Re Phelps, deceased
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE BUCKLEY,LORD JUSTICE TEMPLEMAN,LORD JUSTICE BRIDGE |
| Judgment Date | 28 June 1979 |
| Judgment citation (vLex) | [1979] EWCA Civ J0628-5 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 1973 P No. 3452 |
| Date | 28 June 1979 |
[1979] EWCA Civ J0628-5
In The Supreme Court of Judicature
Court of Appeal (Civil Division)
On Appeal from The High Court of Justice
Chancery Division
Group B
(Mr. Justice Foster)
Lord Justice Buckley
Lord Justice Bridge and
Lord Justice Templeman
In the Matter of the Estate of Walter Murray Phelps deceased
and
In the Matter of the Trusts of the Will dated 16th July 1907 of Caroline Jaques (Beatrice Phelps Settled Share)
and
In the Matter of the Trusts of the Will dated 6th July 1943 of Beatrice Phelps deceased
and
In the Matter of the Judical Trustees ACT, 1896
and
In the Matter of the Trustee Act 1925
MR. LEOLIN PRICE Q.C. and MR. MICHAEL HART (instructed by Messrs. Bower Cotton & Bower, Solicitors, London EC4A 1HL) appeared on behalf of the 1st Defendant (Appellant).
MR. G.A. RINK Q.C. and MR. P.J.S. RAWSON (instructed by Messrs. S. Farrer & Co., Solicitors, London WC2) appeared on behalf of the 2nd Defendant (Respondent).
MR. G.A. RINK Q.C. and MR. P.J.S. RAWSON (instructed by Messrs. Alexander Chart & Partners, Solicitors, London W.l) appeared on behalf of the 3rd Defendant (Respondent).
MR. ROBERT HAM (instructed by The Official Solicitor to the Supreme Court, London WC2A IJR) appeared on behalf of the Official Trustee.
THE PLAINTIFF was neither present nor represented.
I have asked Lord Justice Templeman to deliver the first Judgment in this case.
This is an appeal from a Judgment of Mr. Justice Foster, which is reported in (1978) 1 Weekly Law Reports, page 1501, and raises a short question of construction on the Intestates' Estates Act, 1952. The question is whether a surviving spouse of an intestate can require the matrimonial home, which is more valuable than the absolute interest of the spouse in the estate, to be appropriated partly in satisfaction of that interest and partly in return for payment of the difference in value between the interest and the matrimonial home.
The intestate died on 10th February 1971. His widow is entitled to £8,750 under the intestacy. The widow gave notice on 5rd June 1972 requiring appropriation of the matrimonial home which was then, and now is, worth more than £8,750. If it is worth, for example £12,000 on the relevant date, the widow requires the personal representatives to convey the house to her, partly in satisfaction of her interest, worth £8,750, in the estate, and partly in return for £3,250 which she will pay in cash.
By section 41 (1) of the Administration of Estates Act 1925 which, by section 41 (9) applies whether the deceased died intestate or not, personal representatives were given a power of appropriation "in or towards satisfaction of any legacy bequeathed by the deceased, or of any other interest or share in his property,… as to the personal representative may seem just and reasonable". Thus the personal representatives could make an appropriation in favour of a beneficiary, though only as the section subse quently provides, with his consent. The personal representatives could also in exercise of the statutory power of sale conferred onthem by section 33 of the Administration of Estates Act 1925, sell any property to a beneficiary and, with his consent, set off against the purchase price any capital sum to which the beneficiary was entitled from the estate. The beneficiary could not, however, require the personal representatives to exercise either the power of appropriation, or the power of sale, in his favour.
By section 5 of the Intestates' Estates Act, 1952, which is entitled "Rights of surviving spouse as respects the matrimonial "home", it was provided that the Second Schedule to the Act shall "have effect for enabling the surviving husband or wife of a person dying intestate… to acquire the matrimonial home". The Second Schedule is also entitled "Rights of surviving spouse as respects the matrimonial home". Paragraph, I (1) of that Schedule, so far asmaterial, provides that "Subject to the provisions of this Schedule, where the residuary estate of the intestate comprises an interest in a dwellinghouse in which the surviving husband or wife was resident at the time of the intestate's death, the surviving husband or wife may require the personal representative, in exercise of the power conferred by section 41 of "the 1925 Act to appropriate the said interest in the dwellinghouse in or towards satisfaction of any absolute interest of the surviving husband or wife in the real and personal estate of the intestate".
In the present case it is conceded that the widow has an absolute interest in the estate amounting to £8,750 and that the widow could, and did, require the personal representatives to exercise the power of appropriation conferred on them by section 41 of the 1925 Act in or towards satisfaction of her interest. It is argued, and Mr. Justice Foster accepted, that a house which is worth £12,000 cannot be appropriated in or towards satisfaction ofan absolute interest worth £8,750. The words "in or towards satisfaction" are only appropriate when the value of the interest is equal to, or exceeds, the value of the dwellinghouse. Those words are not apt to cover the case where the interest would be more than satisfied by the appropriation.
If the matter had rested solely on paragraph I (1) of the Second Schedule, I would have agreed with the learned judge, because paragraph I (1) only enables the widow to require the personal representatives to exercise their statutory power of appropriation and does not entitle her to require them to exercise a power which is partly an appropriation power and partly a sale power.
The decision of the learned judge, however, gives no effect to paragraph 5 (2) of the Second Schedule which, it seems to me, could only have been designed to meet, and does in fact meet, the present case.
By paragraph 5 (2), "The power of appropriation under section 41 of" the 1925 Act "shall include power to appropriate an interest in a...
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