Re Weston's Settlements
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE DANCKWERTS |
| Judgment Date | 31 July 1968 |
| Judgment citation (vLex) | [1968] EWCA Civ J0731-1 |
| Date | 31 July 1968 |
| Court | Court of Appeal (Civil Division) |
In the Matter of the following Instruments:
Date
18th June 1964
Instrument
Settlement
Parties
(1) Stanley Weston
(2) Raphael Howard Boyers
Peter Anthony Smith
Ena Weston and
Robert Lawrence Weston
2nd July 1964
Marriage
Settlement
(1) Stanley Weston
(2) Robert Lawrence Weston
(3) Carole Mary Boyers
(4) Peter Anthony Smith
Raphael Howard Boyers and Ena Weston
-and
In the Matter of The Trustee Act, 1925
-and
In the Matter of The Variation Of Trusts Act, 1958
[1968] EWCA Civ J0731-1
The Master of the Rolls (Lord Denning)
Lord Justice Harman and
Lord Justice Danckwerts
In The Supreme Court of Judicature
Court of Appeal
Mr. E.I. GOULDING, Q.C., and Mr. J.B. MORCOM (instructed by Messrs, Paisner & Co., agents for Messrs. Boyers, Howson & Whitehead, Sheffield) appeared on behalf of the Plaintiff.
Mr. M.G. JOHNSTON (instructed by Messrs. Painser & Co., agents for Messrs Boyers, Howson & Whitehead, Sheffield) appeared on behalf of the First Defendant.
Mr. C.I. HOWELLS (instructed by Messrs. Painser & Co., agents for Messrs. Boyers, Howson & Whitehead, Sheffield) appeared on behalf of the Second and Third (Infant) Defendants.
Mr. H.E. FRANCIS, Q.C., and Mr. D.J. CAMPION (instructed by Messrs. Paisner & Co., agents for Messrs. Boyers, Howson & Whitehead, Sheffield) appeared on behalf of the Fourth, Fifth and Sixth Defendants, Trustees of the Settlements.
In 1894 a young Russian, Abrani Wosskow, came to England. He was then aged 18. He married here and had a son, Sol, who was born on the 12th May, 1916, at Sheffield. As a boy Sol Wosskow went to school in Sheffield, but left at the age of 13, and started work. In 1939, when he was 23, he married Ena Swycher. They spent their honeymoon in Jersey, in 1942 he changed his name by deed poll to Stanley Weston. He served during the war with our forces, but was invalided out in 1943. Then he started as a small trader on his own. After a few years he prospered exceedingly. He built up a wholesale business and a large chain of retail shops. In 1964 he turned the enterprise into a public company called The Stanley Weston Group Ltd. He held a great number of the shares himself.
Mr. Stanley Weston and his wife have two children, both sons. The elder is Robert Lawrence Weston, who was born on the 12th November, 1942, so he is now 25. Robert was married on the 22nd July, 1964, to Carole Mary Boyers, and they have a baby boy Nigel, who was born on the 18th August, 1966, so he is still under 2. The younger son Alan Clive Weston was born on the 22nd January, 1949, so he is now 19. He is not married.
In 1964 Mr. Stanley Weston made two settlements. The first settlement was dated the 18th June, 1964, and was in favour of the younger son Alan. In pursuance of this settlement a block of a quarter-million shares in The Stanley Weston Group Ltd. was vested in trustees for the benefit of Alan and any children that he might have. The trustees were Mr. R.H. Boyers, a solicitor in Sheffield, Mr. P.A. Smith, a chartered accountant in Leicester, Mrs. Stanley Weston (the mother of Robert and Alan), and Robert Weston (the elder son). The trust fund is now worth some £400,000
The second settlement was a marriage settlement, dated the 2nd July, 1964, which was made in consideration of the marriage of the elder son Robert and his wife Carole. Under it there was vested in trustees another block of a quarter–million shares in The Stanley Weston Group Ltd. This settlement was for the benefit of Robert and any children that he might have. The trustees were again Mr. Boyers, the solicitor, and Mr. P.A. Smith, the chartered accountant. This trust fund is also worth nearly £40O,00O.
When those settlements were entered into, there was no capital gains tax. But in the next year, 1965, Parliament imposed the capital gains tax which is payable on capital gains accruing to persons resident in the United Kingdom. The tax is at the rate of 30%. The result was that if the trustees and beneficiaries regained here and the shares of Stanley Weston increased in value (as they have), there would sooner or later be a heavy liability to capital gains tax. This was such an uncomfortable prospect that Mr. Stanley Weston took steps to remove his family to the Channel Islands, and the trusts as well.
At the end of 1966, the father, Mr. Stanley Weston, bought a house in Jersey in the Channel Islands, 22, Magnolia Gardens, Bel Royal, St. Lawrence, Jersey. In the first half of 1967 be spent some holidays there. Finally, in August 1967 he moved over there, with his wife and the younger son Alan} who is aged 19 Mr. Stanley Weston says (although he is only just 52) that he intends to make Jersey his permanent home for the remainder of his life.
In August 1967 the elder son Robert also left England for good. He sold his home in Sheffield and went with his wife and baby son to live in Jersey. He took a lease of a flat and moved into it on the 29th September, 1967. He says that he intends be make Jersey his permanent and only home. So by August 1967 the whole family had Moved to Jersey. The two sons, we are told, have set up a restaurant there which they call the "Side Walk.
Only three months later, on the 7th November, 1967, Mr. Stanley Weston took out an originating summons in the Chancery Division in both settlements seeking the Court's approval to a proposed scheme. The object of the scheme is admittedly to avoid capital gains tax and other duties.
By the first part of the summons, Mr. Stanley Weston asks for the appointment of two new trustees who live in Jersey. One of them is Mr. Ference Cubitt Sowden, who is an advocate and notary public. The other is Mr. Peter Gilroy Blampied, who is a chartered accountant. That application is made under section 41 of the Trustees Act, 1925, which says that "the Court may, whenever it is expedient to appoint a new trustee or new trustees, and it is found inexpedient, difficult or impracticable to do so, without the assistance of the Court, make an order appointing a new trustee or trustees". Under the proposals, after those two new trustees were appointed, the old trustees would resign, leaving the new trustees the only trustees of the settlement.
By the second part of the summons, Mr. Stanley Weston asks for the approval of the Court to a variation or revocation of the trusts of the settlements. The proposal is that there should be inserted in each of the settlements a power, after the expiration of three months, for the new trustees to discharge the trusts of the English settlement and to subject it to the trusts of an identical, or nearly identical, Jersey settlement, which will be subject to Jersey law. That application is made under section 1 of the Variation of Trusts Act, 1958, which says that "the Court may, if it thinks fit, approve on behalf of (infants and unborn persons) any arrangement varying or revoking all or any of the trusts or enlarging the powers of the trustees."
If the Court gives its approval to the proposed scheme, the result will be that the new trustees will be able to sell the shares in the Stanley Weston Group and buy other shares, without being accountable for capital gains. There will be also considerable savings of estate duty on the deaths of the two sonsRobert and Alan. In short, there will be a tremendous tax advantage to the sons and grandchildren of Mr. Stanley Weston. The question is whether the Court ought to sanction the scheme.
There is one reported case in Which a scheme on these lines was approved. It was in re ( Seale's Marriage Settlement 1961 1 Ch. 574). In that case husband and wife carried in 1931. They were both domiciled and resident in England: and a marriage settlement was made In an English trust in the ordinary form. They had three children who appear to have been born in England. But when the children were quite small the family emigrated to Canada. The children were brought up as Canadians and were likely to continue to live in Canada. The husband and wife intended to continue to live there. It was obviously advantageous for the settlement to be turned from an English settlement into a Canadian settlement — quite irrespective of tax advantages— and Mr. Justice Buckley made orders enabling Canadian trustees to be appointed and a Canadian settlement to be drawn up substantially in the same terms as the English settlement.
Those advising Mr. Weston ask the Court to approve a similar scheme here. The Judge refused. He said that this was a "cheap exercise in tax avoidance" which he ought not to sanction; but he hoped that the case would be taken to the Court of Appeal so as to have the views of this Court.
Before the Variation of Trusts Act, 1958, there was much discussion as to the power of the Court to sanction the variation of trusts. If the beneficiaries were all sui juris they could agree between themselves to revoke or vary the trusts. If there were infant beneficiaries or unborn persons, it needed the consent of the Court. But the jurisdiction of the Court so to consent was very limited. The Court could not sanction it except in case of a compromise of disputed...
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