Re Segelman, Decd
| Jurisdiction | England & Wales |
| Date | 1995 |
| Year | 1995 |
| Court | Chancery Division |
Will - Rectification - Clerical error - Solicitor preparing draft pending testator's instructions on class of beneficiaries - Testator's instructions rendering draft inappropriate - Solicitor failing to amend draft - Whether failure constituting clerical error - Whether rectification to be ordered -
The testator, whose estate was worth some £8m., told his solicitor, when giving instructions for the preparation of his will, that he wished his residuary estate to be used for the benefit of poor and needy members of his family in order to relieve hardship for a period of 21 years and that at the end of that period the estate should be applied in the same way to any poor and needy family members and then to charities at the trustees' discretion. The testator told the solicitor that his secretary and companion would give the solicitor a list of the family members he wished to benefit. The solicitor prepared a draft will, clause 11(a) of which directed the trustees to hold the fund for 21 years from the testator's death for the family members to be set out in a schedule. On his own initiative, the solicitor inserted a proviso to clause 11(a) which provided that if any of the persons set out in the schedule should die during the testator's lifetime or within 21 years of his death “then such issue shall stand in the place of such person and shall be eligible to benefit” under the trust. Clause 11(b) provided, inter alia, for a gift over for distribution among charitable institutions in the event that there were no poor and needy family member eligible to benefit on the expiration of the 21-year period after the testator's death. The testator's secretary and companion subsequently gave the solicitor a list of the relevant family members containing the names of six individuals with, in the case of five of them, the addition of the words “and his issue.” The solicitor failed to appreciate that the proviso to clause 11(a) had become inappropriate in the light of the wording of the list which he incorporated in the draft will as the second schedule. The testator, who was 92 and in failing health, read the draft will but also failed to appreciate the ambiguity in the will caused by the references to issue in both the proviso and the second schedule by which, on one possible construction, the issue of a named beneficiary could only be eligible to benefit if the named ancestor were dead. The testator then duly executed an engrossed draft of the will.
In proceedings seeking (i) rectification of the will by deletion of the proviso to clause 11(a) pursuant to section 20 of the Administration of Justice Act 1982F1 in consequence of a clerical error, (ii) the determination of whether the gifts for the relief of hardship of needy family members were valid charitable gifts and (iii) the determination of whether the gifts in clause 11 were exempt transfers within section 23(1) of the Inheritance Tax Act 1984 as being exclusively charitable: —
Held, ordering rectification of the will, (1) that on its true construction the proviso restricted the family members eligible to benefit by excluding issue while their named ancestor was alive, whereas the evidence showed that the testator's intention was that both the named individuals and their issue should benefit throughout the period of the trust; that the jurisdiction to rectify a will conferred by section 20(1)(a) of the Administration of Justice Act 1982 was not limited to errors in transcribing the intended words of the testator which had to be precisely identified, but extended to cases where the relevant provision had been introduced or not deleted in circumstances where the draftsman had not appreciated its significance or effect; that the solicitor's inadvertant failure to delete the proviso in the light of the wording of the list which became the second schedule could properly be regarded as a clerical error for the purposes of section 20(1)(a) of the Act of 1982; and that, accordingly, the will should be rectified by deleting the proviso (post, pp. 180C, 181G, 182A–C, 183H–184C).
(2) That the class of family members in the second schedule comprised 26 persons at the death of the testator but was likely to be considerably expanded during the 21-year period after his death by the birth of further members who would necessarily be unknown to the testator personally; that the family members named or described in the second schedule, though not as a class “poor persons” within any ordinarily accepted meaning of the expression, were not affluent and might well be in need of financial help from time to time in the future; that therefore the gift for the assistance of poor and needy class members at the trustees' discretion was a gift for the relief of poverty among a class rather than a gift to the individual members of the class; and that, accordingly, the gifts in clause 11(a) and (b) were not to be disqualified as valid charitable gifts by the restricted nature of the class (post, pp. 188A–B, 189F–H).
(3) That the testator would have known that the substantial size of the estate made it likely that the relief of poverty among family members during and at the end of the 21-year period would not exhaust the fund; that on the true construction of clause 11(b) the testator had, by using the words “in the event of there being no such persons eligible to benefit,” intended that a gift over in favour of charitable institutions and charitable purposes should take effect once the primary purpose of the relief of poverty among the poor and needy of the class of persons in the second schedule had been fulfilled; and that, accordingly, since the dispositions of the residuary estate made by clause 11 were for exclusively charitable purposes, they constituted an exempt transfer for the purposes of section 23(1) of the Inheritance Tax Act 1984 and the appeal against the determination that those dispositions were not so exempt would be allowed (post, p. 191A–D).
The following cases are referred to in the judgment:
Compton, In re; Powell v. Compton [
Dingle v. Turner [
Income Tax Special Purposes Commissioners v. Pemsel [
Morris, decd., In re [1971] P. 62; [
Reg. v. Commissioner of Patents, Ex parte Martin (
Scarisbrick, In re [
Sharp's Patent, In re; Ex parte Wordsworth (
Williams, decd., In re [
Wordingham v. Royal Exchange Trust Co. Ltd. [
The following additional cases were cited in argument:
Andrew's Trust, In re; Carter v. Andrew [
Baden's Deed Trusts, In re [
Baden's Deed Trusts (No. 2), In re [
Berkeley, decd., In re [
Bowes, In re; Earl Strathmore v. Vane [
Cohen, decd., In re [
Cohn, In re [
Coulthurst, decd., In re [
Doland's Will Trusts, In re [
Geering, decd., In re [
Gillam v. Taylor (
Guild v. Inland Revenue Commissioners (1993) T.C. Leaflet No. 3365; [
Gulbenkian's Settlements, In re [
Hotchkis v. Mitchell,
Inland Revenue Commissioners v. City of Glasgow Police Athletic Association [
Lipinski's Will Trusts, In re [
Osoba, decd., In re [
Rowntree (Joseph) Memorial Trust Housing Association Ltd. v. Attorney-General [
Whitrick, decd., In re; Sutcliffe v. Sutcliffe [
Action
By a writ issued on 6 May 1993 the plaintiffs, Philip Segelman, Gertrude Sissling, David Segelman, Lawrence Sissling and Maurice Cohen, being five of the six individuals named in the second schedule to the will of Gerald Segelman, commenced probate proceedings as against the defendants, Timothy Douglas White, Annie Vera Farnsworth and Leonard Segelman, being the executors of the will to whom probate was granted, and Her Majesty's Attorney-General, seeking rectification of the will pursuant to section 20 of the Administration of Justice Act 1982 by deletion of the proviso to clause 11(a) of the will.
By a summons issued on 17 December 1993 the plaintiff executor Timothy Douglas White sought the court's construction of clause 11(a) and (b) of the will of...
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1) Michael Brooke and Others v Louise Purton and Others
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Clarke v Brothwood & Others
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Rectification
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Where There's a Will There's a Way: Marley v Rawlings and Another
...3 Beav 245, per Lord Langdale MR, 253.39 See, for example, Wordingham vRoyal Exchange Trust Company Limited [1992] Ch 412; Re Segelman[1996] Ch 171; Bell vGeorgiou [2002] WTLR 1105; Re Price [2006] WTLR 1873; Joshi vMahida[2013] WTLR 859.40 See, for example, J. R. Martyn et al, Theobald on ......