Re Pilkington's Will Trusts
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE UPJOHN,LORD JUSTICE PEARSON |
| Judgment Date | 24 March 1961 |
| Judgment citation (vLex) | [1961] EWCA Civ J0324-2 |
| Date | 24 March 1961 |
| Court | Court of Appeal |
[1961] EWCA Civ J0324-2
The Master of the Rolls (Lord Evershed)
Lord Justice Upjohn and
Lord Justice Pearson
In The Supreme Court of Judicature
Court of Appeal
MR PETER FOSTER, Q.C. and MR E. BLANSHARD STAMP (Instructed by the Solicitor of Inland Revenue) appeared as Counsel for the appellants, the third named defendants.
MR B.L. BATHURST, Q.C. and MR JAMES CUNLIFFE (Instructed by Messrs Also Stevens & Co.) appeared as Counsel for the respondents, plaintiffs.
SIR MILNER HOLLAND, Q.C. and MR ERIC GRIFFITH (instructed by Messrs Alsop Stevens & Co.) appeared as Counsel for the respondents, the first and second named defendants
: The problem raised by this appeal is, so far as reported authority goes, in large degree novel, as it is novel in form. The Crown have been added as parties for the purposes of this appeal and have, therefore, argued the case before us for the view that what is intended is something outside the scope of the statutory power of advancement contained in the relevant will. That will was made some two months before his death in February 1935 by Mr William Norman Pilkington. It is a will of considerable elaboration, and, after a number of legacies and other provisions, the residue of his estate was left upon trust in equal shares if more than one for all or any of his nephews and nieces, being children of three named brothers, living at his death who should attain the age of 21 years or marry under that age. The gift of residue so expressed was followed by a number of other clauses of considerable elaboration which had the effect of qualifying what appeared to be the absolute gift to these nephews and nieces so that their interests, though remaining contingent on attaining twenty-one, became life interests with final gifts in favour of their children, that is to the testators grand nephews and grand nieces. There were included the usual powers of appointment, of applying income for maintenance and the like. The power of advancement, as it is commonly and briefly called, was incorporated into the will from section 32 of the Trustee Act 1925, and it is, therefore, essential that I should refer at once to the language of the first sub-section: "Trustees may at any time or times pay or apply any capital money subject to a trust, for the advancement or benefit, in such manner as they may, in their absolute discretion, think fit, of any person entitled to the capital of the trust property or of any share thereof, whether absolutely or contingently on his attaining any specified age or on the occurrence of any other event, or subject to a gift over on his death under any specified age or on the occurrence of any other event, and whether in possession or in remainder or reversion, and such payment or application may be made notwithstanding that the interest of such person is liable to be defeated by the exercise of a power of appointment or revocation, or to be diminished by the increase of the class to which he belongs".
It is said that the language which I have read from the Trustee Act 1925 substantially reflects what had become the practice of conveyancers of inserting into settlements or wills powers of advancement, and again I use the convenient label. To what extent that is so is a matter upon which I am not confident that I could express any very firm view, more particularly since I do have in mind what was said by the Master of the Rolls, Sir George Jessol in the case of Lowther v. Bentinck, reported in 19 Equity at page 166. The corresponding power in the will there before the Court was thus! "The testator declared that it should be lawful for the trustees, at any time or times during the life of Francis William Lowther, to levy and raise any part of the trust moneys, stocks, funds, and securities, not exceeding in the whole one moiety thereof, and to apply the same in or towards the preferment or advancement of Francis William Lowther, or otherwise for his benefit, in such manner as the trustees should in their discretion think fit". Mr Cookson in argument before the Master of the Rolls said: "This is not an ordinary advancement clause, such as is found in wills or settlements containing provisions for the benefit of infants". And it is certain that Sir George Jessel's view was that the words of the clause there before him should be given their sense according to the English language. "It seems to me", he said, "that the words 'or otherwise for his benefit' are evidently put in for the purpose of not confining the trustees to preferment or advancement; and therefore, so far from finding any context which restricts the words, I think the context shows that the words could not mean something of the same kind". That is to say, he rejected the view that "or otherwise for his benefit" was to be treated as meaning something ejusdem generis with what might be called, in a strict use of the word, advancement.
Is the transaction then with which we are concerned within the contemplation of that phraseology? I have found this matter one of considerable difficulty. I am conscious that views have been taken about this matter which may have affected many settlements, and it is a subject upon which practitioners in the Chancery Division, I gather, have taken sometimes one view and sometimes another. After, I confess, some changes of view in the course of the argument, I have in the end come to the conclusion that the question now before us, which I have tried to pose, ought to be answered in the negative. I think the question has been formulated most properly and for my purposes most conveniently in the first paragraph of the notice of appeal. The ground for the appeal is stated in this forms "Because the proposed transaction is nothing less than a resettlement of the capital over which it extends upon trusts and with and subject to powers and discretions not contained or contemplated by the testatort's will and not authorised by the power of advancement contained in the said section and because it is irrelevant that the trustees think it for the benefit of the defendant Penelope Margaret Pilkington that it should be so resettled".
It is obviously necessary at this stage that I should say something about the transaction, as I have called it, which is here in question. It has taken this form There is intended to be executed a settlement. It is possible that it has been executed but I understand I am right that it has not yet been executed. It is a settlement made by Colonel Guy Pilkington, who is one of the brothers of the testator and who is the grandfather of the child mentioned in the notice of appeal, to when I will hereafter allude as Penelope. The trustees of this settlement are in fact the same persons as are the trustees of the testator's will, and it recites that the settlor is desirous of making provision for the benefit of Penelope. Penelope was born on the 29th December 1956, so that on the date when this document was exhibited to the affidavit in support of the summons, she was somewhat loss than 2 1/2 years of age. The terms of the settlement proposed to be made, which was incidentally of the sum of £10 in cash, were that the trust money and any other moneys which the trustees might receive should be invested in the usual way and should then he held upon trust so that until Penelope was 21, the income should be available for her maintenance, education and the like. From the ago of 21 to 30 she should be entitled to receive the income, and then on her attaining 30 years of age she was to be entitled to the capital, and there followed provisions so that if she were to die under 30 leaving children, those children would take the capital, and if she did not leave children, then there were trusts over. Clause 9 of this document reads: The power of advancement contained in Section 32 of the Trustee Act 1925 shall apply". I do not intend to attempt any kind of definition by way of limitation or otherwise of the vital language which I have already road from the first sub-section of section 32 of the Trustee Act. But to my mind the power which is conferred by that section contemplates something being done for the advancement or benefit (and I accept entirely what Sir George Jessol said, that the benefit should be construed in the widest sense) of the particular person in question according as that course may seem to be called for by the circumstances at the time, that is at the time when the advancement or benefit is conferred. I would observe from the sub-section that it is intended to deal with capital of the trust fund and to deal with the case of a person who is entitled to some share in the capital of the trust fund which, for one reason or another, he or she cannot at the time touch, either because it is liable to be divested or because her interest is contingent or because it is subject to some prior interest. In those circumstances the sub-section contemplates that subject to the limitation as to amount in the first proviso and to such other limitations as there are, and to which I need not allude, the trustees are entitled to take part of the capital out of the trust fund, to liberate it from the trusts which prevent the person concerned receiving it or enjoying it, and then to make it available or apply it for the benefit of the person concerned; but, as I have indicated and as I construe it, in the light of the circumstances affecting that person as they then exist.
What I have said has, at any rate, the support of the language, which I will not cite, of Lord Justice Pickford in the case of Ro Joicey, 1915, 2 Chancery at page 122. When I look at this settlement it seems to me that it does not, as a matter of...
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