Whishaw and Another v Stephens and Others

CourtHouse of Lords
Docket NumberParliamentary Archives, HL/PO/JU/4/3/1175
JudgeLord Reid, Lord Hodson, Lord Guest, Lord Upjohn, Lord Donovan
Judgment Date31 Oct 1968
JurisdictionEngland & Wales

[1968] UKHL J1031-1


Lord Reid

Lord Hodson

Lord Guest

Lord Upjohn

Lord Donovan

Parliamentary Archives, HL/PO/JU/4/3/1175

Whishaw and Another
Stephens and Others
Lord Reid



Settlements were made by the late Mr. Calouste Gulbenkian in 1929 and 1938 under which the trustees "shall" during the life of his son Mr. Nubar Gulbenkian

"at their absolute discretion pay all or any part of the income of the property hereby settled and the investments for the time being representing the same (hereinafter called the Trust Fund) to or apply the same for the maintenance and personal support or benefit of all or any one or more to the exclusion of the other or others of the following persons …"


Among those persons were

"any person or persons in whose house or apartments or in whose company or under whose care or control or by or with whom the said Nubar Sarkis Gulbenkian may from time to time be employed or residing …"


The sole question in this appeal is whether this class of potential beneficiaries is so uncertain that these provisions cannot be operated by the trustees. It is not disputed that if the description of the class which I have quoted is too uncertain then the whole provision fails even although the other potential beneficiaries are easily ascertainable.


This clause does not make sense as it stands. One of the permutations which the grammar requires is any person "by whom Mr. Gulbenkian is residing". But the client must not be penalised for his lawyer's slovenly drafting. Under modern conditions it may be necessary to relax older and stricter standards. If I adopt methods of construction appropriate for commercial documents and documents inter rusticos I must consider whether underlying the words used any reasonably clear intention can be discerned. I think that it is reasonably clear that this clause is the result of carelessly telescoping two separate clauses—(1) any person by whom Mr. Gulbenkian may from time to time be employed, and (2) any person in whose house or in whose company or under whose care or with whom he may from time to time be residing. Read literally the clause embraces any person in whose house or in whose company or under whose care or with whom Mr. Gulbenkian may from time to time be employed. That might well be held to be too uncertain but I think it reasonably clear that that cannot have been intended: no rational person would insert provisions lake that. I was surprised to learn that this botched clause has somehow found its way into a standard book of precedents, so I realise that this matter may be of some general importance.


If the clause is read in the way in which I think it must be read then it is not suggested that there is any uncertainty about the first limb—any person by whom Mr. Gulbenkian may be employed—but it is argued that the other limb is bad for uncertainty. It would be bad if it purported to impose on the trustees duties which, even with the aid of the Court, they could not properly carry out. So one must first see what their duties are. One argument, as I understand it, is that because this is admitted to be a mere power, it really imposes no duties on them at all. I find that difficult to understand. It is a power given not to the individuals who happen also to be trustees but to the trustees as such so that new trustees duly assumed or appointed can exercise it. In my view it must follow that the trustees are to act in their fiduciary capacity. They are given an absolute discretion. So if they decide in good faith at appropriate times to give none of the income to any of the beneficiaries the Court cannot pronounce their reasons to be bad. And similarly if they decide to give some or all of the income to a particular beneficiary the Court will not review their decision. That was decided by this House in Gisborne v. Gisborne, 2 App. Cas. 300, But their "absolute discretion" must I think be subject to two conditions. It may be true that when a mere power is given to an individual he is under no duty to exercise it or even to consider whether he should exercise it. But when a power is given to trustees as such, it appears to me that the situation must be different. A settlor or testator who entrusts a power to his trustees must be relying on them in their fiduciary capacity so they cannot simply push aside the power and refuse to consider whether it ought in their judgment to be exercised. And they cannot give money to a person who is not within the classes of persons designated by the settlor: the construction of the power is for the Court.


If the classes of beneficiaries are not defined with sufficient particularity to enable the Court to determine whether a particular person is or is not, on the facts at a particular time, within one of the classes of beneficiaries then the power must be bad for uncertainty. If the donee of the power whether or not he has any duty) desires to exercise it in favour of a particular person it must be possible to determine whether that particular person is or is not within the class of objects of the power. And it must be possible to determine the validity of the power immediately it comes into operation. It cannot be valid if the person whom the donee happens to choose is clearly within the objects but void if it is doubtful whether that is so. So if one can reasonably envisage cases where the Court could not determine the question the power must be bad for uncertainty. But it is not bad merely because such determination may be difficult in a particular case. The Respondents have inserted in their Case at the request of the trustees a statement that in the view of the trustees "it must be unlikely that they would in practice be able to exercise the said power or discretion except after obtaining a decision of the Court whether any particular suggested object thereof did or did not fall within the said description". That in itself is not sufficient to warrant a decision that the power fails for uncertainty. It may be that there is a class of case where, although the description of a class of beneficiaries is clear enough, any attempt to apply it to the facts would lead to such administrative difficulties that it would for that reason be held to be invalid. But that is not this case.


The class of persons to be considered in this case are those (a) in whose house or apartments Mr. Gulbenkian is residing, (b) in whose company or with whom he is residing and (c) under whose care or control he is residing. It is often difficult in a particular case to determine whether a temporary sojourn amounts to "residence", but that is the kind of problem which Courts often have to solve. And it is not much more difficult to say whether a man is residing in another person's company or under another person's care or control than it is to say whether he is residing in a particular house. I therefore reject the Appellants' first argument.


Then the Appellants submitted a further argument, that a power is bad for uncertainty unless it is possible to make a complete list of the possible beneficiaries at the time when it falls to be exercised. It is said that trustees cannot properly exercise their discretion unless they can survey the whole field: otherwise there might be in existence potential beneficiaries whom they might regard as more deserving than those who are known to them. In my view that cannot be right. Suppose that a testator or settlor empowers his trustees to give money to such of the descendants of X (or former domestic servants of X) as they may in their absolute discretion select: X may be the testator or settlor himself or anyone else. On the face of it that power is perfectly valid, and it surely cannot become invalid because before the power is exercised some descendant of X has emigrated with his family and cannot be traced.


The Appellants found on Inland Revenue v. Broadway Cottages Trust [1955] Ch. 20. There the trustees had a duty to apply certain income for the benefit of all or any one or more of certain defined classes of beneficiaries in such shares proportions and manner as the trustees in their discretion might from time to time think fit. Admittedly those classes were sufficiently precisely defined to make it possible to determine whether any particular individual was or was not eligible. But the classes were so wide that it was admitted to be impossible to make a complete list of those comprised in them. This was held to involve uncertainty so as to make the provisions void. That seems to me to be a very odd kind of uncertainty. Does it involve the proposition that if at first all potential beneficiaries are identifiable then the provision is valid, but that if for some reason, such as some of them disappearing, it later becomes impossible to make a list of all the survivors then the provision becomes invalid? I could understand it being held that if the classes of potential beneficiaries were so numerous that it would cost quite disproportionate enquiries and expense to find them all and discover their needs or deserts, then the provision would fail. But that would not be on the ground of uncertainty as that term is generally understood. I gravely doubt some of the arguments used by the Court of Appeal.


I will not deal with the authorities in detail because I think that the present position of the law is far from satisfactory. I agree with criticism by Lord Evershed in Re Hain [1961] 1 W.L.R. 440. by Sachs L.J. in Darwen v. Leek [1968] 2 W.L.R. 1385 and by Lord Denning M.R. in the present case. This case can be decided on the grounds suggested by my noble and learned friend, Lord Upjohn, and it is not an appropriate case for a review of the law. But I trust that there may be an early opportunity for reconsideration of some of the narrow and technical distinctions which have grown up in this...

To continue reading

Request your trial