Walker's Trustees v Lord Advocate
| Jurisdiction | England & Wales |
| Judge | Lord Morton of Henryton,Lord Porter,Lord Reid,Lord Cohen |
| Judgment Date | 05 May 1955 |
| Judgment citation (vLex) | [1955] UKHL J0505-2 |
| Court | House of Lords |
| Docket Number | No. 4. |
| Date | 05 May 1955 |
[1955] UKHL J0505-2
House of Lords
Lord Morton of Henryton
Lord Porter
Lord Reid
Lord Radcliffe
Lord Cohen
Upon Report from the Appellate Committee, to whom was referred the Cause Walker and others against Commissioners of Inland Revenue, that the Committee had heard Counsel, as well on Monday the 21st, as on Tuesday the 22d, days of March last, upon the Petition and Appeal of William Giles Newsom Walker, of Sandford, St. Fort, Wormit, Fife; Barclay Clibborn Walker, of Carselea, Invergowrie, by Dundee; and George Reid Donald, Solicitor, Dundee, the Trustees and Executors of the late Harry Giles Walker, sometime residing at Over Rankeillour, Cupar, Fife, acting under his Trust Disposition and Settlement dated 18th June and registered in the Books of Council and Session on 17th August 1951, praying, That the matter of the Interlocutor set forth in the Schedule thereto, namely, an Interlocutor of the Lords of Session in Scotland, of the Second Division, sitting as the Court of Exchequer, of the 29th of October 1953, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Interlocutor 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 The Commissioners of Inland Revenue, 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 Interlocutor, of the 29th day of October 1953, complained of in the said Appeal, be, and the same is hereby, Reversed: And it is further Ordered, That the Assessment dated 15th October 1951 to Estate Duty, on the value of five Life Assurance Policies effected by the said Harry Giles Walker, deceased, under the provisions of the Married Women's Policies of Assurance (Scotland) Act, 1880, be, and the same is hereby Recalled: And it is hereby Declared, That each of the aforesaid Life Assurance Policies of the said Harry Giles Walker, deceased, is an "estate by itself" within the meaning of the proviso to section 4 of the Finance Act, 1894: And it is further Ordered, That the Cause be, and the same is hereby, remitted back to the Court of Session in Scotland to do therein as shall be just and consistent with this Judgment: And it is further Ordered, That the Respondents do pay or cause to be paid to the said Appellants the costs incurred by them in the Court of Session, and also the costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That unless the costs certified as aforesaid shall be paid to the parties entitled to the same within one calendar month from the date of the certificate thereof, the Court of Session in Scotland, or the Judge acting as Vacation Judge, shall issue such summary process or diligence for the recovery of such costs as shall be lawful and necessary.
My Lords,
The events leading up to this appeal will be fully stated by my noble and learned friend Lord Reid, but in order to express my views I must refer to the wording of the policies under consideration and of s. 2 of the Married Women's Policies of Assurance (Scotland) Act, 1880.
It is agreed that policy No. 238,380 of the Royal Exchange Assurance may be taken as typical of the policies with which your Lordships' House is concerned. The relevant portion of that policy is under the heading "Special Provisions (if any)" and is in the following terms:—
"This Policy and the Assurance hereby made is and shall be under the Married Women's Policies of Assurance (Scotland) Act 1880 for the benefit of the Assured's son BARCLAY CLIBBORN WALKER if he shall be alive on the happening of the event assured against but if he shall not then be alive then for the benefit in equal shares of the Assured's son and daughter DAVID HARRY WALKER and MRS. HULDAH ELIZABETH CHRISTINA RENNIE if they shall survive the event assured against and if only one of the said son and daughter shall so survive then wholly for the benefit of that one and if the Assured's said three children shall all predecease the happening of the event assured against, then for the benefit of the estate of the last to die of the said three children Provided that if any of the said three children predecease the Assured leaving issue such issue shall not take any part of the share which the parent or parents of such issue would have taken on surviving the Assured except such share as may accrue through the estate of the last survivor of the Assured's said three children."
By the Married Women's Policies of Assurance (Scotland) Act, 1880, section 2, it is enacted:—
"Section 2.—A policy of assurance effected by any married man on his own life, and expressed upon the face of it to be for the benefit of his wife, or of his children, or of his wife and children, shall, together with all benefit thereof, be deemed a trust for the benefit of his wife for her separate use, or for the benefit of his children, or for the benefit of his wife and children; and such policy, immediately on its being so effected, shall vest in him and his legal representatives in trust for the purpose or purposes so expressed, or in any trustee nominated in the policy, or appointed by separate writing duly intimated to the assurance office, but in trust always as aforesaid, and shall not otherwise be subject to his control, or form part of his estate, or be liable to the diligence of his creditors, or be revocable as a donation, or reducible on any ground of excess or insolvency.…"
It is plain that the special provisions of the policy down to the words "and if the Assured's said three children shall all predecease the happening of the event assured against" are for the benefit of the assured's children, within the meaning of section 2 of the Act of 1880. The first question arising for decision is whether the ultimate gift "for the benefit of the estate of the last to die of the said three children" is for the benefit of the child who is the last to die, within the meaning of the same section. If that question is answered "Yes", it follows that the policies in question are within the protection of that section, and this appeal must succeed. If, however, the ultimate gift is not for the benefit of that child, within the meaning of the section, further questions will arise which are, in my view, of some difficulty.
My Lords, I approach the question just stated by considering the position of the last surviving child after the other two children have died and while his father, the assured, is still alive. The position is that if he survives his father he will become the beneficial owner of the policy, while if he predeceases his father the policy monies will go to swell his (the child's) estate. There is, I think, no doubt that the child could dispose of the policy monies by his will, and to my mind the possession of this disposing power clearly is a benefit to the child, in any ordinary sense of the word. To quote Lord Patrick:
"This faculty, however, is a valuable right. The last child to survive could immediately on such survivance contract to make a will in favour of a purchaser under which he would bequeath the Policy to the purchaser and renounce all right to revoke the will. He would then execute a will to the above effect, and deliver contract and will to the purchaser. The transaction would be valid and enforceable, and none the less so because it could not be implemented until after the death of the assured".
Even if the child had no power to enter into such a transaction as that which Lord Patrick describes, I should still think that the power to make a larger provision for his dependants by will is in itself a benefit to the child.
So far I think the matter is clear, but the Lord Justice-Clerk, Lord Patrick and Lord Mackintosh, who gave the majority judgments in the Second Division, all took the view that the terms of the policy were not exclusively for the benefit of the assured's children because (to quote the Lord Justice-Clerk) "… if the last surviving child were to predecease the assured without leaving a will, the parties who thereafter would be entitled to take under the Policies would be the heirs ab intestato of that child. These heirs cannot be brought within the terms of the 1880 Act". I emphasise the words "under the Policies" because it is just at this point that I part company with the learned Lord Justice-Clerk. Lord Patrick expressed the same idea when he was contrasting the policies now under consideration with the policies in question in the case of Haldane, which was also before the Second Division. Lord Patrick said:
"… under both types of Policy, if the last child to survive died intestate in the lifetime of the assured, the property in the Policy would pass to his heirs in mobilibus, but in the first type of Policy"
(i.e. the Haldane Policy) "it would do so by inheritance, and not by virtue of the destination in the Policy, as in the case of the second type of Policy" (i.e. the Walker Policy). Lord Mackintosh said:
"There is however the further possibility—namely, that the last surviving child might fail to exercise the jus disponendi mortis causa which I hold was conferred on him or her by this latter part of the destination in the Policy. In that event I think that the trust protection afforded by the 1880 Act would cease on the death of the last surviving child, because the Policy would then come to be held not for the benefit conferred on a child but for the last...
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