Re Shephard. Shephard v Cartwright
| Jurisdiction | UK Non-devolved |
| Judge | Viscount Simonds,Lord Morton of Henryton,Lord Reid,Lord Somervell of Harrow |
| Judgment Date | 01 December 1954 |
| Judgment citation (vLex) | [1954] UKHL J1201-1 |
| Date | 01 December 1954 |
| Court | House of Lords |
[1954] UKHL J1201-1
Viscount Simonds
Lord Morton of Henryton
Lord Reid
Lord Tucker
Lord Somervell of Harrow
House of Lords
Upon Report from the Appellate Committee, to whom was referred the Cause Shephard and another against Cartwright and others, that the Committee had heard Counsel, as well on Tuesday the 26th, Wednesday the 27th and Thursday the 28th days of October last, as on Monday the 1st, Tuesday the 2d and Wednesday the 3d, days of November last, upon the Petition and Appeal of Richard David Shephard, of Marlpits Farm, Ninfield, in the County of Sussex, and Winifred Maud Cartwright (married woman), of Saxon Hill, Battle, in the County of Sussex, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 1st of July, 1953, so far as therein stated to be appealed against, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order, so far as aforesaid, might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the printed Case of Joseph Osmond Cartwright and Hedley Spain Dunk; and also upon the printed Case of Philip Edward Shephard, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal, of the 1st day of July 1953, in part complained of in the said Appeal, be, and the same is hereby, Reversed, and that the Judgment of the Honourable Mr. Justice Harman of the 19th day of February 1953, be, and the same is hereby, Varied;
(i) by declaring (in lieu of the declaration on Inquiry No. 5 ordered by Order dated 12th January, 1953) that all the shares in the companies there mentioned, registered in the respective names of the Appellants, were advancements to them respectively, so as to constitute each the sole beneficial owner thereof, and that their respective claims against the estate of the Testator based upon such beneficial ownership are not barred by laches or acquiescence, or by the Limitation Acts, 1623 or 1939;
(ii) by striking out the declarations on Inquiries No. 7 and 10 (ordered by the said Order dated 12th January, 1953);
(iii) by declaring that the Accounts and Inquiries Nos. 6, 7, 9, 10 and 11 set out in the Order of Mr. Justice Harman, dated 12th January, 1953, should be taken and made upon the basis of declaration (i) above:
And it is further Ordered, That the Costs incurred by the Appellants in the Court of Appeal, and also the Costs incurred by them in respect of the said Appeal to this House, be paid to them as between party and party out of the estate in due course of administration, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is further Ordered, That the Costs incurred by the Respondents Joseph Osmond Cartwright and Hedley Spain Dunk in respect of the said Appeal to this House, be taxed as between Solicitor and Client, and paid out of the estate in due course of administration, the amount of such Costs to be certified by the Clerk of the Parliaments: And it is further Ordered, That the Respondent Philip Edward Shephard do bear and pay his own Costs in the Court of Appeal, and also the Costs incurred by him in respect of the said Appeal to this House: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Chancery Division of the High Court of Justice to do therein as shall be just and consistent with this Judgment.
My Lords,
This appeal raises questions in regard to the application of the equitable doctrine of advancement which I had regarded as well settled long ago.
The following facts form the background of the case.
On the 20th July, 1949, one Philip Edward Shephard died leaving a substantial estate subject to the claims to which I presently refer. The Respondents, Joseph Osmond Cartwright and Hedley Spain Dunk and his son, the Appellant, Richard David Shephard, are the executors of his will which was made on the 4th December, 1946. In addition to Richard, who was born on the 2nd November, 1913, the deceased, as I will call him, had two other children, an elder son, the Respondent, Philip Edward Shephard, and a daughter, the Appellant, Winifred Maud Cartwright, who was born on the 25th October, 1906.
In the year 1929 the deceased, who was then employed in an insurance brokerage business, engaged upon speculative building ventures in association with one Meyer, and for that purpose promoted six private companies and caused the following shares of £1 each, for which he had subscribed in cash, to be allotted to and registered in the names of himself, his wife and his three children whom I have named:
| The Deceased | His Wife | Philip | Winifred | Richard | |
| New Ideal Homesteads Limited | 200 | — | 100 | 100 | 100 |
| Kent & Sussex Building Co. Limited | 100 | 100 | — | 100 | 450 |
| Northend Machinery & Motor Services Limited | 125 | — | 125 | 125 | 125 |
| Reliance Electrical Co. Limited | 100 | — | — | — | 50 |
| N.I.H. Haulage Limited | 100 | — | 150 | 100 | 150 |
| Mastercraft Homesteads Limited | 100 | — | — | — | — |
It has not been disputed that these shares were at that time of the value of £1 each or thereabouts. An equal number of shares of each company was registered in the names of the deceased's associate, Meyer, and members of his family. Neither of the Appellants, of whom Richard was then aged 16 and Winifred 23, had any knowledge of this transaction. No evidence was given of the issue of any share certificates, but it seems reasonably certain that none were given to Richard or Winifred. Whether Philip had any is unknown. Strangely, he elected to give no evidence on this or any other matter.
At the time of this transaction Richard and Winifred lived at home under their father's protection and, though it appears that relations between them and his wife, their stepmother, were somewhat strained, there is evidence that he recognised in full his paternal obligations, while they regarded him with more than usual filial reverence.
I think it well then to pause in this year 1929 and to ask what was the result in law or equity of the registration, in the names of his children, of shares for which he supplied the cash, and I pause in order to examine the law, because it appears to me that the only two facts which are at this stage relied on to rebut the presumption of advancement, viz.: that the children were ignorant and that certificates were not given to them, are of negligible value.
My Lords, I do not distinguish between the purchase of shares and the acquisition of shares upon allotment, and I think that the law is clear that on the one hand where a man purchases shares and they are registered in the name of a stranger there is a resulting trust in favour of the purchaser; on the other hand, if they are registered in the name of a child or one to whom the purchaser then stood in loco parentis, there is no such resulting trust but a presumption of advancement. Equally it is clear that the presumption may be rebutted but should not, as Lord Eldon said, give way to slight circumstances.
It must then be asked by what evidence can the presumption be rebutted, and it would, I think, be very unfortunate if any doubt were cast (as I think it has been by certain passages in the judgments under review) upon the well settled law on this subject. It is, I think, correctly stated in substantially the same terms in every text book that I have consulted and supported by authority extending over a long period of time. I will take, as an example, a passage from Snell's Equity, 22nd Edition, at p. 122, which is as follows:
"The acts and declarations of the parties before or at the time of the purchase, or so immediately after it as to constitute a part of the transaction, are admissible in evidence either for or against the party who did the act or made the declaration; subsequent acts and declarations are only admissible as evidence against the party who did or made them, and not in his favour."
I do not think it necessary to review the numerous cases of high authority upon which this statement is founded. It is possible to find in some earlier judgments reference to "subsequent" events without the qualifications contained in the text-book statement: it may even be possible to wonder in some cases how in the narration of facts certain events were admitted to consideration. But the burden of authority in favour of the broad proposition as stated in the passage I have cited is overwhelming and should not be disturbed.
But, though the applicable law is not in doubt, the application of it is not always easy. There must often be room for argument whether a subsequent act is part of the same transaction as the original purchase or transfer, and equally whether subsequent acts which it is sought to adduce in evidence ought to be regarded as admissions by the party so acting, and whether, if they are so admitted, further facts should be admitted by way of qualification of those admissions.
Before, however, I ask whether evidence of any subsequent events is in this case admissible either because they formed part of the original transaction or because they were in the nature of admissions, I must shortly examine an argument which has been pressed upon this appeal and appears to have carried particular weight with Romer, L.J. It is that an inference about the intention of the deceased at the time of the vesting of the relevant...
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