J. BLACKETT-ORD (instructed by Messrs Collissons & Dawes) appeared as Counsel for the infant defendants respondents, F.G. Hain, M. L. Hain, T. E. Haln & K. V. Hain.

MR MARTIN NOURSE (instructed by Messrs Collissons & Dawes) appeared as Counsel for the defendant respondent, C. O. Durrance.

MR S.W. TEMPLEMAN (Instructed by Messrs Collissons & Dawes) appeared as Counsel for the plaintiffs respondents, W. B. S. Tooth and Y. M. K. Hain.


: By a settlement made on the 28th May 1954 the appellant in this Court, Denis Edward Hain, settled a substantial sum of money upon trusts, to some of which I mast now allude. By Clause 2 of the settlement there was defined the phrase "the appointed period", which I need not pause to expound, and there was also defined the expression "the beneficiaries" to mean "such of the following persons as shall for the time being be in existence namely the children and remoter issue of the settlor and the past present or future employees of the settlor". I pause at this point to dispose of one small matters It was suggested (though Mr Price in his very gallant argument did not press the point) that the word "future" in it: context had this result, that anyone now in existence who in the future night become or should become an employee of the settlor would be within the class, a result which, if right, of course would mean that at the date of the settlement and now the class would be quite incapable of ascertainment. But I do not give that meaning to the formula. I think with the learned Judge that it is quite clear that the inclusion of future employees only operates to make them members of the class as and when they are in fact employed and, therefore, of course necessarily ascertained.


Clause 3 is the income provision during the appointed period and It is upon this clause that the debate has turned. It is: "During the appointed period the trustees shall pay or apply the income of the trust fund unto or for the maintenance support or benefit of all or any one or more exclusively of the other or others of the beneficiaries at such time in such shares and upon such terms and conditions and in such manner generally as the trustees in their absolute discretion shall from time to time think fit and so that in the case of any of the beneficiaries who is for the time being under the age of twenty one years the trustees may pay any such income to his or her parent or guardian for the benefit of such person without seeing to the application thereof provided always that the trustees in their absolute discretion may at and for any time or times during the appointed period accumulate any part or parts of the income of the trust fund In the way of compound Interest by investing the same", etc., "and shall hold any accumulations so made as part of the capital of the trust fund but so that the trustees shall have power at any time to resort to any accumulations so made and apply the same as if they were income of the trust fund". Clause 4 is clearly a power introduced by the words "the trustees may at any time" If they think fit pay to any beneficiary any part of the capital of the trust fund. The final trusts of the distribution are In Clause 5, which reads: "At the expiration of the appointed period the capital of the trust fund or so much thereof as shall not already have been paid over by virtue of the last preceding clause hereof shall be distributed among all or any one or more exclusively of the others or other of the beneficiaries in such shares and proportions as the trustees shall in their absolute discretion determine and in default of and subject to any determination to the contrary by the trustees shall be held in trust for all or any of the children or child of the settlor living at the expiration of the appointed period" etc.


Before Mr Justice Danckwerts, as he then was, we understand that the challenge was levelled at the validity not only of Clause 3 but also of Clause 5 on the broad ground that the class of beneficiaries being unascertainable, the clauses were accordingly void. The learned Judge decided both points adversely to the settler, and as regards corpus there is no appeal to this Court; it is, in other words, conceded that Clause 5 is valid. The premise on which that concession has rested is that the provision as to distribution which first occurs in the elapse is but a power. It is expressed, as will be recalled, in language on the face of it imperative – "the capital shall be distributed among all or any one or more.…of the beneficiaries, a formula which corresponds verbally almost precisely with the language of Clause 3 relating to income. But in Clause 5 there is added that in default of the determination under the initial provision there is a gift over. And so it has been conceded that in spite of the imperative "shall" Clause 5 opens with but a power. It is, however, strenuously contended that there can be no such construction of Clause 5 because although there is a reference to the determination of the trustees at their absolute discretion, there is no provision for distributing the income in default of the exercise of the discretion. For my part I must say that I have thought there would be something of force to be said for the view that construing the document as a whole, the settlor in clause 3 when he used the formula, "the trustees shall pay or apply among the class in their absolute discretion", meant no more than he did when he came to the capital clause, that is to say he meant to confer no more than a power, and if there was an absence of the exercise of the power and also of the power to accumulate, there would of course be a trust resulting to the settlor. But the learned Judge concluded that Clause 5 did operate as a trust. We have not heard Mr Nourse and I shall for present purposes therefore be content to assume that the opening language of Clause 3 constituted a trust as distinct from a mere power. I wondered whether it would be disadvantageous to those concerned to leave the matter thus, but I think not for reasons which I will expound briefly hereafter.


Proceeding, however, on the view that we are here concerned with a trust, the question then arises: is the trust valid? I conceive that if the answer be that it is not, it must be shown that It was Invalid at the date of the settlement. Nothing has occurred as a matter of fact which could translate a valid trust into an Invalid trust. It may be that if the trustees have forborne from taking a note of who has come into the class between 1954 and 1960, they have added to some of their present difficulties. But if the trust was valid upon its coming into operation on the ground that the class of beneficiaries was then properly ascertainable, it seems to me quite impossible to say that it has since become invalid because on the evidence of the settlor his memory has somewhat failed in some respects in the interval of time.


Now there can be no doubt, as the...

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