Reading and Another v Reading and Others
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Asplin |
| Judgment Date | 05 February 2015 |
| Neutral Citation | [2015] EWHC 946 (Ch) |
| Docket Number | Case No: HC2014001261 |
| Court | Chancery Division |
| Date | 05 February 2015 |
[2015] EWHC 946 (CH)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
The Rolls Building
7 Rolls Buildings, Fetter Lane, London
EC4A 1NL
Mrs Justice Asplin
Case No: HC2014001261
Mr Edward Hewitt appeared on behalf of the Claimants
The Defendants did not attend and were not represented
(As approved)
This is a Part 8 claim brought by Mrs Janet Reading ("Janet") and Mr Richard Flack, the claimants, who are two of the trustees of a nil-rate band trust established by clause 3 of the will of the late John Reading dated 30 January 2004 ("the will").
John Reading died on 6 July 2005 ("the testator"). Probate of the will was granted on 19 January 2006 to the testator's son, Stuart Reading, the first defendant ("Stuart"), his stepson, Neill John Sedgwick, the eighth defendant ("Neill") and Mr David Satchell, a solicitor and then partner of Pardoes, the solicitors who drew up the will ("Mr Satchell"). Neill and Stuart are also trustees of the nil-rate band trust in addition to Mrs Reading, the deceased's widow, and Mr Flack, who replaced Mr Satchell as trustee in 2009.
The claimants seek a declaration as to the proper construction of clause 3 of the will and in particular of "issue" in the definition of "Beneficiaries" at clause 3.2.3 for the purposes of the nil-rate band trust, and in clause 3.5.2, which is concerned with the treatment of capital and income at the end of trust period. The claimants contend that the term should be construed to include both the deceased's children, Stuart and Sally Anne Heysham, the sixth defendant ("Sally"), his stepchildren, Neill, Ruth, Janet Sedgwick, the eleventh defendant ("Ruth"), and Robin Richard Sedgwick, the twelfth defendant ("Robin"), and the children of all five of them, who are the remaining defendants. In the alternative they seek an order to rectify the will in order to replace references to "issue" with a phrase which would convey the intention to benefit the testator's children, his stepchildren and their children.
Despite having been in correspondence with solicitors instructed on behalf of the claimants and having signed forms stating that they "dispute the trust created by clause 3 of the will dated January 2004 should include John Anthony Reading's stepchildren and their children", neither Stuart nor Sally acknowledged service of the proceedings or, but for the document to which I shall refer, have taken part in them. As a result, it was necessary by an order of Deputy Master Cousins of 28 July 2014 amongst other things to appoint Stuart as a litigation friend in respect of his children, the second, third, fourth, fifth and sixteenth defendants, and to appoint Sally litigation friend in respect of her son, the seventh defendant. By that order the Deputy Master also ordered that unless evidence was served by the first to seventh and sixteenth defendants upon which they intended to rely by 4pm on 18 August 2014, they would be debarred from filing evidence thereafter.
In fact Sally has filed an unsigned document in which she disputes Mrs Reading's evidence as to the amount of contact she had with her father whilst she and her brother were growing up and thereafter, and states:
"As [the deceased's] children we feel his wishes were as to the will to secure an inheritance for his children as Mrs Reading's will did for her children."
Stuart and the other defendants have failed to file any evidence in accordance with the order and therefore are debarred from filing evidence now. Neill, Ruth and Robin on their own behalf and on that of their children have filed acknowledgments of service indicating that they do not intend to contest the claim and explaining that their understanding was that the deceased intended to benefit both his children, his stepchildren and their children. I should add that to the extent that their children were minors at the date when the proceedings were commenced, Neill and Robin were appointed as their litigations friends.
The claimants have been represented before me by Mr Edward Hewitt. None of the defendants were represented, nor did they attend the hearing. Despite that fact that the defendants were not present, nor were they represented, Mr Hewitt asked me to make an order that Stuart be appointed to represent all unborn grandchildren and remoter issue of the testator and that Neill be appointed to represent all unborn step-grandchildren and remoter issue through the stepchildren of the testator. In the circumstances of this case I am willing to do so.
The will and letter of wishes
Having revoked all former wills and testamentary dispositions, in clause 1 and appointed Neill, Stuart and a partner of Pardoes, his solicitors, as his executors and trustees in clause 2, the nil-rate band trust is set out in clause 3 of the will. The relevant parts of that clause are as follows:
"3.2.1. The 'Nil-Rate Sum' means the largest sum of cash which could be given on the trusts of this clause without any Inheritance Tax becoming due in respect of the transfer of the value of my estate which I am deemed to make immediately before my death.
3.2.2. The 'Trust Period' means the period starting with my death and ending eighty years afterwards (and that period is the perpetuity period applicable to this clause)
3.2.3. 'The Beneficiaries' means my wife JANET ANTOINETTE READING and any issue of mine who are alive at the start of or born during the Trust Period and
3.2.4. 'my Legacy Fund Trustees' shall mean my Trustees and my wife JANET ANTOINETTE READING or such other trustees or trustee for the time being of this Legacy Fund.
3.3. I GIVE the Nil-Rate Sum to my Legacy Fund Trustees ON TRUST to invest it in the exercise of the powers of investment given to them by this will or by law and to hold it and the property which currently represents it ('the Legacy Fund') on the trusts and with and subject to the powers and provisions set out in this clause.
[…]
3.5.2. On the expiry of the Trust Period my Legacy Fund Trustees shall hold the Legacy Fund as to both capital and income ON TRUST absolutely for such of my issue as are then living and if more than one in equal shares through all degrees according to their stocks and so that no issue shall take whose parent is alive and so capable of taking."
Thereafter by clause 4 the testator gave his residuary estate to this Trustees on trust for sale to pay it to Janet if she survived him by 28 days and, if not, by clause 4.2 to pay it to:
" … such of STUART READING aforesaid my daughter SALLY ANNE HEYSHAM, NEILL JOHN SEDGWICK aforesaid my stepson ROBIN RICHARD SEDGWICK and my stepdaughter RUTH JANET SEDGWICK as shall survive me and if more than one in equal shares absolutely PROVIDED THAT if any of them shall predecease me leaving children at my death such children shall take by substitution and if more than one in equal shares the share of my estate which his or her or their parent would have taken had he or she survived me and attained a vested interest."
The testator also signed a Letter of Wishes which is also dated 30 January 2004. It is in the following form:
"To the Trustees of my Will dated the 30 th day of January 2004.
In my Will I have left my residuary estate (the property defined as the 'Legacy Fund') to you to hold it on a Discretionary Trust. In the hope that this may be of help to you in exercising your powers, but without trying to impose any binding obligation or deter you from acting as you think best in the light of changing circumstances I express the following wishes:
(1) That you should give consideration to the needs of my wife during her lifetime but not to the extent that the Trust Fund would cause the loss of benefits and other entitlements that she would otherwise receive in the absence of the Fund but still to favour here such that she is able to live in full comfort for the remainder of her life.
(2) That subject to (1) above, you should divide the capital amongst my children and stepchildren equally or, where any child has died prior to the time of distribution or if for tax or any other reasons any child may so request to apply that child's share for the benefit of his or her family.
(3) That if my wife's circumstances should allow, you should give favourable consideration to making interim distributions prior to the final distribution taking place of income and/or capital especially if any of my children or remoter issue should be widowed, suffer financial hardship or otherwise be in need."
Dated the 30 th day of January Two Thousand and Four.
Signed.
J.A. Reading (John Anthony Reading).
Chronology of events
Other than the short document filed by Sally, the only evidence in this matter is in the form of a witness statement from Janet dated 21 October 2013 and a witness statement from Mr Satchell of 7 November 2013. Janet first sets out the family background. She explains that she married the testator in 1980 and that although they had no children the testator had two children from a previous marriage, Stuart and Sally, and she had three, Neill, Robin and Ruth. She also explains that it is not in dispute that Stuart has five children, all of whom are minors, and that Sally has a son who is also a minor. I should add that Sally explains that both her son and all of Stuart's children were born after the death of the testator. Janet goes on to explain that although Ruth has no children, Neill's two children are both adults, as are Robin's three children. The significance of this, other than the fact that there is no...
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