Successive Estates
Land and Conveyancing Law Reform Act 2009
Ownership of Land
Ownership and abolition of feudal tenure.
9.— (1) From the commencement of this Part, ownership of land comprises the estates and interests specified in this Part.
(2) In so far as it survives, feudal tenure is abolished.
(3) Subsection (2) does not affect—
(a) the position of the State under—
(i) the State Property Act 1954,
(ii) section 73 of the Act of 1965,
(b) the concept of an estate under section 10,
(c) any fee farm grant made in derogation of the Statute Quia Emptores 1290,
(d) any surviving customary right or franchise.
[SQE 1290]
(4) A fee simple remains freely alienable.
Estates and interests in land.
10.— (1) The concept of an estate in land is retained and, subject to this Act, continues with the interests specified in this Part to denote the nature and extent of land ownership.
(2) Such an estate retains its pre-existing characteristics, but without any tenurial incidents.
(3) All references in any enactment or any instrument (whether made or executed before or after the commencement of this Part) to tenure or estates or interests in land, or to the holder of any such estate or interest, shall be read accordingly.
Restrictions on legal estates and interests.
11.— (1) The only legal estates in land which may be created or disposed of are the freehold and leasehold estates specified by this section.
(2) For the purposes of subsection (1), a “freehold estate” means a fee simple in possession and includes—
(a) a determinable fee,
(b) a fee simple subject to a right of entry or of re-entry,
(c) a fee simple subject only to—
(i) a power of revocation,
(ii) an annuity or other payment of capital or income for the advancement, maintenance or other benefit of any person, or
(iii) a right of residence which is not an exclusive right over the whole land.
(3) For the purposes of subsection (1), a “leasehold estate” means, subject to sections 12 and 14, the estate which arises when a tenancy is created for any period of time or any recurring period and irrespective of whether or not the estate—
(a) takes effect in immediate possession or in future, or
(b) is subject to another legal estate or interest, or
(c) is for a term which is uncertain or liable to termination by notice, re-entry or operation of law or by virtue of a provision for cessor on redemption or for any other reason.
(4) The only legal interests in land which may be created or disposed of are—
(a) an easement,
(b) a freehold covenant,
(c) an incumbrance,
(d) a rent payable under a tenancy,
(e) a possibility of reverter,
(f) a profit à prendre, including a mining right,
(g) a public or customary right,
(h) a rentcharge,
(i) a right of entry or of re-entry attached to a legal estate,
(j) a wayleave or other right to lay cables, pipes, wires or other conduits,
(k) any other legal interest created by any statutory provision.
(5) A legal estate or legal interest under this section has, subject to this Act, the same attributes as the corresponding legal estates and interests existing at the commencement of this Part and may exist concurrently with, or subject to, any other legal estate or interest in the same land.
(6) Subject to this Act, estates and interests other than those referred to in subsections (1) to (4) take effect as equitable interests only, but this does not prevent the creation of the estates and interests referred to in those subsections as equitable interests.
(7) Nothing in this Act affects judicial recognition of equitable interests.
(8) Subject to this Act, a power of attorney, power of appointment or other power to dispose of a legal estate or interest in land operates with the same force and effect as such powers had before the commencement of this Part.
(9) All estates and interests in land, whether legal or equitable, may be disposed of.
Prohibition of fee farm grants.
12.— (1) The creation of a fee farm grant at law or in equity is prohibited.
(2) Any instrument executed after the commencement of this Part purporting to—
(a) create a fee farm grant, or
(b) grant a lease for life or lives renewable for ever or for any period which is perpetually renewable,
vests in the purported grantee or lessee a legal fee simple or, as the case may be, an equitable fee simple and any contract for such a grant entered into after such commencement operates as a contract for such a vesting.
(3) A fee simple which vests under subsection (2) is freed and discharged from any covenant or other provision relating to rent, but all other covenants or provisions continue in force so far as consistent with the nature of a fee simple.
(4) Subsection (2) does not apply to any contract or instrument giving effect to a contract entered into before the commencement of this Part.
(5) Notwithstanding section 11(2), any fee simple held under a fee farm grant existing at law at the commencement of this Part continues as a legal estate and may be disposed of.
(6) Notwithstanding section 11(4), any fee farm rent existing at law at the commencement of this Part continues as a legal interest and may be disposed of.
Abolition of the fee tail.
13.— (1) The creation of a fee tail of any kind at law or in equity is prohibited.
(2) Any instrument executed after the commencement of this Part purporting to create a fee tail in favour of any person vests in that person a legal fee simple or, as the case may be, an equitable fee simple and any contract for such a creation entered into before or after such commencement operates as a contract for such vesting.
(3) Where—
(a) immediately before the commencement of this Part, a person was entitled to a fee tail at law or in equity, or
(b) after such commencement, a person becomes entitled to such a fee tail,
a legal or, as the case may be, an equitable fee simple vests in that person on such commencement or on that person becoming so entitled provided any protectorship has ended.
(4) In subsection (3)“fee tail” includes—
(a) a base fee provided the protectorship has ended,
(b) a base fee created by failure to enrol the disentailing deed,
but does not include the estate of a tenant in tail after possibility of issue extinct.
(5) A fee simple which vests under subsection (2) or subsection (3) is—
(a) not subject to any estates or interests limited by the instrument creating the fee tail to take effect after the termination of the fee tail,
(b) subject to any estates or interests limited to take effect in defeasance of the fee tail which would be valid if limited to take effect in defeasance of a fee simple.
Prohibition of leases for lives.
14.— The grant of a lease for—
(a) a life or lives,
(b) a life or lives combined with a concurrent or reversionary term of any period,
(c) any term coming to an end on the death of a person or persons,
and any contract for such a grant made after the commencement of this Part is void both at law and in equity.
PART 3
Future Interests
Operation of future interests in land.
15.— (1) Subject to subsection (2), all future interests in land, whether vested or contingent, exist in equity only.
(2) Subsection (1) does not apply to—
(a) a possibility of reverter, or
(b) a right of entry or of re-entry attached to a legal estate.
Abolition of various rules.
16.— Subject to section 17, the following rules are abolished:
(a) the rules known as the common law contingent remainder rules;
(b) the rule known as the Rule in Purefoy v. Rogers;
(c) the rule known as the Rule in Whitby v. Mitchell (also known as the old rule against perpetuities and the rule against double possibilities);
(d) the rule against perpetuities;
(e) the rule against accumulations.
Scope of section 16.
17.—Section 16 applies to any interest in property whenever created but does not apply if, before the commencement of this Part, in reliance on such an interest being invalid by virtue of the application of any of the rules abolished by that section—
(a) the property has been distributed or otherwise dealt with, or
(b) any person has done or omitted to do any thing which renders the position of that or any other person materially altered to that person’s detriment after the commencement of this Part.
PART 4
Trusts of Land
Trusts of land.
18.— (1) Subject to this Part, where land is—
[[SLA 1882, ss. 2, 59, 60]
(a) for the time being limited by an instrument, whenever executed, to persons by way of succession without the interposition of a trust (in this Part referred to as a “strict settlement”), or
(b) held, either with or without other property, on a trust whenever it arises and of whatever kind, or
(c) vested, whether before or after the commencement of this Part, in a minor,
there is a trust of land for the purposes of this Part.
(2) For the purposes of—
(a) subsection (1)(a), a strict settlement exists where an estate or interest in reversion or remainder is not disposed of and reverts to the settlor or the testator’s successors in title, but does not exist where a person owns a fee simple in possession,
(b) subsection (1)(b), a trust includes an express, implied, resulting, constructive and bare trust and a trust for sale.
(3) Subject to this Part, a trust of land is governed by the general law of trusts.
(4) Conversion of a life estate into an equitable interest only does not affect a life owner’s liability for waste.
[LEA 1695]
(5) Where, by reason of absence from the State or otherwise, it remains uncertain for a period of at least 7 years as to whether a person upon whose life an estate or interest depends is alive, it shall continue to be presumed that the person is dead.
(6) If such presumption is applied to a person but subsequently rebutted by proof to the contrary, that person may bring an action for damages or another remedy for any loss suffered.
(7) In dealing with an action under subsection (6), the court may make such order as appears to it to be just and equitable in the circumstances of the case.
(8) Any party to a conveyance shall, unless the contrary is proved, be presumed to have attained full age at the date of the conveyance.
(9) This Part does not apply to land held directly for a charitable purpose and not by way of a remainder.
Trustees of land.
19.— (1) The following persons are the trustees of a trust of land—
[SLA 1882, ss. 38, 39]
(a) in the case of a strict settlement, where it—
(i) exists at the commencement of this Part, the tenant for life within the meaning of the Settled Land Act 1882 together with any trustees of the settlement for the purposes of that Act,
(ii) is purported to be created after the commencement of this Part, the persons who would fall within paragraph (b) if the instrument creating it were deemed to be an instrument creating a trust of land,
(b) in the case of a trust of land created expressly—
(i) any trustee nominated by the trust instrument, but, if there is no such person, then,
(ii) any person on whom the trust instrument confers a present or future power of sale of the land, or power of consent to or approval of the exercise of such a power of sale, but, if there is no such person, then,
(iii) any person who, under either the trust instrument or the general law of trusts, has power to appoint a trustee of the land, but, if there is no such person, then,
(iv) the settlor or, in the case of a trust created by will, the testator’s personal representative or representatives,
(c) in the case of land vested in a minor before the commencement of this Part or purporting so to vest after such commencement, the persons who would fall within paragraph (b) if the instrument vesting the land were deemed to be an instrument creating a trust of land,
(d) in the case of land the subject of an implied, resulting, constructive or bare trust, the person in whom the legal title to the land is vested.
(2) For the purposes of—
(a) subsection (1)(a)(ii) and (1)(c), the references in subsection (1)(b) to “trustee” and “trustee of the land” include a trustee of the settlement,
(b) subsection (1)(b)(iii) a power to appoint a trustee includes a power to appoint where no previous appointment has been made.
(3) Nothing in this section affects the right of any person to obtain an order of the court appointing a trustee of land or vesting land in a person as trustee.
Powers of trustees of land.
20.— (1) Subject to—
(a) the duties of a trustee, and
(b) any restrictions imposed by any statutory provision (including this Act) or the general law of trusts or by any instrument or court order relating to the land,
a trustee of land has the full power of an owner to convey or otherwise deal with it.
(2) The power of a trustee under subsection (1) includes the power to—
(a) permit a beneficiary to occupy or otherwise use the land on such terms as the trustee thinks fit,
(b) sell the land and to re-invest the proceeds, in whole or in part, in the purchase of land, whether or not situated in the State, for such occupation or use.
Overreaching for protection of purchasers.
21.— (1) Subject to subsection (3), a conveyance to a purchaser of a legal estate or legal interest in land by the person or persons specified in subsection (2) overreaches any equitable interest in the land so that it ceases to affect that estate or interest, whether or not the purchaser has notice of the equitable interest.
(2) For the purposes of subsection (1), the “person or persons specified”—
(a) shall be at least two trustees or a trust corporation where the trust land comprises—
(i) a strict settlement, or
(ii) a trust, including a trust for sale, of land held for persons by way of succession, or
(iii) land vested in or held on trust for a minor,
(b) may be a single trustee or owner of the legal estate or interest in the case of any other trust of land.
(3) Subsection (1) does not apply to—
(a) any conveyance made for fraudulent purposes of which the purchaser has actual knowledge at the date of the conveyance or to which the purchaser is a party, or
(b) any equitable interest—
(i) to which the conveyance is expressly made subject, or
(ii) protected by deposit of documents of title relating to the legal estate or legal interest, or
(iii) in the case of a trust coming within subsection (2)(b), protected by registration prior to the date of the conveyance or taking effect as a burden coming within section 72(1)(j) of the Act of 1964 (or, in the case of unregistered land, which would take effect as such a burden if the land were registered land).
(4) In subsection (3)(b)(iii), “registration” means registration in the Registry of Deeds or Land Registry, as appropriate.
(5) Where an equitable interest is overreached under this section it attaches to the proceeds arising from the conveyance and effect shall be given to it accordingly.
(6) Nothing in this section affects the operation of the Act of 1976.
Resolution of disputes.
22.— (1) Any person having an interest in a trust of land, or a person acting on behalf of such a person, may apply to the court in a summary manner for an order to resolve a dispute between the—
(a) trustees themselves, or
(b) beneficiaries themselves, or
(c) trustees and beneficiaries, or
(d) trustees or beneficiaries and other persons interested,
in relation to any matter concerning the—
(i) performance of their functions by the trustees, or
(ii) nature or extent of any beneficial or other interest in the land, or
(iii) other operation of the trust.
(2) Subject to subsection (3), in determining an application under subsection (1) the court may make whatever order and direct whatever inquiries it thinks fit in the circumstances of the case.
(3) In considering an application under subsection (1)(i) and (iii) the court shall have regard to the interests of the beneficiaries as a whole and, subject to these, to—
(a) the purposes which the trust of land is intended to achieve,
(b) the interests of any minor or other beneficiary subject to any incapacity,
(c) the interests of any secured creditor of any beneficiary,
(d) any other matter which the court considers relevant.
(4) In subsection (1), “person having an interest” includes a mortgagee or other secured creditor, a judgment mortgagee or a trustee.
(5) Nothing in this section affects the jurisdiction of the court under section 36 of the Act of 1995.
PART 5
Variation of Trusts
Interpretation of Part 5.
23.— In this Part—
“appropriate person”, in relation to a relevant trust, means—
(a) a trustee of, or a beneficiary under, the trust, or
(b) any other person that the court, to which the application concerned under section 24 is made, considers appropriate;
“arrangement”, in relation to a relevant trust, means an arrangement—
(a) varying, revoking or resettling the trust, or
(b) varying, enlarging, adding to or restricting the powers of the trustees under the trust to manage or administer the property the subject of the trust;
“relevant person”, in relation to a relevant trust, means—
(a) a person who has a vested or contingent interest under the trust but who is incapable of assenting to an arrangement by reason of lack of capacity (whether by reason of minority or absence of mental capacity),
(b) an unborn person,
(c) a person whose identity, existence or whereabouts cannot be established by taking reasonable measures, or
(d) a person who has a contingent interest under the trust but who does not fall within paragraph (a);
“relevant trust”—
(a) subject to paragraph (b), means a trust arising, whether before, on or after the commencement of this section, under a will, settlement or other disposition,
(b) does not include—
(i) a trust created for a charitable purpose within the meaning of the Charities Acts 1961 and 1973 and the Charities Act 2009,
(ii) an occupational pension scheme within the meaning of the Pensions Act 1990 established under a trust,
(iii) a trust created by a British statute,
(iv) a trust created by a Saorstát Éireann statute, or
(v) a trust created by an Act of the Oireachtas, whether passed before, on or after the commencement of this section.
Jurisdiction of court to vary, etc., trusts.
24.— (1) An appropriate person may make, in respect of a relevant trust, an application to the court for an order to approve an arrangement specified in the application for the benefit of a relevant person specified in the application if the arrangement has been assented to in writing by each other person (if any) who—
(a) is not a relevant person,
(b) is beneficially interested in the trust, and
(c) is capable of assenting to the arrangement.
(2) The court shall not hear an application made to it under subsection (1) in respect of a relevant trust unless it is satisfied that the applicant has given notice in writing of the application—
(a) to the Revenue Commissioners, and
(b) to such persons as may be prescribed by rules of court,
at least 2 weeks before the hearing of the application.
(3) The court may hear an application made to it under subsection (1) otherwise than in public if it considers that it is appropriate to do so.
(4) The court shall determine an application made to it under subsection (1) in respect of a relevant trust—
(a) subject to paragraph (b), by making an order approving the arrangement specified in the application if it is satisfied that the carrying out of the arrangement would be for the benefit of—
(i) the relevant person specified in the application, and
(ii) any other relevant person,
(b) by refusing to make such an order in any case where—
(i) the court is not satisfied as referred to in paragraph (a), or
(ii) the Revenue Commissioners have satisfied the court that the application is substantially motivated by a desire to avoid, or reduce the incidence of, tax.
(5) In determining under subsection (4) whether an arrangement would be for the benefit of a relevant person, the court may have regard to any benefit or detriment, financial or otherwise, that may accrue to that person directly or indirectly in consequence of the arrangement.
(6) Nothing in this section shall be construed as derogating from or affecting the operation of—
(a) the Charities Acts 1961 and 1973 and the Charities Act 2009,
(b) any power of a court, whether under an enactment or rule of law, to—
(i) vary, revoke or resettle a trust (including a relevant trust), or
(ii) vary, enlarge, add to or restrict the powers of the trustees under a trust (including a relevant trust) to manage or administer the property the subject of the trust,
or
(c) any rule of law relating to the termination or revocation of a trust (including a relevant trust).
Settled Land Acts
1882 Act
An Act for facilitating Sales, Leases, and other dispositions of Settled Land, and for promoting the execution of improvements thereon. [10th August 1882.]
I. – PRELIMINARY
1. – (1) This Act may be cited as the Settled Land Act, 1882.
(2) This Act, except where it is otherwise expressed, shall commence and take effect from and immediately after the thirty-first day of December one thousand eight hundred and eighty-two, which time is in this Act referred to as the com mencement of this Act.
II. – DEFINITIONS
2. – (1) Any deed, will, agreement for a settlement, or other agreement, covenant to surrender, copy of court roll, Act of Parliament, or other instrument, or any number of instruments, whether made or passed before or after, or partly before and partly after, the commencement of this Act, under or by virtue of which instrument or instruments any land, or any estate or interest in land, stands for the time being limited to or in trust for any persons by way of succession, creates or is for purposes of this Act a settlement, and is in this Act referred to as a settlement, or as the settlement, as the case requires.
(2) An estate or interest in remainder or reversion not disposed of by a settle ment, and reverting to the settlor or descending to the testator’s heir, is for purposes of this Act an estate or interest coming to the settlor or heir under or by virtue of the settlement, and comprised in the subject of the settlement.
(3) Land, and any estate or interest therein, which is the subject of a settlement, is for purposes of this Act settled land, and is, in relation to the settlement, referred to in this Act as the settled land.
(4) The determination of the question whether land is settled land, for purposes of this Act, or not, is governed by the state of facts, and the limitations of the settlement, at the time of the settlement taking effect.
(5) The person who is for the time being, under a settlement, beneficially entitled to possession of settled land, for his life, is for purposes of this Act the tenant for life of that land, and the tenant for life under that settlement.
(6) If, in any case, there are two or more persons so entitled as tenants in common, or as joint tenants, or for other concurrent estates or interests, they together constitute the tenant for life for purposes of this Act.
(7) A person being tenant for life within the foregoing definitions shall be deemed to be such notwithstanding that, under the settlement or otherwise, the settled land, or his estate or interest therein, is incumbered or charged in any manner or to any extent.
(8) The persons, if any, who are for the time being, under a settlement, trustees with power of sale of settled land, or with power of consent to or approval of the exercise of such a power of sale, or if under a settlement there are no such trustees, then the persons, if any, for the time being, who are by the settlement declared to be trustees thereof for purposes of this Act, are for purposes of this Act trustees of the settlement.
(9) Capital money arising under this Act, and receivable for the trusts and purposes of the settlement, is in this Act referred to as capital money arising under this Act.
(10) In this Act –
(i) Land includes incorporated hereditaments, also an undivided share in land; income includes rents and profits; and possession includes receipt of income;
(ii) Rent includes yearly or other rent, and toll, duty, royalty, or other reservation, by the acre, or the ton, or otherwise; and, in relation to rent, payment includes delivery; and fine includes premium or fore-gift, and any payment, consideration, or benefit in the nature of a fine, premium, or fore-gift;
(iii) Building purposes include the erecting and the improving of, and the adding to, and the repairing of buildings; and a building lease is a lease for any building purposes or purposes connected therewith;
(iv) Mines and minerals mean mines and minerals whether already opened or in work, or not, and include all minerals and substances in, on, or under the land, obtainable by underground or by surface working; and mining purposes include the sinking and searching for, winning, work ing, getting, making merchantable, smelting or otherwise converting or working for the purposes of any manufacture, carrying away, and dis posing of mines and minerals, in or under the settled land, or any other land, and the erection of buildings, and the execution of engineering and other works, suitable for those purposes; and a mining lease is a lease for any mining purposes or purposes connected therewith, and includes a grant or licence for any mining purposes;
(v) Manor includes lordship, and reputed manor or lordship;
(vi) Steward includes deputy steward, or other proper officer, of a manor;
(vii) Will includes codicil, and other testamentary instrument, and a writing in the nature of a will;
(viii) Securities include stocks, funds, and shares;
(xi) Person includes corporation.
III. – SALE: ENFRANCHISEMENT; EXCHANGE; PARTITION
General Powers and Regulations
3. A tenant for life –
(i) May sell the settled land, or any part thereof, or any easement, right, or privilege of any kind, over or in relation to the same; and
(ii) Where the settlement comprises a manor – may sell the seignory of any freehold land within the manor, or the freehold and inheritance of any copyhold or customary land, parcel of the manor, with or without any exception or reservation of all or any mines or minerals, or of any rights or powers relative to mining purposes, so as in every such case to effect an enfranchisement; and
(iii) May make an exchange of the settled land, or any part thereof, for other
land, including an exchange in consideration of money paid for equality of exchange; and
(iv) Where the settlement comprises an undivided share in land, or, under the settlement, the settled land has come to be held in undivided shares – may concur in making partition of the entirety, including a partition in consideration of money paid for equality of partition.
4. – (1) Every sale shall be made at the best price that can reasonably be obtained.
(2) Every exchange and every partition shall be made for the best consideration in land or in land and money that can reasonably be obtained.
(3) A sale may be made in one lot or in several lots, and either by auction or by private contract.
(4) On a sale the tenant for life may fix reserve biddings and buy in at an auction.
(5) A sale, exchange, or partition may be made subject to any stipulations respecting title, or evidence of title, or other things.
(6) On a sale, exchange, or partition, any restriction or reservation with respect to buildings on or other user of land, or with respect to mines and minerals, or with respect to or for the purpose of the more beneficial working thereof, or with respect to any other thing, may be imposed or reserved and made binding as far as the law permits, by covenant, condition, or otherwise, on the tenant for life and the settled land, or any part thereof, or on the other party and any land sold or given in exchange or on partition to him.
(7) An enfranchisement may be made with or without a re-grant of any right of common or other right, easement, or privilege theretofore appendant or appurte nant to or held or enjoyed with the land enfranchised, or reputed so to be.
Special Powers
5. Where on a sale, exchange, or partition there is an incumbrance affecting land sold or given in exchange or on partition, the tenant for life, with the consent of the incumbrancer, may charge that incumbrance on any other part of the settled land, whether already charged therewith or not, in exoneration of the part sold or so given, and, by conveyance of the fee simple, or other estate or interest the subject of the settlement, or by creation of a term of years in the settled land, or otherwise, make provision accordingly.
IV. – LEASES
General Powers and Regulations
6. A tenant for life may lease the settled land, or any part thereof, or any easement, right, or privilege of any kind, over or in relation to the same, for any purpose whatever, whether involving waste or not, for any term not exceeding –
(i) In case of a building lease, ninety-nine years [N.B. raised to 150 years for land situate in an urban area by s. 62 of the Landlord and Tenant Act, 1931. Now the power to grant building leases has been abolished altogether in respect of ‘dwellings’ by the Landlord and Tenant (Ground Rents) Act, 1978, sees. 2. See Irish Land Law, Supp. (1975-80), p. 2];
(ii) In case of a mining lease, sixty years;
(iii) In case of any other lease, twenty-one years.
7. – (1) Every lease shall be by deed, and be made to take effect in possession not later than twelve months after its date.
(2) Every lease shall reserve the best rent that can reasonably be obtained, regard being had to any fine taken, and to any money laid out or to be laid out for the benefit of the settled land and generally to the circumstances of the case.
(3) Every lease shall contain a covenant by the lessee for payment of the rent, and a condition of re-entry on the rent not being paid within a time therein specified not exceeding thirty days.
(4) A counterpart of every lease shall be executed by the lessee and delivered to the tenant for life; of which execution and delivery the execution of the lease by the tenant for life shall be sufficient evidence.
(5) A statement, contained in a lease or in an indorsement thereon, signed by the tenant for life, respecting any matter of fact or of calculation under this Act in relation to the lease, shall, in favour of the Jessee and of those claiming under him, be sufficient evidence of the matter stated.
Building and Mining Leases
8. – (1) Every building lease shall be made partly in consideration of the Jessee, or some person by whose direction the lease is granted, or some other person, having erected, or agreeing to erect, buildings, new or additional, or having improved or repaired, or agreeing to improve or repair, buildings, or having executed, or agreeing to execute, on the land leased, an improvement authorised by this Act, for or in connection with building purposes.
(2) A peppercorn rent or a nominal or other rent Jess than the rent ultimately payable may be made payable for the first five years or any Jess part of the term.
(3) Where the land is contracted to be leased in Jots, the entire amount of rent to be ultimately payable may be apportioned among the Jots in any manner; save that-
(i) The annual rent reserved by any lease shall not be Jess than ten shillings; and
(ii) The total amount of the rents reserved on all leases for the time being granted shall not be Jess than the total amount of the rents which, in order that the leases may be in conformity with this Act, ought to be reserved in respect of the whole land for the time being leased; and
(iii) The rent reserved by any lease shall not exceed one-fifth part of the full annual value of the land comprised in that lease with the buildings thereon when completed.
9. – (1) In a mining lease –
(i) The rent may be made to be ascertainable by or to vary according to the acreage worked, or by or according to the quantities of any mineral or substance gotten, made merchantable, converted, carried away, or dis posed of, in or from the settled land, or any other land, or by or according to any facilities given in that behalf; and
(ii) A fixed or minimum rent may be made payable, with or without power for the Jessee, in case the rent, according to acreage or quantity, in any specified period does not produce an amount equal to the fixed or minimum rent, to make up the deficiency in any subsequent specified period, free of rent other than the fixed or minimum rent.
(2) A lease may be made partly in consideration of the lessee having executed, or his agreeing to execute, on the land leased, an improvement authorized by this Act, for or in connexion with mining purposes.
10. – (1) Where it is shown to the Court with respect to the district in which any settled land is situate, either –
(i) That it is the custom for land therein to be leased or granted for building or mining purposes for a longer term or on other conditions than the term or conditions specified in that behalf in this Act, or in perpetuity; or
(ii) That it is difficult to make leases or grants for building or mmmg purposes of land therein, except for a longer term or on other conditions than the term and conditions specified in that behalf in this Act, or except in perpetuity;
the Court may, if it thinks fit, authorize generally the tenant for life to make from time to time leases or grants of or affecting the settled land in that district, or parts thereof, for any term or in perpetuity, at fee-farm or other rents, secured by condition of re-entry, or otherwise, as in the order of the Court expressed, or may, if it thinks fit, authorize the tenant for life to make any such lease or grant in any particular case.
(2) Thereupon the tenant for life, and, subject to any direction in the order of the Court to the contrary, each of his successors in title being a tenant for life, or having the powers of a tenant for life under this Act, may make in any case, or in the particular case, a lease or grant of or affecting the settled land, or part thereof, in conformity with the order.
11. Under a mining lease, whether the mines or minerals leased are already opened or in work or not, unless a contrary intention is expressed in the settlement, there shall be from time to time set aside, as capital money arising under this Act, part of the rent as follows, namely, – where the tenant for life is impeachable for waste in respect of minerals, three fourth parts of the rent, and otherwise one fourth part thereof, and in every such case the residue of the rent shall go as rents and profits.
VI. – INVESTMENT OR OTHER APPLICATION OF CAPITAL TRUST MONEY
21. Capital money arising under this Act, subject to payment of claims properly payable thereout, and to application thereof for any special authorized object for which the same was raised, shall, when received, be invested or otherwise applied wholly in one, or partly in one and partly in another or others, of the following modes (namely);
(i) In investment on Government securities, or on other securities on which the trustees of the settlement are by the settlement or by law authorized to invest trust money of the settlement, or on the security of the bonds, mortgages, or debentures, or in the purchase of the debenture stock, of any railway company in Great Britain or Ireland, incorporated by special Act of Parliament, and having for ten years next before the date of investment paid a dividend on its ordinary stock or shares, with power to vary the investment into or for any other such securities;
(ii) In discharge, purchase, or redemption of incumbrances affecting the inheritance of the settled land, or other the whole estate the subject of the settlement, or of land-tax, rent charge in lieu of tithe, Crown rent, chief rent, or quit rent, charged on or payable out of the settled land;
(iii) In payment for any improvement authorized by this Act;
(iv) In payment for equality of exchange or partitition of settled land;
(v) In purchase of the seignory of any part of the settled land, being freehold land, ;
(vi) In purchase of the reversion or freehold in fee of any part of the settled land, being leasehold land held for years, or life, or years determinable on life;
(vii) In purchase of land in fee simple, or of leasehold land held for sixty
years or more unexpired at the time of purchase, subject or not to any exception or reservation of or in respect of mines or minerals therein, or of or in respect of rights or powers relative to the working of mines or minerals therein, or in other land;
(viii) In purchase, either in fee simple, or for a term of sixty years or more, of mines and minerals convenient to be held or worked with the settled land, or of any easement, right, or privilege convenient to be held with the settled land for mining or other purposes;
(ix) In payment to any person becoming absolutely entitled or empowered to give an absolute discharge;
(x) In payment of costs, charges, and expenses of or incidental to the exercise of any of the powers, or the execution of any of the provisions, of this Act:
(xi) In any other mode in which money produced by the exercise of a power of sale in the settlement is applicable thereunder.
22. – (1) Capital money arising under this Act shall, in order to its being invested or applied as aforesiad, be paid either to the trustees of the settlement or into Court, at the option of the tenant for life, and shall be invested or applied by the trustees, or under the direction of the Court, as the case may be, accordingly.
(2) The investment or other application by the trustees shall be made according to the direction of the tenant for life, and in default thereof, according to the discretion of the trustees, but in the last-mentioned case subject to any consent required or directions given by the settlement with respect to the investment or other application by the trustees of trust money of the settlement; and any invest ment shall be in the names or under the control of the trustees.
(3) The investment or other application under the direction of the Court shall be made on the application of the tenant for life, or of the trustees.
(4) Any investment or other application shall not during the life of the tenant for life be altered without his consent.
(5) Capital money arising under this Act while remaining uninvested or unap plied, and securities on which an investment of any such capital money is made, shall, for all purposes of disposition, transmission, and devolution, be considered as land, and the same shall be held for and go to the same persons successively, in the same manner and for and on the same estates, interests, and trusts, as the land wherefrom the money arises would, if not disposed of, have been held and have gone under the settlement.
(6) The income of those securities shall be paid or applied as the income of that land, if not disposed of, would have been payable or applicable under the settle ment.
(7) Those securities may be converted into money, which shall be capital money arising under this Act.
IX. – MISCELLANEOUS PROVISIONS
35. – (1) Where a tenant for life is impeachable for waste in respect of timber, and there is on the settled land timber ripe and fit for cutting, the tenant for life, on obtaining the consent of the trustees of the settlement or an order of the Court, may cut and sell that timber, or any part thereof.
(2) Three fourth parts of the net proceeds of the sale shall be set aside as and be capital money arising under this Act, and the other fourth part shall go as rents and profits.
37. – (1) Where personal chattels are settled on trust so as to devolve with land until a tenant in tail by purchase is born or attains the age of twenty-one years, or so as otherwise to vest in some person becoming entitled to an estate of freehold of inheritance in the land, a tenant for life of the land may sell the chattels or any of them.
(2) The money arising by the sale shall be capital money arising under this Act, and shall be paid, invested, or applied and otherwise dealt with in like manner in all respects as by this Act directed with respect to other capital money arising under this Act, or may be invested in the purchase of other chattels, of the same or any other nature, which, when purchased, shall be settled and held on the same trusts, and shall devolve in the same manner as the chattels sold.
(3) A sale or purchase of chattels under this section shall not be made without an order of the Court.
X. – TRUSTEES
38. – (1) If at any time there are no trustees of a settlement within the definition of this Act, or where in any other case it is expedient, for purposes of this Act, that new trustees of a settlement be appointed, the Court may, if it thinks fit, on the application of the tenant for life or any other person having, under the settlement, an estate or interest in the settled land, in possession, remainder, or otherwise, or, in the case of an infant, of his testamentary or other guardian, or next friend, appoint fit persons to be trustees under the settlement for purposes of this Act.
(2) The person so appointed, and the survivors and .survivor of them, while continuing to be trustees or trustee, and, until the appointment of new trustees, the personal representatives or representative for the time being of the last surviving or continuing trustee, shall for purposes of this Act become and be the trustees or trustee of the settlement.
39. – (1) Notwithstanding anything in this Act, capital money arising under this Act shall not be paid to fewer than two persons as trustees of a settlement, unless the settlement authorises the receipt of capital trust money of the settlement by one trustee.
(2) Subject thereto, the provisions of this Act referring to the trustees of a settlement apply to the surviving or continuing trustees or trustee of the settlement for the time being.
40. The receipt in writing of the trustees of a settlement, or where one trustee is empowered to act, of one trustee, or of the personal representatives or representa tive of the last surviving or continuing trustee, for any money or securities, paid or transferred to the trustees, trustee, representatives, or representative, as the case may be, effectually discharges the payer or transferor therefrom, and from being bound to see to the application or being answerable for any loss or misapplication thereof, and, in case of a mortgagee or other person advancing money, from being concerned to see that any money advanced by him is wanted for any purpose of this Act, or that no more than is wanted is raised.
41. Each person who is for the time being trustee of a setlement is answerable for what he actually receives only, notwithstanding his signing any receipt for conform ity, and in respect of his own acts, receipts, and defaults only, and is not answerable in respect of those of any other trustee, or of any banker, broker, or other person, or for the insufficiency or deficiency of any securities, or for any loss not happening through his own wilful default.
42. The trustees of a settlement, or any of them, are not liable for giving any consent, or for not making, bringing, taking, or doing any such application, action, proceeding, or thing, as they might make, bring, take, or do; and in case of purchase of land with capital money arising under this Act, or of an exchange, partition, or lease, are not liable for adopting any contract made by the tenant for life, or bound to inquire as to the propriety of the purchase, exchange, partitition, or lease, or answerable as regards any price, consideration, or fine, and are not liable to see to or answerable for the investigation of the title, or answerable for a conveyance of land, if the conveyance purports to convey the land in the proper mode, or liable in respect of purchase-money paid by them by direction of the tenant for life to any person joining in the conveyance as a conveying party, or as giving a receipt for the purchase-money, or in any other character, or in respect of any other money paid by them by direction of the tenant for life on the purchase, exchange, partition, or lease.
43. The trustees of a settlement may reimburse themselves or pay and discharge out of the trust property all expenses properly incurred by them.
44. If at any time a difference arises between a tenant for life and the trustees of the settlement respecting the exercise of any of the powers of this Act, or respecting any matter relating thereto, the Court may, on the application of either party, give such directions respecting the matter in difference, and respecting the costs of the application, as the Court thinks fit.
45. – (1) A tenant for life, when intending to make a sale, exchange, partition, lease, mortgage, or charge, shall give notice of his intention in that behalf to each of the trustees of the settlement, by posting registered letters containing the notice, addressed to the trustees, severally, each at his usual or last known place of abode in the [Republic of Ireland], and shall give like notice to the solicitor for the trustees, if any such solicitor is known to the tenant for life, by posting a registered letter, containing the notice, addressed to the solicitor at his place of business in the [Republic of Ireland], every letter under this section being posted not less than one month before the making by the tenant for life of the sale, exchange, partition, lease, mortgage, or charge, or of a contract for the same.
(2) Provided that at the date of notice given the number of trustees shall not be less than two, unless a contrary intention is expressed in the settlement.
(3) A person dealing in good faith with the tenant for life is not concerned to inquire respecting the giving of any such notice as is required by this section.
XII. – RESTRICTION, SAVINGS, AND GENERAL PROVISIONS
50. – (1) The powers under this Act of a tenant for life are not capable of assignment or release, and do not pass to a person as being, by operation of law or otherwise, an assignee of a tenant for life, and remain exerciseable by the tenant for life after and notwithstanding any assignment, by operation of law or otherwise, of his estate or interest under the settlement.
(2) A contract by a tenant for life not to exercise any of his powers under this Act is void.
(3) But this section shall operate without prejudice to the rights of any person being an assignee for value of the estate or interest of the tenant for life; and in that case, the assignee’s rights shall not be affected without his consent, except that, unless the assignee is actually in possession of the settled land or part thereof, his consent shall not be requisite for the making of leases thereof, by the tenant for life, provided the leases are made at the best rent that can reasonably be obtained, without fine, and in other respects are in confirmity with this Act.
(4) This section extends to assignments made or coming into operation before or after and to acts done before or after the commencement of this Act; and in this section assignment includes assignment by way of mortgage, and any partial or qualified assignment, and any charge or incumbrance; and assignee has a meaning corresponding with that of assignment.
51. – (1) If in a settlement, will, assurance, or other instrument executed or made before or after, or partly before and partly after, the commencement of this Act a provision is inserted purporting or attempting, by way of direction, decla ration, or otherwise, to forbid a tenant for life to exercise any power under the Act, or attempting, or tending, or intended, by a limitation, gift, or disposition over of settled land, or by a liamitation, gift, or disposition of other real or any personal property, or by the imposition of any condition, or by forfeiture, or in any other manner whatever, to prohibit or prevent him from exercising, or to induce him to abstain from exercising, or to put him into a position inconsistent with his exercis ing, any power under this Act, that provision, as far as it purports, or attempts, or tends, or is intended to have, or would or might have, the operation aforesaid, shall be deemed to be void.
(2) For the purposes of this section an estate or interest limited to continue so long only as a person abstains from exercising any power shall be and take effect as an estate or interest to continue for the period for which it would continue if that person were to abstain from exercising the power, discharged from liability to determination or cesser by or on his exercising the same.
52. Notwithstanding anything in a settlement, the exercise by the tenant for life of any power under this Act shall not occasion a forfeiture.
53. A tenant for life shall, in exercising any power under this Act, have regard to the interests of all parties entitled under the settlement, and shall, in relation to the exercise thereof by him, be deemed to be in the position and to have the duties and liabilities of a trustee for those parties.
54. On a sale, exchange, partition, lease, mortage, or charge, a purchaser, lessee, mortgagee, or other person dealing in good faith with a tenant for life shall, as against all parties entitled under the settlement, be conclusively taken to have given the best price, consideration, or rent, as the case may require, that could reasonably be obtained by the tenant for life, and to have complied with all the requisitions of this Act.
55. – (1) Powers and authorities conferred by this Act on a tenant for life or trustees or the Court or [the Commissioners of Public Works in Ireland] are exerciseable from time to time.
(2) Where a power of sale, enfranchisement, exchange, partition, leasing, mortgaging, charging, or other power is exercised by a tenant for life, or by the trustees of a settlement, he and they may respectively execute, make, and do all deeds, instruments, and things necessary or proper in that behalf.
(3) Where any provision in this Act refers to sale, purchase, exchange, partition, leasing, or other dealing, or to any power, consent, payment, receipt, deed, assurance, contract, expenses, act, or transaction, the same shall be construed to extend only (unless it is otherwise expressed) to sales, purchases, exchanges, partitions, leasings, dealings, powers, consents, payments, receipts, deeds, assur ances, contracts, expenses, acts, and transactions under this Act.
56. – (1) Nothing in this Act shall take away, abridge, or prejudicially affect any power for the time being subsisting under a settlement, or by statute or otherwise, exerciseable by a tenant for life, or by trustees with his consent, or on his request, or by his direction, or otherwise; and the powers given by this Act are cumulative.
(2) But, in case of conflict between the provisions of a settlement and the provisions of this Act, relative to any matter in respect whereof the tenant for life exercises or contracts or intends to exercise any power under this Act, the provi sions of this Act shall prevail; and, accordingly, notwithstanding anything in the settlement, the consent of the tenant for life shall, by virtue of this Act, be necessary to the exercise by the trustees of the settlement or other person of any power conferred by the settlement exerciseable for any purpose provided for in this Act.
(3) If a question arises, or a doubt is entertained, respecting any matter within this section, the Court may, on the application of the trustees of the settlement, or of the tenant for life, or of any other person interested, give its decision, opinion, advice, or direction thereon.
57. – (1) Nothing in this Act shall preclude a settlor from conferring on the tenant for life, or the trustees of the settlement, any powers additional to or larger than those conferred by this Act.
(2) Any additional or larger powers so conferred shall, as far as may be, notwithstanding anything in this Act, operate and be exerciseable in the like manner, and with all the like incidents, effects, and consequences, as if they were conferred by this Act, unless a contrary intention is expressed in the settlement.
XIII. – LIMITED OWNERS GENERALLY
58. – (1) Each person as follows shall, when the estate or interest of each of them is in possession, have the powers of a tenant for life under this Act, as if each of them were a tenant for life as defined in this Act (namely):
(i) A tenant in tail, including a tenant in tail who is by Act of Parliament restrained from barring or defeating his estate tail, and although the reversion is in the [State], and so that the exercise by him of his powers under this Act shall bind the [State], but not including such a tenant in tail where the land in respect whereof he is so restrained was purchased with money provided by Parliament in consideration of public services:
(ii) A tenant in fee simple, with an executory limitation, gift, or disposition over, on failure of his issue, or in any other event;
(iii) A person entitled to a base fee, although the reversion is in the [State], and so that the exercise by him of his powers under this Act shall bind the [State];
(iv) A tenant for years determinable on life, not holding merely under a lease at a rent;
(v) A tenant for the life of another, not holding merely under a lease at a rent;
(vi) A tenant for his own or any other life, or for years determinable on life, whose estate is liable to cease in any event during that life, whether by expiration of the estate, or by conditional limitation, or otherwise, or to be defeated by an executory limitation, gift, or disposition over, or is subject to a trust for accumulation of income for payment of debts or other purpose;
(vii) A tenant in tail after possibility of issue extinct;
(viii) A tenant by the curtesy [Repealed as regards the estate of a person dying after 1st Jan. 1967 by the Successive Act, 1965, see ss. 8 and 9 and Sch. 2, Pt. III];
(ix) A person entitled to the income of land under a trust or direction for payment thereof to him during his own or any other life, whether subject to expenses of management or not, or until sale of the land, or until forfeiture of his interest therein on bankruptcy or other event.
(2) In every such case, the provisions of this Act referring to a tenant for life, either as conferring powers on him or otherwise, and to a settlement, and to settled land, shall extend to each of the persons aforesaid and to the instrument under which his estate or interest arises, and to the land therein comprised.
(3) In any such case any reference in this Act to death as regards a tenant for life shall, where necessary, be deemed to refer to the determination by death or otherwise of such estate or interest as last aforesaid.
XIV. – INFANTS; MARRIED WOMEN; LUNATICS
59. Where a person, who is in his own right seised of or entitled in possession to land, is an infant, then for purposes of this Act the land is settled land, and the infant shall be deemed tenant for life thereof.
60. Where a tenant for life, or a person having the powers of a tenant for life under this Act, is an infant, or an infant would, if he were of full age, be a tenant for life, or have the powers of a tenant for life under this Act, the powers of a tenant for life under this Act may be exercised on his behalf by the trustees of the settlement, and if there are none, then by such person and in such manner as the Court, on the application of a testamentary or other guardian or next friend of the infant, either generally or in a particular instance, orders.
XV. -SETTLEMENT BY WAY OF TRUSTS FOR SALE
63. – (1) Any land, or any estate or interest in land, which under or by virtue of any deed, will, or agreement, covenant to surrender, copy of court roll, Act of Parliament, or other instrument or any number of instruments, whether made or passed before or after, or partly before and partly after, the commencement of this Act, is subject to a trust or direction for sale of that land, estate, or interest, and for the application or disposal of the money to arise from the sale, or the income of that money, or the income of the land until sale, or any part of that money or income, for the benefit of any person for his life, or any other limited period, or for the benefit of two or more persons concurrently for any limited period, and whether absolutely, or subject to a trust for accumulation of income for payment of debts or other purposes, or to any other restriction, shall be deemed to be settled land, and the instrument or instruments under which the trust arises shall be deemed to be a settlement; and the person for the time being beneficially entitled to the income of the land, estate, or interest aforesaid until sale, whether absolutely or subject as aforesaid, shall be deemed to be tenant for life thereof; or if two or more persons are so entitled concurrently, then those persons shall be deemed to constitute together the tenant for life thereof; and the persons, if any, who are for the time being under the settlement trustees for sale of the settled land, or having power of consent to, or approval of, or control over the sale, or if under the settlement there are no such trustees, then the persons, if any, for the time being, who are by the settlement declared to be trustees thereof for purposes of this Act, are for purposes of this Act trustees of the settlement.
(2) In every such case the provisions of this Act referring to a tenant for life, and to a settlement, and to settled land, shall extend to the person or persons aforesaid, and to the instrument or instruments under which his or their estate or interest arises, and to the land therein comprised, subject and except as in this section provided (that is to say):
(i) Any reference in this Act to the predecessors or successors in title of the tenant for life, or to the remaindermen, or reversioners or other persons interested in the settled land, shall be deemed to refer to the persons interested in succession or otherwise in the money to arise from sale of the land, or the income of that money, or the income of the land, until sale (as the case may require).
(ii) Capital money arising under this Act from the settled land shall not be applied in the purchase of land unless such application is authorized by the settlement in the case of capital money arising thereunder from sales or other dispositions of the settled land, but may, in addition to any other mode of application authorized by this Act, be applied in any mode in which capital money arising under the settlement from any such sale or other disposition is applicable thereunder, subject to any consent required or direction given by the settlement with respect to the appli cation of trust money of the settlement.
(iii) Capital money arising under this Act from the settled land and the securities in which the same is invested, shall not for any purpose of disposition, transmission, or devolution, be considered as land unless the same would, if arising under the settlement from a sale or disposition of the settled land, have been so considered, and the same shall be held in trust for and shall go to the same persons successively in the same manner, and for and on the same estates, interests, and trusts as the same would have gone and been held if arising under the settlement from a sale or disposition of the settled land, and the income of such capital money and securities shall be paid or applied accordingly.
(iv) Land of whatever tenure acquired under this Act by purchase, or in exchange, or on partition, shall be conveyed to and vested in the trustees of the settlement, on the trusts, and subject to the powers and provisions which, under the settlement or by reason of the exercise of any power of appointment or charging therein contained, are subsisting with respect to the settled land, or would be so subsisting if the same had not been sold, or as near thereto as circumstances permit, but so as not to increase or multiply charges or powers of charging.
Settled Land Act 1884
An Act to amend the Settled Land Act, 1882. [3rd July 1884].
6. – (1) In the case of a settlement within the meaning of section sixty-three of the Act of 1882, any consent not required by the terms of the settlement is not by force of anything contained in that Act to be deemed necessary to enable the trustees of the settlement, or any other person, to execute any of the trusts or powers created by the settlement.
(2) In the case of every other settlement, not within the meaning of section sixty-three of the Act of 1882, where two or more persons together constitute the tenant for life for the purposes of that Act, then, notwithstanding anything con tained in subsection (2) of section fifty-six of that Act, requiring the consent of all those persons, the consent of one only of those persons is by force of that section to be deemed necessary to the exercise by the trustees of the settlement, or by any other person, of any power conferred by the settlement exerciseable for any purpose provided for in that Act.
(3) This section applies to dealings before, as well as after, the passing of this Act.
7. With respect to the powers conferred by section sixty-three of the Act of 1882, the following provisions are to have effect:
(i) Those powers are not to be exercised without the leave of the Court.
(ii) The Court may by order, in any case in which it thinks fit, give leave to exercise all or any of those powers, and the order is to name the person or persons to whom leave is given.
(iii) The Court may from time to time rescind, or vary, any order made under this section, or may make any new or further order.
(iv) So long as an order under this section is in force, neither the trustees of the settlement, nor any person other than a person having the leave, shall execute any trust or power created by the settlement, for any purpose for which leave is by the order given, to exercise a power conferred by the Act of 1882.
(v) An order under this section may be registered and re-registered, as a !is pendens, against the trustees of the settlement named in the order, describing them on the register as ‘Trustees for the purposes of the Settled Land Act, 1882’.
(vi) Any person dealing with the trustees from time to time, or with any other person acting under the trusts or powers of the settlement, is not to be affected by an order under this section, unless and until the order is duly registered, and when necessary re-registered as a !is pendens.
(vii) An application to the Court under this section may be made by the tenant for life, or by the persons who together constitute the tenant for life, within the meaning of section sixty-three of the Act of 1882.
(viii) An application to rescind or vary an order, or to make any new or further order under this section, may be made also by the trustees of the settlement, or by any person beneficially interested under the settle ment.
(ix) The person or persons to whom leave is given by an order under this section, shall be deemed to be the proper person or persons to exercise the powers conferred by section sixty-three of the Act of 1882, and shall have, and may exercise those powers accordingly.
(x) This section is not to affect any dealing which has taken place before the passing of this Act, under any trust or power to which this section applies.
Settled Land Act 1890
An Act to amend the Settled Land Acts, 1882 to 1889. [18th August 1890.]
Trustees
16. Where there are for the time being no trustees of the settlement within the meaning and for the purposes of the Act of 1882, then the following persons shall, for the purposes of the Settled Land Acts, 1882 to 1890, be trustees of the settlement; namely,
(i) The persons (if any) who are for the time being under the settlement trustees, with power of or upon trust for sale of any other land com prised in the settlement and subject to the same limitations as the land to be sold, or with power of consent to or approval of the exercise of such a power of sale, or, if there be no such persons, then
(ii) The persons (if any) who are for the time being under the settlement trustes, with future power of sale, or under a future trust for sale of the land to be sold, or with power of consent to or approval of the exercise of such a future power of sale, and whether the power or trust takes effect in all events or not.
19. The registration of a writ or order affecting land may be vacated pursuant to an order of the High Court or any judge thereof.
Succession Act Provision
50. – …
(3) Where land is settled by will and there are no trustees of the settlement, the personal representatives proving the will shall for all purposes be deemed to be trustees of the settlement until trustees of the settlement are appointed, but a sole personal representative shall not be deemed to be a trustee for the purposes of the Settled Land Acts, 1882 to 1890, until at least one other trustee is appointed.
58. – …
(2) Where an infant becomes entitled to any estate or interest in land on intestacy and consequently there is no instrument under which the estate or interest of the infant arises or is acquired, that estate or interest shall be deemed to be the subject of a settlement for the purposes of the Settled Land Acts, 1882 to 1890, and the persons who are trustees under section 57 [of the Succession Act) shall be deemed to be the trustees of that settlement.
Cases
Re Blake’s Settled Estates
[1932] I.R. 637 (Supreme Court)
An application was made for the appointment of trustees of an alleged ‘compound settlement’ consisting of a marriage settlement made in 1832, a disentailing deed made in 1864 (between A.W.B. of the first part, J.A.D. of the second part, and R.B.’of the third part), and the will of the said J.A.D. made in 1909, and a codicil thereto. Under the marriage settlement lands were settled subject to certain then existing charges and on usual trusts, and the said J.A.D., becoming tenant in tail in possession, subsequently executed the disentailing deed, and became owner in fee subject to these charges. Meredith J. held that after execution of the disentailing deed there was no settlement within the meaning of the Settled Land Acts and the only settlement still existing was under the will of J.A.D. Thus he refused the application and an appeal was lodged to the Supreme Court.
Murnaghan J. (delivering the judgment of the Court):
By an indenture of marriage settlement, dated 30th April, 1864, certain lands in County Galway were subject to certain incumbrances enumerated in a Schedule thereto, settled upon uses and trusts. One of these incumbrances was a mortgage, dated 28th March, 1822, for £5,000 (Irish), and puisne to it was a charge of £3,000 created by a marriage settlement, dated 25th September, 1882, in favour of the younger children of the marriage of Andrew William Blake with Maria Blake, otherwise Daly. By the said settlement, dated 25th September, 1832, a term of 500 years was limited to trustees after the decease of Andrew William Blake, or in his lifetime with his consent, ‘by sale or mortgage or any other disposition of the lands for all or any part of the same term or out of the rents, issues and profits to raise the said charge of £3,000.’
John Archer Daly, who was tenant for life under the settlement of 30th April, 1864, became, on the death of his son, Denis Daly in 1901, entitled to the reversion in fee simple, and he, by his will, dated 13th February, 1909, resettled the lands under which will Denise Anne Marie Cole is now tenant for life.
Portions of the lands have been sold in the Court of the Land Commission and the purchase money has been allocated in part payment of the mortgage, dated 25th September, 1822, leaving a considerable sum still due. The portions charge created by the settlement of 1832 was appointed in various sums, and, although no interest has been paid on the greater portion of the charge for many years, it would seem that part at least of the portions charge has had interest paid in recent times so as to keep portion of the charge alive.
With the object of making title to certain lands of Furbough not comprised in the Land Commission sale, application has been made to Mr. Justice Meredith to appoint trustees of the settlement consisting of the portions term of 500 years and the settlement made by the will of John Archer Daly. Mr. Poole, in making the application, drew the attention of Mr. Justice Meredith ‘to the remarks of Russell
J. in the case of Lord Alington and the London County Council’s Contract ([1927) 2 Ch. 253), and the learned Judge refused the application. On this appeal we are asked to say that in the circumstances and on the construction of the Settled Land Acts it would be proper to appoint trustees of the settlements above referred to. Such trustees, if appointed, are frequently referred to as trustees of a ‘compound settlement’, a refinement of phraseology which throws an air of mystery over such applications. No such term is found in the Settled Land Acts, but the definition of the word ‘settlement’ as used in the Act of 1882 is ‘any deed, will or other instrument, or any number of instruments, whether made before or after, or partly before and partly after, the commencement of this Act, under or by virtue of which instrument or instruments any land, or any estate or interest in land, stands for the time being limited to or in trust for any persons by way of succession, creates or is for the purposes of this Act a settlement, and is in this Act referred to as a settlement, or as the settlement, as the case requires’.
Under sect. 20 the tenant for life, exercising the power of sale, can convey or create the estate intended to be dealt with for the estate or interest the subject of the settlement, discharged from all the limitations, powers and provisions of the settlement, and from all estates, interests, and charges subsisting or to arise thereunder, but subject to and with the exception of as there mentioned, viz.:
(i) all estates, interests, and charges having priority to the settlement; and
(ii) all such other, if any, estates, interests, and charges as have been conveyed or created for securing money actually raised at the date of the deed; and
(iii) leases and certain other interests specified.
If the statutory settlement within the meaning of the definition clause in the Act applies, it is highly convenient to appoint trustees of this statutory settlement, and a tenant for life under this statutory settlement can convey the estate without requir ing the concurrence of parties having interests under the settlement save those specified in sect. 20, with the result that the claim of such persons attaches to the capital moneys. In In re Marquis of Ailesbury and Lord Iveagh ([1893) 2 Ch. 345), Stirling J. held that the tenant for life under a settlement made in 1885 was able to convey the estate free from jointure rent-charges supported by terms of years created by earlier settlements – all the settlements forming a statutory settlement under the Act. In In re Mundy and Roper’s Contract ([1899) 1 Ch. 275, at p. 290), Lindley and Chitty L.JJ. in a joint judgment interpreted the words ‘stands for the time being limited to or in trust for any persons by way of succession’ as including the case of a jointure and portions for younger children limited to arise on or after the death of a tenant for life, and the terms of years limited to trustees to secure them. They said in their judgement: ‘The jointress and the portioners take an interest in the land, and they succeed to their interests in the land on or after the death of the tenant for life’. Vaughan Williams L.J. stated his view that such terms were mere charges overriding the successive limitations, and coming into operation contemporaneously with those limitations. But he thought a broad view should be taken of the Act so as to enable the tenant for life to sell.
Since the decision of the Court of Appeal in In re Mundy and Roper’s Contract ([1899) 1 Ch. 275) applications have been successfully made to the Court to appoint trustees of a ‘settlement’ where jointures and portions, whether secured or not by terms of years, subsist under a settlement prior to another settlement under which there is a person having the powers of a tenant for life. In re Phillimore’s Estate ([1904) 2 Ch. 460) dealt with lands under which the settlor declared trusts under which he made himself tenant for life with trusts in remainder to pay five annuities for life and subject thereto for himself absolutely, and by his will he resettled the property. It was held, following the decision in Mundy and Roper’s Contract ([1899] 1 Ch. 275), that the various instruments made one settlement under the Act. In In re Marshall’s Settlement ([1905] 2 Ch. 325) the settlor took an estate for life and also the remainder in fee subject to a jointure and to a term to raise portions for children. Here there was only one settlement, but it was held that the lands stood for the time being limited ‘to or in trust for persons by way of succession’. In In re Monckton’s Settlement ([1917] 1 Ch. 224) under a settlement lands stood settled to A for life subject to a certain term of years to secure portions and after A’s life to a jointure and further portions and thereafter to B in fee. It was likewise held that the lands stood limited for persons by way of succession.
It appears to us that the cases which have already been decided do not involve a principle that the mere existence of a portions charge under a settlement which is otherwise spent is enough to create a limitation of lands to or in trust for persons in succession. We do not think the instrument creating the portions charge so subsist ing comes within the definition of a ‘settlement’ in the Settled Land Act, 1882, and accordingly we are of opinion that Meredith J. was correct in refusing to appoint trustees of a number of instruments of which the instrument including the portions charge was one.
We were pressed with the convenience which would arise if the order were made, but we are bound in the circumstances to say whether the view of the law taken by Meredith J. was correct, and in our opinion it was correct.
Burke v Gore
(1884) 13L.R. Ir. 367
Chatteron V.-C.:.
The fund in Court is personal estate of Colonel Edwards, which, by his will, was vested in trustees upon trust to invest in the purchase of real and freehold estate in the counties of Cork or Tyrone, to be settled to the same uses as those declared as to his other estates, which were devised in strict settlement.
It was necessarily admitted by Mr. Campion that the proposed investment is not within the express trusts of the will, and is one that could not be sanctioned by the Court, acting within its ordinary powers in this administration suit. He sought, therefore, to maintain it under the provisions of the Settled Land Act, 1882. I have had occasion more than once to express my opinion here, that the administration of that Act, so far as it concerns this Court, requires great care and vigilance to guard against its extraordinary powers being used to injure or defraud persons entitled in remainder. It confers powers upon tenants for life to deal with settled lands nearly as if they were absolute owners, imposing checks and conditions upon the exercise of those powers, which, I fear, will, in many cases, be found insufficient to prevent disastrous consequences. With its policy I have nothing to do; but in administering it I do not think that its provisions are to be enlarged beyond what its terms clearly require.
Mr. Campion relied on the 33rd section, which provides that ‘where, under a
settlement, money is in the hands of trustees, and is liable to be laid out in the purchase of land, to be made subject to the settlement, then, in addition to such powers of dealing therewith as the trustees have, independently of this Act, they may, at the option of the tenant for life, invest or apply the same as capital money arising under this Act.’ But this section does not appear to me to apply, as the money sought to be invested is not in the hands of trustees, nor can it be invested, applied, or otherwise dealt with by them. This is the only section that treats money as capital money under the Act, which has not been produced by some dealing with settled land under its provisions. I cannot find any clause which treats the Court as a trustee for its purposes.
The summons asks in the alternative that the Court shall appoint trustees under the 38th section for the purposes of the Act. I do not think that the trustees of the will here are trustees of it as a settlement within the meaning of the Act, as they have no power of sale of settled land, or any power of consent to or approval of the exercise of such a power of sale, and are therefore not within the definition in the 8th sub-division of the 2nd section. The case therefore would be within the 38th section. The exercise of the power under that section is however optional with the Court, and it is with reference to it that I consider that the greatest caution is necessary. When once trustees are thus appointed they and the tenant for life, at whose instance application for their appointment will generally take place, become, in fact, complete masters of the fund. The only protection to those in remainder against the tenant for life in such cases are trustees who, in general, are proposed for approval by him, and as to whom in many cases it will be difficult for the Court to obtain satisfactory information. In my opinion the Court, on application to appoint trustees under this section, should not only require to be satisfied of the fitness of the proposed trustees, but also that the purpose for which their appoint ment is applied for is such as to render their appointment safe and beneficial to all parties interested.
In this case I am asked to appoint trustees for the purpose of an investment not
authorised by the will, and one which may materially interfere with the purpose to which the trust appropriates the fund. To be of any avail it must be followed by an order to transfer this large sum of Stock to the trustees, when so appointed. I am asked to constitute trustees, and to hand over to them this money in order to bring the fund within the terms of the 33rd section. I am not prepared to take this course.
In addition to the reasons I have mentioned, I must bear in mind in exercising my discretion that the purpose to which, by the will, this money is to be devoted, namely, the purchase of land to be settled, requires it to be so invested as to be readily available should an eligible purchase present itself. I regret to say that in the present state of landed property in this country, a mortgage, even on what appears to be abundant security under ordinary circumstances, is not one which would afford reasonable certainty of the money being readily available for the testator’s purpose.
Re Tuthill
[1907] 1 LR. 305 (Chancery Division)
Under a marriage settlement land was vested in trustees subject to a trust for sale and J.F.T. was tenant for life of one undivided thirteenth share of the land. On sale of the land under the Land Purchase Acts the question arose as to whether J.F.T. was ‘deemed’ to be tenant for life under section 63 of the Settled Land Act, 1882, and whether the leave of the court should be granted under section 7 of the 1884 Act.
Meredith M.R.:
I hope that the discussion which has taken place will serve a useful purpose. It is, I think, important that all parties concerned in the sale and transfer of estates in this country should understand clearly that a person who, by virtue of sect. 63 of the Settled Land Act, 1882, is ‘deemed to be’ tenant for life of settled land in Ireland is not entitled, as a mere matter of course, to an order under sect. 7 (ii) of the Settled Land Act, 1884. The law has not been altered by the Irish Land Acts of 1903 and 1904. The most casual reader of the judgment delivered by Barton, J., in the case of In re lever’s Settlements ([1904] 1 LR. 492), cannot fail to observe that the learned Judge acted on the principle established by numerous authorities – of which the cases cited by Mr. Mecredy (In re Bagot’s Settlement [1894] 1 Ch. 177); In re Danie/l’s Settled Estates [1894] 3 Ch. 503) are typical examples – that applications under sect. 7 (ii) of the Act of 1884 must be dealt with by the Court in the exercise of judicial discretion applied to the circumstances of each particular case. The mere fact that the discretion is invoked in aid of a sale under the Irish Land Acts of 1903 and 1904 is not enough to justify the Court in giving an applicant leave to sell or proceed with a sale of the settled land.
The Court must be satisfied that the sale, if carried out, will be for the benefit of all parties interested under the settlement.
In the case already referred to, Barton, J., was satisfied on the facts before him that the sale was ‘an advantageous one for all parties concerned, or entitled under the settlement.’ Being so satisfied, he gave his sanction to the sale, notwithstanding the provisions of sect. 48 of the Act of 1903 and sect. 3(1) of the Act of 1904. In the present cases I am satisfied, on the facts before me, that the proposed sales will result in benefit to all parties interested under the respective settlements. The terms arranged are satisfactory.
No doubt the terms arranged would be still more satisfactory to the parties interested – other than the proposed vendors – if the percentage payable under section 48 was in each case to be added to the purchase-money; but I follow the decision of Barton, J., in reference to this somewhat delicate matter, and I respect fully adopt his language (pages 495, 496): ‘It is, in my opinion, no objection to an application of this kind that the applicant, if he is otherwise acting honestly and for the advantage of all persons interested, may be influenced by an inducement which the Legislature has, for reasons of public policy, held out to him, or that he will gain a benefit which the Legislature has expressed an intention of conferring upon him. In the absence of any other objection to the application, I see no sufficient ground for withholding the leave of the Court.’
With regard to the question of costs, I confess I have felt considerable difficulty in dealing with the costs of the applicants. The arguments of Mr. Conner and Mr. Wilson, however, have convinced me that in the present cases, at all events, the applicants are entitled to an order directing their costs to be paid out of the proceeds of the respective sales. The trustees are entitled to a like order.
Re Fitzgerald
[1902] 1 LR. 162;
Porter M.R.:
The question raised by the summons is this: The testatrix left the house, 29 Merrion-square, to Miss O’Grady, who is one the plaintiffs in the action, for her life, with a direction that she should make it her principal place of residence, and with a gift over if she did not do so. The gift of the house in this way is clearly within section 51 of the Settled Land Act, 1882, and, therefore, void for the purposes of that Act. If the gift of the house stood alone Miss O’Grady might have found it desirable not to take advantage of it, but there were two legacies of £5000 each, the interest of which was given to her, one by the will, the other by a codicil, for life, or as long as she made the house, 29 Merrion-square, her principal residence, with a direction that upon her death or ceasing to make the house her principal residence these legacies were to fall into the residue. Thus not only is the condition of residence imposed on Miss O’Grady, but there is a gift over if she fails to perform the condition.
The policy of the Settled Land Act, 1882, was to render lands however settled, absolutely disposable by sale, so that there should not be any land not capable of changing hands. Section 51 of that Act is as follows: ‘If in a will a provision is inserted purporting or attempting, by way of direction, declaration, or otherwise, to forbid a tenant for life to exercise any power under this Act, or attempting, or tending, or intended by a limitation, gift, or disposition over of settled land, or by a limitation, gift, or disposition of other real or personal property, or by the impo sition of any condition, or by forfeiture, or in any other manner whatever, to prohibit or prevent him from exercising, or to induce him to abstain from exercis ing, or to put him into a position inconsistent with his exercising any power, or tends, or is intended to have, or would or might have the operation aforesaid, shall be deemed to be void.’ This applies to the house itself in this case as it is ‘settled land’; but the important part of the section for the present purpose is contained in the subsequent words which I have read, which extend the prohibition of an attempt to prevent the tenant for life exercising any power under the Act (e.g. the power of sale) to an attempt to do so by a limitation, gift, or disposition of other real or personal property. The only question I have to consider is, does this prohibition apply to a disposition of other, i.e. collateral property? It is perfectly clear from the words of the section that it does, even if there was no decision to that effect. The gift to Miss O’Grady of the interest on the two sums of £5000 as long as she makes the house her principal residence is a provision which not only tends to prevent, but has the effect of preventing, her selling the house, and, therefore, it is to be deemed void for the purposes of the Act, with the result that she will not lose the interest on the legacies if she sells the house.
The case of In re Thompson (21 L.R. Ir. 107) is a direct authority on the point, and so is the case of In re Smith, Grose-Smith v. Bridge ([1899] 1 Ch. 331) which goes further than the present case, as there the provision which tended to prevent a sale of the settled land was contained in an instrument different from that under which the tenancy for life of the settled land was created. The policy of the Act is that the tenant for life is to have full power to sell the settled land, and any condition imposed to prevent his exercising this power is not only inapplicable to the settled land, but is to be deemed void, that is to say is inapplicable to any other property to which the condition is attached.
I must, therefore, answer the question asked by the summons by saying that, in the event of the sale of the house, 29 Merrion-square, the gift over of the legacies of
£5000 each is void under the Act and does not take effect.
Hughes v Fanagan
(1891) 30 L.R. Ir. 111 (Court of Appeal)
Porter M.R.:
If we entertained any serious doubt we should let this case stand for consider ation. But inasmuch as the Exchequer Division have reluctantly decided in favour of the defendant, and only because they thought themselves constrained so to decide in deference to certain English authorities, we have the less hesitation in giving our decision at once, seeing it is in accordance with the opinion of the Exchequer Division.
It appears that in July, 1889, the defendant Fanagan agreed with Harvey, the tenant for life under the settlement, to take a lease of the lands for thirty-five years. That agreement does not purport to be one made by virtue of the Settled Land Act, 1882. But I am quite certain that it bound Harvey, and, though not under the Settled Land Act, was in itself perfectly unobjectionable. Harvey died within five months from the making of this agreement. The contract does not in terms purport to bind the persons entitled in remainder with whom Harvey was not in privity; but it is said by the defendant that owing to the provisions of the Settled Land Act, 1882, this contract is binding on the settled land.
It is unfortunate that Fanagan did not see to having the lease completed. However, he omitted to do so while he could, and now as the tenant for life is dead he has lost the opportunity of ever having it executed as a lease.
The contention that the contract is binding on the settled land has been based mainly on the 31st section of the Settled Land Act, 1882, 45 & 46 Viet. c. 38. Sub-section 1, clause iii. of this section provides that the tenant for life may contract to make any lease, and in making the lease may vary the terms, but so that the lease be in conformity with the Act. Next follow three clauses relating to other contracts authorized to be made, and then comes this clause: – ‘Every contract shall be binding on, and shall enure for the benefit of the settled land, and shall be enforceable against and by every successor in title for the time being of the tenant for life, and may be carried into effect by any such successor.’ Of course the words ‘every contract’ occurring at the beginning of this clause must receive some rational construction, and manifestly must be restricted so as to include only contracts within or authorized by the Act.
The concluding sub-section of this section calls for some observation. It provides ‘that any preliminary contract under this Act for or relating to a lease shall not form part of the title or evidence of the title of any person to the lease.’ I agree with what was said by Lord Justice FitzGibbon during the argument, that the only effect of this sub-section is that where a lease has subsequently been duly executed in accordance with such a contract, the lease itself and not the contract is the commencement of the lessee’s title.
In all that I have read and in all that precedes in the Act, there is not a word to show any fetter or limitation on the power of the tenant for life to bind the inheritance by his contract; and if the Act had stopped there, there being nothing as yet about the appointment of trustees, I do not think there would have been any difficulty in the way of the defendant’s contention. But then come sections 32 to 37, all of which deal with the duties and powers of the trustees of the settlement, and section 38, which provides that if there should be no trustees within the definition of the Act, or where in any other case it is expedient for the purposes of the Act, the Court may, if it thinks fit, appoint them. What are the trustees to do? It is plain they are not to sell or make leases, for the power to do such things has been already conferred on the tenant for life. But by the six preceding sections the trustees are charged with the duty of safeguarding the property comprised in the settlement, and making some sort of provision for the protection of the rights of the persons to take in remainder. Their appointment is not a mere matter of form, but is a matter for the exercise of care. Consequently it was held in In re Kemp’s Settled Estates (24 Ch. Div. 485) (a case which I have frequently followed in the Rolls), where the Court refused to appoint as trustee under the Act the solicitor for the tenant for life, though he was in other respects a most proper person, being of opinion that his being solicitor to the tenant for life made him unsuitable for an office the duties of which might require him to check the proceedings of the tenant for life. The persons to be appointed trustees, therefore, ought to be independent, and when asked to appoint, the Court must exercise a judicial discretion in the matter. I quite agree that the duties of the trustees are now somewhat shadowy, having been gradually diminished by decisions and legislation till they have become very slender indeed.
The next few sections of the Act deal with payments to and the protection of the trustees, and then comes section 45……This section plainly applies to every case of a lease, both where the settlement has appointed its own trustees, and where it has not; and, moreover, in the event of there being none or only one in existence (unless the settlement expresses a contrary intention) it plainly contemplates an appointment being made, so that there may be at least two trustees on whom notice is to be served. In all cases, then, there must be service of the notice on the trustees: every case is covered, and it is not possible to evade the section. Now, what is the meaning of the words ‘or of a contract for the same’? The reference is to a contract for some of the things mentioned in the same section. No doubt, the case of a tenant for life making a contract for a lease is not specifically mentioned. Why? Because the section commences ‘a tenant for life when intending to make a lease,’ and as these words are large enough to include the case of a tenant for life making a contract for a lease (since if he does that, he intends to make a lease), there was no need to mention it specifically. I think the construction put upon these words by Mr. Houston and Mr. White is right. I think the sub-section means that one month before the lease or the contract, i.e. one month before one or other, the notice is to be served; but I also think that when there are no trustees, if the tenant for life die before the notice is served, the opportunity for serving it is lost, and the notice never can be served so as to comply with the section.
The third sub-section has been relied on as exempting an intending lessee from making inquiries; but it is admitted that it will not cover the case of a lessee who knows that there are no trustees. And the Act of 1884, which provides that the notice may be given in general terms, and that it may be waived by the trustees and still leave them free from responsibility, even that Act does not get rid of, and it is not contended that it does get rid of, any of the provisions in this section or of the need of serving the trustees with notice.
We have been referred to two cases which are said to be authorities in favour of the respondent and which the Exchequer Division thought to be binding on them and to coerce them into deciding as they have done. Those are The Duke of Marlborough v. Sartoris (32 Ch. Div. 616) and Hatten v. Russell (38 Ch. Div. 334). But in neither of those cases did the point here debated really arise. They were both cases between a tenant for life and a man who had purchased from him, and they decide nothing as to what is the vital point in this case – the need of the service of the notice in a case where there are no trustees of the settlement and the party dealing with the tenant for life knows there are no trustees. We have been referred to a passage in Clerke’s Settled Land Acts, p. 130, 2nd edition, where it is stated that ‘the giving of the notice is a matter between the tenant for life and the trustees, and one with which the purchaser is not concerned’; and it is contended here that a similar doctrine applies to the case of a lessee. The passage cited, no doubt, appears to be justified by the decision of Mr. Justice Chitty in The Duke of Marlborough v. Sartoris (32 Ch. Div. 616), referred to in support of it. What the learned Judge there (at page 623) says is this: ‘It seems to me, therefore, that the giving of the notice is a matter between the tenant for life and the trustees, and one with which the purchaser is not concerned. He could not expect to have the notice set out in his abstract. If he inquired whether the notice was given, I can see no reason why the vendor should not say: “That is a matter with which you are not concerned, for the Act says so in so many words.” But he goes on: ‘Of course the case is different where there are no trustees of the settlement, who are trustees within the Act for the purposes of the Act, in which case an order has to be made apponting trustees for the purposes of the Act.’ Therefore, so far as Mr. Justice Chitty’s opinion is concerned, it is rather in favour of the appellant. The case of Hatten v. Russell (38 Ch. Div. 331) is a decision by Mr. Justice Kay, who in his judgment expressly guarded himself from being supposed to decide the point now before us. He says (at p. 344): ‘As to the notice there is an express provision in section 45, which is the section that empowers the tenant for life to give notice – that “a person dealing in good faith with the tenant for life is not concerned to inquire respecting the giving any such notice as is required by this section”.lt is said that that does not absolve a purchaser who knows that no notice has been given, and that in that case he might be liable if he were to complete his purchase. With that point at present I have nothing to do, and I will not pause to give any opinion on it.’ Therefore, upon the question, whether it is necessary to give notice where there are no trustees, and that fact is within the knowledge of the lessee or purchaser, Mr. Justice Kay gave no opinion, and the opinion of Mr. Justice Chitty is favourable to the appellant.
There being nothing in these authorities to show that the section should not be construed strictly, it is plain in this case that if the lease had been executed it would have been wholly inoperative, unless the trustees had been appointed and the notice served; and the point which we have to decide is this – Is a person who has not got a lease, but only an agreement for one, to be in a better position by reason of that circumstance? I think the whole scope and object of the Act shows that it was intended that a contract for a lease was to have the same operation and effect as a lease binding the inheritance. But the Act leaves wholly untouched the case where no lease could have been made owing to common misfortune or common default. Without something in the statute to support it, the notion seems a novel one, that, in the absence of what admittedly would give validity to both, a title under an agreement for a lease should be stronger than a title under a lease itself. Besides, I am of opinion that to hold this would be equivalent to striking out of the 48th section the words ‘or of a contract for the same,’ and to declaring that the tenant for life, by a simple letter of agreement, could bind the inheritance without pursuing the course pointed out by the statute. It was, no doubt, the intention of the Legislature to enable a tenant for life to make a lease so as to bind those entitled in remainder, but the power which the Act gives him is only to be exercised under certain prescribed conditions, and we have no right to extend the provisions of the Act to a case where the prescribed conditions have not been fulfilled.
Mr. Houston has referred to the provisions of the 7th section of the Settled Land Act, 1890 (53 & 54 Viet. c. 69). It provides not in the case of all leases for twenty-one years made by a tenant for life, but in the case of such leases where the lessee is punishable for waste, that the notice prescribed by the 45th section of the Act of 1882 need not be served, and that the lease may be made notwithstanding that there are no trustees of the settlement for the purposes of the Settled Land Acts. The section says: ‘A lease for a term not exceeding twenty-one years at the best rent that can be reasonably obtained without fine, and whereby the lessee is not exempted from punishment for waste, may be made by a tenant for life – (a), without any notice of an intention to make the same having been given under section 45 of the Act of 1882; and (b), notwithstanding that there are no trustees of the settlement for the purposes of the Settled Land Acts, 1882 to 1890.’ ‘Whereby the lessee is not exempted from punishment for waste.’ What is involved in these words? Expressio unius est exclusio alterius. If in a particular case it is expressly provided that neither notice nor trustees are necessary for the making of a valid lease, the obvious inference is that in other cases not included in the section there must be trustees of the settlement for the purposes of the Acts, and that the prescribed notice must be served on them.
I am therefore of opinion that the defendant in this case did not obtain a contract for a lease sufficient under the Acts of Parliament to bind the remaindermen, and that he is not entitled to remain in possession as against them.
FitzGibbon L.J.:
The Settled Land Act, 1882, sect. 45, sub-sect. 2, provides that at the date of the notice directed by sub-sect. 1, there shall be two trustees at least. Sub-sect. 3 enacts that a person dealing in good faith with the tenant for life is not to be concerned to inquire respecting the giving of the notice, but this must mean dealing in the manner prescribed by the Act, and a person who knows that there are no trustees knows that he cannot deal under the Act. Here it is admitted that the defendant knew that he was dealing with a tenant for life, and knew that there were no trustees. It appears, when we look at the agreement, that the defendant was also fully aware of the limited character of the powers possessed by his lessor; for the lease originally agreed on was to have been made in consideration of a fine, and, on its being discovered that the intended letting would have been thereby invalidated, the fine was paid back, the lessor consented to pay costs, and he would have been more than human if, on entering into the new agreement, he had not been tempted to diminish his own personal liability rather than to increase the annual rent to the highest figure. It is plain, therefore, that it was with full knowledge of the difficul ties in the way of obtaining a valid lease that the defendant entered into this agreement.
Where there are trustees, a person dealing in good faith with the tenant for life
may fairly be exempted from any obligation to look after the interests of the persons entitled in remainder; for the settlement is in that case represented both by the tenant for life and by the trustees, and although these trustees may reduce their action to something perfunctory, if not altogether shadowy, without incurring any personal liability, their powers are not necessarily ineffective, for where they think it necessary, they can bring any matter before the Court and obtain its directions; and I fancy that any Court would have instituted rigorous inquiries before it sanctioned an agreement made under the circumstances disclosed upon the face of the consent here.
According to the defendant’s argument, the Act would give to an imperfect inchoate transaction more force and protection than to a completed lease. But I think the words of sect. 45, sub-sect. 1, explicitly require that either before the making of the lease, or before making the contract for it, one month’s notice shall be given to trustees of the settlement then existing. If the notice has been given before the contract, it need not be repeated before executing the lease, but if it has not been given before the contract, then it must be given before the completion of the lease, and until it has been given by a tenant for life still ‘intending to make’ the lease, those claiming under the settlement cannot be bound. I regard the argument as absurd which results in a construction by which a tenant for life needs only to bind himself by an agreement, and then to leave the lease uncompleted until his death, in order to bind the inheritance, without complying with the statutory
conditions, though it would not be bound if he had executed the lease agreed upon before he died.
Taking sections 31 and 45 together, and construing them in the light of a transaction like that between Harvey and Fanagan, their effect, in my opinion, is that from the time the contract is entered into it may be enforced against the tenant for life, but that in order to bind the inheritance it must be carried out in the prescribed manner and after the prescribed notice. Where the prescribed notice has not been given, and, through the want of trustees, or the death of the contractor, or for any other reason, cannot be given, the inheritance is not bound, and the purchaser or lessee is – as many other intending purchasers and lessees have been before – relegated to his personal remedies against the party with whom he con tracted, or his representatives.
Barry L.J.:
I concur. The only doubt on my mind is caused by the fact of the Lord Chief Baron having come to a different conclusion. At the same time, it is satisfactory to me to know that the learned Judge arrived at his decision only by attributing to two cases a binding significance which I cannot see that they bear. In one of those cases, The Duke of Marlborough v. Sartoris (32 Ch. Div. at p. 623), where he touches on the question before us, Mr. Justice Chitty has laid it down that if there are no trustees for the purposes of the Act, such trustees must be appointed before a sale under the Act can be effected. So that I cannot see that that case is an authority coercing us to decide in favour of the defendant. The other case also, in my opinion, leaves the question equally open for us to determine. For Hatten v. Russell (38 Ch. Div. 334) merely decided that the purchaser was bound to complete in a case where, though there were no trustees at the inception of the transaction, they had been subsequently appointed, and the notice served on them – the question under the circumstances being one of conveyancing and not of title. I do not think we are in any way trenching on those cases. If I thought we were I should have liked to have had an opportunity to consider our decision. But I believe we are not deciding anything inconsistent with those two cases.
It seems to me that section 45 of the Settled Land Act requires notice of a sale or lease being made by the tenant for life to be given to the trustees, in order that the latter may have an opportunity of safeguarding the interests of other persons under the settlement. It is quite true, as the Master of the Rolls has felicitously observed, that the functions of the trustees are very shadowy; but it is equally clear that the Legislature intended them to act as a check when the occasion should so require. Kemp’s Settled Estates (24 Ch. Div. 485) shows that the Court may question the fitness of a person of the most respectable character to act as such trustee by reason of his possibly not being quite independent of the tenant for life. That being so, we cannot regard the appointment of trustees for the purposes of the Act, or the service of the prescribed notice, as a merely formal matter, but as part of the machinery of the Act and part of the means whereby the inheritance is to be bound by the act of the tenant for life. I think the Act of Parliament gives the option to the tenant for life to serve the notice either before the making of the contract or the making of the lease. If after entering into the contract he allows the service of the notice to lie over, as was done here, and an act of God prevents the notice being given before the execution of the lease, the party dealing with the tenant for life must only take the consequences.
Mr. Houston suggests that the policy of the Legislature in passing this Act was a wide policy, and he says that we ought not to thwart it by requiring too strict an observance of the conditions imposed. All I can say is this: I can see no power enabling the tenant for life to do what it is contended that Harvey has done. The conditions he had to fulfil were all conditions precedent: he has failed to fulfil them, and having failed to fulfil them, his contract cannot bind the remainderman. As to the merits I know nothing and I can say nothing. If the defendant has a meritorious case it is a pity that we have to decide against him; but we are here to administer not to amend the law.
In the Matter of the Estate of Francis J. D. Reid
Land Commission.
6 June 1905
[1905] 39 I.L.T.R 236
Meredith J.
The question which I have to consider is not whether I have power to appoint trustees of the compound settlement but whether the trustees of the will can give a receipt for the purchase-money. I am clear from the decisions in the cases that have been referred to that the trustees of the will can give a valid discharge for the purchase-money in this case. I accordingly make the order applied for.
Re Lord Annaly’s Settled Estates
High Court of Justice.
Chancery Division.
10 February 1896
[1896] 30 I.L.T.R 45
Porter M.R.
Porter, M.R.
[I think I ought to make you bring the money into Court. What is proposed to be done with it?]
The money would be paid to the trustees to be applied in part satisfaction of the charge, which carries four and a-half per cent. interest. It would *45 be for the benefit of the estate that the charge should be reduced.
Porter, M.R.—I will make the order.
In the Matter of the Estate of Bruen
Land Commission.
6 December 1910
[1911] 45 I.L.T.R 38
Wylie J.
Wylie, J.
A rather curious question has been raised in this case affecting the right of the vendor to receive the bonus. The facts upon which the question arises, so far as they have been laid before me, are these:—By a settlement of Nov. 15, 1886, the lands sold in this matter were limited to the Rt. Hon. Henry Bruen, father of the vendor, for life, with remainder to the vendor for life, with remainder to the first and other sons of vendor in tail male, with remainders over. By a voluntary conveyance of the 30th November, 1897, the Rt. Hon. Henry Bruen conveyed his life estate to the vendor. On Nov. 23, 1907, the vendor, having entered into agreements with the tenants for the sale of the settled lands under the Land Purchase Acts, lodged an originating application with the Land Commission to carry out said sale, and on Aug. 4, 1910, the “estate” was declared by the Estates Commissioners, and the purchase-money lodged in bank. The Rt. Hon. Henry Bruen is still living, and counsel on his behalf contend that the power to sell the settled lands remained vested in him notwithstanding the conveyance of Nov. 30, 1897, and that the vendor had no power to sell during his father’s lifetime. This contention was based entirely on the provisions of s. 50 of the Settled Land Act, 1882. That section provides that the powers under this Act of a tenant-for-life are not capable of assignment or release, and do not pass to a person as being, by operation of law or otherwise, an assignee of a tenant-for-life, and remain exercisible by a tenant-for-life after and notwithstanding any assignment, by operation of law or *39 otherwise, of his estate or interest under the settlement, and that any contract by him not to exercise his powers is void. Now, the meaning of that section, I think, is very clear so far as it goes, and the many decisions upon it leave no doubt as to its meaning up to a certain point. And I think the effect of the section and of the decisions is this, that once a person is a tenant-for-life of settled land within the meaning of s. 2 (5) of the Settled Land Act, 1882, and having, as such, the powers conferred upon a tenant-for-life by said Act, he cannot, so long as he is such tenant-for-life, deprive himself of any of these powers by any assignment or release or contract not to exercise them, and, subject in certain cases to the consent of the assignee, they remain exercisible by him, notwithstanding any assignment by operation of law or otherwise of his estate, and do not pass to any person as his assignee. It is plain, therefore, that the power of sale which was vested in the Rt. Hon. Henry Bruen on the date of the conveyance of Nov. 30, 1897, did not pass to the vendor as his assignee. This, I think, disposes of one ground on which Mr. FitzGibbon relied in support of his contention that the vendor had a power of sale—viz., the provisions of s. 58 (1) (v.), which gives the powers of a tenant-for-life to a tenant in possession for the life of another, because, if the vendor in this case was in possession of the lands as tenant for the life of his father, it must have been as assignee of his father’s life estate. But then Mr. FitzGibbon’s other ground of contention is, that vendor, at the time of sale, was in possession, not as assignee of his father’s life estate, but by virtue of his own estate as next tenant-for-life, either under the Settlement of 1886, or under a compound settlement consisting of that settlement and the conveyance of 1897. His contention is that the conveyance of 1897, having vested in the vendor the life estate of his father, and the vendor being next tenant-for-life in remainder after the father’s life estate, and there being, as was admitted, no intermediate estate to prevent merger, the effect of the conveyance in conjunction with the settlement was to merge the father’s life estate in the life estate of the vendor, with the result of extinguishing the life estate of the father and accelerating the life estate of the vendor. This contention, it seems to me, is clearly right in point of law, and, therefore, when the vendor, after the conveyance of 1897, entered into and continued in possession and receipt of the rents and profits of the settled lands, it must have been as tenant for his own life of those lands, either under the settlement of 1886 or the compound settlement consisting of that settlement and the conveyance of 1897. This being so, had the veudor as such tenant-for-life a power of sale under the Settled Land Acts? Mr. Wilson, on behalf both of the Rt. Hon. Henry Bruen and the trustees of the settlement of 1886, says “No;” and contends that the power to sell the settled lands conferred by the Settled Land Acts cannot be vested in two different persons at the same time; that once a person has become tenant-for-life of the settled lands within the meaning of s. 2 (5) of the Settled Land Act, 1882, the Act confers upon him a power of sale, which nothing that may happen can deprive him of, and which must remain in and be exercisible by him during his life, and, this being so, that a power of sale cannot during his life be vested in any other person. Now, the provisions of the Settled Land Act, 1882, bearing upon this question are ss. 2 (5), 3, 50, and 51. Section 2 (5) defines the person in whom as tenant-for-life the powers conferred by the Act are vested. Section 3 confers on the tenant-for-life the power of sale. Section 51 makes void any provision in any instrument tending or intended to prevent the tenant-for-life from exercising or to induce him not to exercise his powers under the Act. Then s. 50, as we have seen, in effect prevents a tenant-for-life— i.e., as defined—from depriving himself of these powers or passing them to any one else. Now, in order to see the meaning and effect of s. 50, it is necessary to bear in mind the definition of “tenant-for-life.” I could understand the argument of Mr. Wilson as to the effect of this section, if the Act had conferred the powers given to a tenant-for-life upon the person who was the first tenant-for-life under a settlement. But, referring to the definition in s. 2 (5), the powers are conferred on the person who is for the time being, under a settlement, beneficially entitled to possession of settled land for his life. That is the person to whom s. 50 applies, whether he happens to be the first, second, or third tenant-for-life. Now, in the events that have happened, who was the person, at the date of the sale in this case, for the time being, under the settlement, beneficially entitled to the possession of the settled lands for his life? Was it the vendor or his father? It seems to me clear, for the reasons already given, that, upon the execution of the conveyance of 1897 the vendor, either under the settlement of 1886 alone or under the compound settlement, constituted by it and the said conveyance, under which the settled land then stood limited, became beneficially entitled to the possession of the settled land, and, accordingly, the tenant-for-life in whom the powers under the Act became vested, and thenceforth the provisions of s. 50 applied to the vendor and not to the father. This, I think, will be seen to be in accordance with the other provisions of the Act, and with *40 decided cases. By s. 58 (1) (vi) the powers of a tenant-for-life under the Act were conferred upon “a tenant for his own life whose estate is liable to cease in any event during his life, whether by expiration of the estate or by conditional limitation or otherwise.” Now, until the event happens which determines his estate, such a tenant-for-life has a power of sale under the Act, and s. 50 applies to him. But if the event happens before the power of sale is exercised, and some one else, therefore, under the settlement becomes entitled beneficially to the possession of the settled land, could it be successfully contended that the tenant-for-life whose estate had determined could still exercise a power of sale by reason of the provisions of s. 50? I think not; and it seems to me I am supported in this by In re Levy’s Trusts, 30 Ch. D. 119; In re Haynes, 37 Ch. D. 306; and In re Trenchard, [1902] 1 Ch. 378. Now, if this be so, does the fact that the father’s estate was in this case determined by merger through an act of his own make any difference? In giving judgment in In re Mundy & Roper’s Contract, [1899] 1 Ch., at p. 296, Chitty, L.J., after referring to this power of sale and the effect of s. 50, says—“It may be that if the settlement consists merely of a life estate in A., with remainder to B. in fee, and A. surrenders his estate to B., the power is gone under the doctrine of merger; and that such a case is not within the section, because, where the settlement is thus brought to an end and exhausted, there is no reason why such a power should continue after the absolute fee-simple is vested in possession. I say ‘may be,’ because it is not necessary to consider such a case, which does not arise upon the facts before us.” And Swinfen-Eady, J., in In re Barlow’s Contract, [1903] 1 Ch., at p. 384, referring to the above observations of Lord Justice Chitty, says—“But those observations which are prefaced by the words, ‘it may be,’ are directed to a case where an entire life estate has merged, so that the fee-simple is vested in possession, and are based on the assumption that in such a case there is no reason why the powers should continue. In the present case, where at most only a portion of the life estate is gone, and the life tenant is still beneficially entitled to the remaining portion, and where it may be to the interest of all parties that she should be able to exercise her powers, I am of opinion that her powers still continue as to the entirety.” Now, I cannot, of course, treat those cases as decisions on the point, but it seems to me that, having regard to the object and purpose of the Settled Land Acts, this is a stronger case than the one referred to in those judgments, because by the merger here of the first life estate the second life estate is accelerated and brought into possession, and thereupon the person entitled thereto becomes the tenant-for-life under the settlement of the settled lands with all the powers conferred by the Acts upon a tenant-for-life, and, therefore, there is not only no reason why the powers of the first tenant-for-life should continue, but there is every reason why they should not, because the person who is for the time being entitled to the possession of the settled land is the person who was intended to have, and should have, the power of sale. On the whole case, therefore, I am of opinion that the vendor had power to sell, and having sold, is entitled to the bonus. It is not necessary for me to decide whether the power of sale formerly vested in the vendor’s father continued exercisible by him, as he has not sold under it.
In the Matter of the Donoughmore Settlement
in the Matter of the Settled Land Acts, 1882 to 1890
High Court of Justice.
Chancery Division.
14 May 1912
[1913] 47 I.L.T.R 268
Ross J.
Ross, J.
There are a few small things that are doubtful, but one must look at these things in a large way and not be meticulous. In the whole expenditure I can find nothing that I can lay my hand on as purely ornamental. I approve of the whole scheme. It comes within the extending clause.
The curial part of the order was as follows:—“That the several works already executed upon the premises known respectively as Knocklofty Mansion and Kilmanahan Castle (being part of the lands and premises subject to the trusts of the above-mentioned settlement) and mentioned in the two schemes already approved by the applicants as trustees of said settlement, and described more particularly in said summons and schedules thereto, exclusive of said electric lighting system in said schedules mentioned, are improvements within the meaning of the Settled Land Acts, 1882 to 1890, as extended by the provisions of the above-mentioned settlement, that the said sums of £10,668 14s. already paid in carrying out the said works at Knocklofty Mansion and the sum of £1,436 16s. 2d. already paid in carrying out the said works at Kilmanahan Castle were properly payable out of capital moneys, subject to the trusts of said settlement, and arising under the provisions of said Acts, and that the applicants, as trustees of the said settlement, were justified and authorised by the provisions of the said Acts and settlement in applying the sum of £10,866 0s. 7d. out of capital moneys in their hands, so arising as aforesaid in payment to that extent on foot of the said sums of £10,668 14s. and £1,436 16s. 2d., notwithstanding that a scheme or schemes for the aforesaid works was not submitted for the approval and sanction of the Court before the execution of said works; that the applicants, as such trustees aforesaid, were at liberty to apply out of capital moneys arising under the said Acts in their hands, or to come to their hands and subject to the trusts of the said settlement the sum of £1,239 9s. 7d. in repaying to the said Michael Paul Grace, one of the applicants, the sum of £1,239 9s. 7d., lent by him to the applicants for the purpose of completing said works, and applied by them for said purpose, and that the costs of all parties appearing be taxed as between solicitor and client, and that same when so taxed be paid by the applicants out of the property subject to the trusts of the said settlement.”
In the Matter of the Estate of Hugh Locke, a Minor
in the Matter of the Conveyancing and Law of Property Act, 1881
in the Matter of the Settled Land Acts
High Court of Justice.
Chancery Division.
3 May 1913
[1913] 47 I.L.T.R 147
[What powers do the trustees wish to exercise?]
Accepting surrenders, making lettings, giving receipts, and generally to deal with the property in the ordinary and proper course of management as a land agent; the last phrase, s. 42 (2), “and generally to deal with the land in a proper and due course of management,” is wide enough to cover all these matters.
[The Master of the Rolls.—It would not include a power of letting.]
I then ask to amend the title of the summons by adding “and in the matter of the Settled Land Acts,” and attaching the jurisdiction under s. 60 of the Settled Land Act, 1882, giving powers of leasing under s. 31 (iii): In re Cowley, [1901] 1 Ch. 38.
The Master of the Rolls.—I will grant liberty to amend the title accordingly, and appoint the proposed trustees to exercise the powers of an infant tenant-for-life, in respect of letting only, in addition to the powers of management under s. 42 of the Conveyancing and Law of Property Act, 1881, and order the costs to be paid out of the accruing rents of the property.
In re Estate of Keating
23 July 1888
[1888] 22 I.L.T.R 67
Mr Commissioner Lynch
Mr. Commissioner Lynch
Our jurisdiction as to the appointment of trustees for the purpose of the Settled Land Act, arises under section 13 of the Land Puchase Act of 1885, as extended by the 23rd section of the Land Law (Ireland) Act, 1887.
In this case Nicholas Keating devised all his property, real and personal, to four trustees (of whom Ellen Keating was one) upon trust after payment of dividends, debts, and legacies, to apply the rents and interest, of the real and personal property for the maintenance of his wife, and the maintenance and education of his three children until they should become entitled to their shares under the provisions of the will; and as to the lands of Turkyle, the subject matter of the present application, he directed the trustees to hold the same in trust for his son, Nicholas Andrew, if he should live to attain age, and in the event (which happened) of his death under age, in trust for testator’s second son, James John, if he should attain age, and in the event of his death in trust for his daughter, Mary, on attaining age or marrying with an executory devise over in favour of testator’s wife, Ellen Keating, the present applicant.
Nicholas having died, James John, who is a minor, will, if he attains age, be entitled to the lands in fee-simple. It appears from Mrs. Keating’s affidavit that she is now in receipt of the rents of these lands, and that she applies the same to the maintenance of herself and her children. In January last she, describing herself as owner of the lands, entered into agreements for sale with the tenants under the Purchase of Land Act, and now applies to have trustees appointed to carry out such sales. Having considered this case I am of opinion that Ellen Keating is not “a person beneficially entitled to the possession of the lands for her life,” within the definition of the 2nd section of the Settled Land Act, neither is James John Keating, under the terms of the will, a tenant for life in possession, nor can I regard Ellen Keating, James John, and Ellen Mary Keating, as together constituting the tenant for life for the purposes of the Act (section 2, sub-s. (6). The decision In re Atkinson ; Atkinson v. Bruce, 30 Ch. Div. 605 (affirmed in the Court of Appeal) appears to bear directly on this point. I have also considered the case, having regard to the decision of North, J., In re Morgan, 24 Ch. Div. 114. In that case certain estates were devised to trustees on trust to pay the income to the testator’s wife for the maintenance of the testator’s son till he should attain 21 and then in trust for him absolutely, but if he should die under 21 on trust to pay the testator’s wife the income for her life and after her death in further trusts as therein. It was held that the infant son had the powers of a tenant for life, being tenant in fee-simple in receipt of the income with an executory limitation over. In the present case, however, the will provides that until John James and Ellen Mary become entitled to their shares of the testator’s estate (of which Turkyle only forms a part), that the rents, dividends, and interest of all the real and personal estate are to be applied for the maintenance of the wife and the maintenance and education of the children.
Mr. Swifte, while admitting that this case cannot, like Morgan’s case, be brought under sub-section 2 of section 58, contends that it comes within sub-section (6) of that section, and that James John Keating, Ellen Mary Keating, and Mrs. Keating are “tenants for years determinable on life,” whose estate is liable to cease in any event during that life. I cannot yield to this contention—a tenancy for years determinable on life means a tenancy, say for sixty years, provided A. B. so long lives; *67 and whatever present rights these persons have to the income of this estate, they are determined not upon a life, but upon James John Keating attaining age, or if he die under age on Ellen Mary Keating attaining age—the term here is not a term of years determinable on a life—and we have no persons here who can claim the exclusive possession or receipt of the rents of these lands for their lives and I must therefore adhere to my first opinion.
Our desire here is to facilitate sales to tenants as far as we can, and in the cases of limited owners to throw no technical obstacles in the way of such sales. The points in support of this motion were most ingeniously made, and I am sorry that my decision will prevent the sale of this estate, but I cannot put a construction on the Act which the facts laid before me do not warrant.
O’Farrell v Stapleton
[1959] I.R.387
In the Matter of the Settlement created by the Will dated the 1st day of September 1943 and two codicils thereto dated respectively the 15th day of December 1945 and the 31st day of May 1946 of CHARLES O’FARRELL Deceased and In the Matter of the Settled Land Acts 1882 to 1890
DESMOND RICHARD O’FARRELL Plaintiff v. CECIL GEORGE STAPLETON, GEORGE CRAMER STAPLETON and RICHARD CHARLES PASCAL O’FARRELL Defendants.
Dixon J. 389
I think I should not allow the proposed expenditure under s. 25 of the Settled Land Act, 1882, as only a very small part of it, if indeed any of it, would appear to be an improvement under that section. The expenditure on the garage was sought to be included under clause (xi) of that section which refers to “Farmhouses, offices, and outbuildings, and other buildings for farm purposes”; but a garage in a suburban domestic residence is clearly not a building for farm purposes.
The second item of proposed expenditurethat on the plumbing and central heatingis sought to be included under clause (xiii) of the section, which deals with “works and machinery for supply and distribution of water for agricultural, manufacturing, or other purposes, for domestic or other consumption.” The extension in the latter part of that clause might be thought sufficiently wide to include the items here proposed. In de Vere v. Perceval and Cole (1)Mr. Justice Gavan Duffy permitted expenditure on central heating, but in that case the expenditure was contemplated in order to enable the house to be let, and the authority to spend the money was sought, and granted, under s. 13 (ii) of the Settled Land Act, 1890, which applies to improvements or alterations made to enable the premises to be let. Consequently, I think that case cannot be applied in the present circumstances, where the expenditure is intended to enable the tenant for life and his family to occupy the premises. In the result, therefore, if this application rested solely on the specific provisions for improvements under s. 25 of the Act of 1882, only the expenditure proposed on the plumbing could be permitted.
But permission for the proposed expenditure is also sought by virtue of s. 21 (vii) of the Act of 1882, which permits the investment of capital moneys in freeholds, or leaseholds held for sixty or more unexpired years. That section has been applied in In re Blake’s Settled Estates (2) by Romer J. as including cases in which alterations, improvements or renovations have been necessary or desirable in the purchased house or premises where the trustees would have had to pay a higher purchase price for the premises had the vendor carried out those works before the sale. I think the same principle applies here. The premises were bought for £3,000 and works are proposed to be carried out to bring them up to modern standards. They are all necessary to bring the premises into modern condition. They all have the result of adding to the value of the premises. The result, therefore, is, that instead of the tenant for life buying a property for a certain price with a condition that the vendor should spend a sum on improvements, he bought it in an unimproved condition at a lower price. If he had bought the premises in the condition into which he proposes to put them, he would have had to pay £5,000. The only item which causes me doubt is the amount of £420 for the built-in wardrobes. Mr. de Courcy, the valuer, was doubtful if they would add the full amount of their cost to the value of the house. He is perhaps right in that, but at the same time he regarded them as an improvement which would add to the saleability of the premises. He could not put a figure on it, but he thought it would be something. But taking into account his clear opinion of the increased saleability, and adding the other proposed items, they might all together add more to the value of the house than the cost of the individual items. To disallow the item would be mere speculation.
Accordingly, the whole of the proposed expenditure may be authorised by the trustees to be expended as part of the purchase money, but not to exceed £2,000, and subject to safeguards for the annuity of £200 per annum to Henry O’Farrell. The moneys representing the sale of Dalystown will be insufficient to meet the annuity in full, but Mr. Matheson’s proposal that the deficiency be charged on the residuary estate which is settled on trusts as would most nearly correspond with those of the mansion house and demesne, is satisfying. The tenant for life must take out a policy to cover the contingency of his dying before the annuitant. Subject to those conditions I authorise the proposed expenditure.
Gormanston v. Gormanston and Others
[1923] IR 138
By the will of the late Viscount Gormanston, dated 14th February, 1907, he appointed his wife Georgina Viscountess Gormanston and Major Gerald Dease his trustees, and he bequeathed to them, inter alia, all his family jewels upon trust to permit the said Georgina Viscountess Gormanston to have the possession and use thereof during her life, and subject thereto to permit the same to devolve and be enjoyed as heirlooms with his real estate, but so that the same should not vest in any person becoming tenant in tail male or in tail unless he should attain the age of twenty-one years, but on his death under that age should devolve as if they had formed part of the said estate; and the testator by his said will made the present Viscount Gormanston his residuary devisee and legatee.
The late Viscount Gormanston, the testator, died on the 29th October, 1907, and probate of his will was granted on the 27th November, 1907, to the said Georgina Viscountess Gormanston and Gerald Dease.
The present Viscount Gormanston is married and has four children, viz., the Hon. Jenico William Richard Preston, the Hon. Robert Francis Hubert Preston, the Hon. Stephen Edward Thomas Preston, and the Hon. Eileen Antoinette Mary Preston, who are infants. Georgina Viscountess Gormanston has relinquished her life estate in the jewels.
Oliver Murphy , for the plaintiff:
The bequest in the will deals only with personalty, and must be construed as so applying, and the possible limitations of the property to persons possibly taking by descent must be extended; and as limitation of personalty can only be by purchase, and not by descent, the restricting clause must be confined to those who take by purchase. Therefore the restriction does not violate the rule against perpetuities, as the persons who take by purchase must come into being in the lifetime of the present Lord Gormanston: Martella v. Holloway (1); Christie v. Gosling (2).
Phelps , for the defendants.
His Honor the Master of the Rolls, having stated the facts hereinbefore set out, proceeded:
It is now desirable for family reasons to sell the jewels, and the present Viscount Gormanston claims to be the absolute owner thereof as the testator’s residuary legatee, his contention being that the bequest of the jewels as heirlooms, to be enjoyed with the settled lands in the manner prescribed by the will, is invalid, and that the bequest thereof failed and the jewels passed to him as residuary legatee.
Lord Gormanston is plaintiff in the summons; Georgina Viscountess Gormanston and Gerald Dease, as executors of the will, are defendants. The Hon. Jenico William Richard Preston, as the eldest son of Lord Gormanston and first tenant in tail of the lands under the settlement, is also a defendant; and I have named him to represent the class of tenants in tail. The brothers of the present Lord Gormanston, viz., Richard and Hubert, are also defendants, together with Gerald Dease and Wm. O’Reilly, the trustees of the settlement, so that all parties interested are thus represented.
I may say in the first place, before approaching the question at issue, that although the testator spoke of the real estates as his real estate, they were not, strictly speaking, his own, as all the lands were in settlement, and he was only tenant for life thereof. But it is certain that when he referred to his real estates he meant the lands subject to the settlement I have mentioned.
Now, the point which Lord Gormanston makes is this: He says that the bequest of the jewels to devolve and be enjoyed as heirlooms with his real estates, but so that the same shall not vest in any person becoming tenant in tail male or in tail unless he shall attain the age of twenty-one years, but on his death under that age shall devolve as if they had formed part of the said estates, is invalid, because it offends against the rule against perpetuities, and has therefore failed. This depends on the meaning to be put on “tenant in tail male or in tail.” If it means tenant in tail by purchase, the bequest would be valid; but if tenant in tail male or in tail includes all tenants in tail, whether by purchase or by descent, the bequest is invalid, because that would or might have the effect of tying up the property for a longer time than is allowed by the rule against perpetuities. For instance, any one of Lord Gormanston’s sons might die under the age of twenty-one years leaving male issue, in which case the jewels would not vest absolutely until some one of such unborn male issue attained twenty-one years of age.
If the trust declared by the will had stopped at the words to “devolve and to be enjoyed as heirlooms with my real estates,”possibly no objection could be taken, because the first person becoming tenant in tailnecessarily a tenant in tail by purchase would become absolute owner of the jewels; but by the superadded words, “but so that the same shall not vest in any person becoming tenant in tail unless he shall attain the age of twenty-one years, but on his death under that age shall devolve as if they had formed part of the said estates,” all tenants in tail, whether by purchase or descent, are shown to have been meant by the testator. “Tenant in tail by purchase” is not meant. “Any person becoming tenant in tail” includes all tenants in tail, so that the testator intended to postpone the vesting of the jewels until some tenant in tail, no matter how remote, attained the age of twenty-one years. Such is Lord Gormanston’s contention.
I confess that, altogether apart from authority, I see no answer to this. Let me now see how the authorities stand. In Christie v. Gosling (1) lands were settled by will on the testator’s nephew for life, with remainder to his first and other sons in tail, and he bequeathed his personal property on the same trusts as were directed concerning his real estate, or as near thereto as the rules of law and equity would permit, with a proviso that the personal estate should not vest absolutely in any tenant in tail unless such person should attain twenty-one. It is to be observed that this settlement of the personal estate is not in the same terms as those in the case before me. In Christie v. Gosling (1)there was no gift over in the event of the tenant in tail dying under twenty-one years, while in the present case there is. This, I think, is a material difference. The question in Christie v.Gosling (1) was whether tenant in tail should be construed as tenant in tail by purchase only. It was held by Lord Chelmsford and Lord Cranworth (Lord St. Leonards dissenting) that it was to be so construed. The reasoning was this: that the limitation of the personal estate to the nephew for life, with remainder to his first son in tail, gave the son, who was a tenant in tail by purchase, the whole estate in the personal property, subject to the proviso that he should attain twenty-one, and that the proviso should be read as a mere qualification of the preceding gift, and not as a description of the person who should take the personalty. If the proviso were to be read as a description, that would let in a class embracing any tenant in tail who would attain twenty-one, and so make the limitation void, as contrary to the rule against perpetuities.
I have pointed out that there is no gift over in Christie v.Gosling (1), while there is a gift over in the present case. On the death of any tenant in tail the jewels are to devolve as if they had formed part of the real estatethat is, they are to pass to the next tenant in tail who would take the real estate, and who might be a tenant in tail by descent and not by purchase. For instance, the eldest son of Lord Gormanston is the first tenant in tail, and he is tenant in tail by purchase. But he may marry, have issue male, and die in his father’s lifetime before he attains twenty-one years; and in like manner such issue male may marry, have issue male, and die before he attains twenty-one years. Each of these tenants in tail on attaining twenty-one years would take under the terms of the gift over if it were possible in law. This gift over shows that the tenant in tail to whom the jewels were absolutely given by the will was not necessarily a tenant in tail by purchase. I cannot read the proviso that the jewels are not to vest unless the tenant in tail attains twenty-one, coupled with the limitation over to tenants in tail in succession, as a mere qualification of the gift to the first tenant in tail, as was done in Christie v. Gosling (1). I am forced to read it as description of the tenant in tail who was intended to take the jewels absolutely, and the description includes the whole class of tenants in tail on whom the lands were settled. This involves a settlement of the jewels in such a way as makes it void under the rule against perpetuities.
I wish further to point to a distinction between Christie v.Gosling (1) and the present case. In the former the real estate was settled by the same instrument as that which disposed of the personal estate, and I think that that circumstance aided the construction by which “tenant in tail” was given the meaning of tenant in tail by purchase. But here we have a settlement by will of heirlooms on the same persons as those on whom lands were settled by a previous settlement, under which tenants in tail both by purchase and descent were entitled to take. That distinction was pointed out by Lord Hatherley in Harrington v.Harrington (2). At p. 98 he calls attention to the circumstance that in Christie v. Gosling (1) the lands were settled by the will which disposed of the chattels, and then he goes on to say: “But this willin Harrington v. Harrington (2)which refers, not to anything contained in the will itself, but to an old settlement of a long anterior date (more than twenty years before the will itself), and to the limitations which might be created by that settlement, and which speaks of giving chattels, not to those persons who took simply as tenants in tail by purchase, but to persons who for the time being should be persons taking by descent through the operations of the estates tail given to persons under the settlement, is a will of a very different character from the will in Christie v. Gosling (1), and therefore that case has no application to the present case.”
I think that these observations strongly support the view I have taken, that Christie v. Gosling (1) does not govern the case with which I am now dealing.
In my opinion the specific bequest of the jewels failed, and they passed to Lord Gormanston as residuary legatee under the will. I shall so declare.
Annesley v Annesley
12 March 1918
[1918] 52 I.L.T.R 189
Wylie J.
The plaintiff in this action is in possession of the Annesley estates as tenant-for-life without impeachment of waste under a settlement of April 3, 1906, and claims a declaration that as such tenant she is entitled to fell and dispose of all timber and other trees on said estates other than such timber and other trees as were at the date of the settlement left standing for the purpose of ornament or shelter to the mansion house and the pleasure grounds attached thereto, or of ornament to any of the views or prospects thereof, and in particular the timber and other trees in certain woods mentioned in the claim. She also claims a declaration of right as regards ornamental timber, but this part of the claim has for the present been abandoned. The defendants in the action are the infant son of the plaintiff, who is tenant in tail in remainder, and Lady Clare Annesley and Lady Constance Malleson, who may become entitled to the estates with remainders over. The infant defendant by his defence simply submits his rights to the Court. Lady Clare Annesley has put in no defence. Lady Constance Malleson, by her defence, admits all the material facts stated in the statement of claim, and further admits that the plaintiff is entitled to sell and dispose of the timber and trees ripe for cutting upon the said estates other than such timber and other trees as were planted or left standing for the purpose of ornament or shelter, and submits that an inquiry should be directed to ascertain what woods, timber and trees were planted or left standing for the purpose of ornament or shelter. The same submission was made by counsel on behalf of Lady Constance Malleson at the close of plaintiff’s case, and an inquiry was strongly pressed for. After full consideration it seems to me, having regard to the nature of this question and to the fact that plaintiff has confined the action to the particular words mentioned in the first paragraph of the claim, that the defendants would be unable to add to or improve their case by further inquiry. The delay caused by such an inquiry would undoubtedly involve the plaintiff in great loss, and all the parties would incur much useless expense. I have, therefore, come to the conclusion that I ought not to direct an inquiry, but decide the question myself at once. Now, the question is in reality a question of fact. I do not think in the view I take, any question of law is involved in it. Stated generally the question is—whether the timber and other trees in the woods near Newcastle and in the woods near Castlewellan, or any of them, were planted or left standing for the purpose of ornament or shelter? Now, I have said this is a peculiar question. It is also very difficult, and the peculiarity and difficulty a rise from the fact that it is not a question of whether these woods are at present ornamental, either according to the view of the Court or the parties or their witnesses. They might be very unsightly,and yet in the view of the law be held to have been planted or left standing for the purpose of ornament by some eccentric owner, it there was sufficient evidence of the fact. The question is—were they planted or left standing for the purpose of ornament? Whose purpose? Why, the purpose of the man who planted them or left them standing, having power to cut them down. Therefore the answer to the question involves the ascertainment of the purpose or intention of a dead man in planting or leaving standing certain plantations when he has left behind him no direct evidence whatsoever of his purpose or intention. Some were planted for ornament or shelter only, others for profit only, and some for both purposes; but almost all woods, for whatever purpose planted, are ornamental. How then are we to decide, in the absence of all evidence, of the purpose or intention of the planter, what his purpose or intention was in respect of any particular wood? I think we can only infer it from the character and position of the wood and the general conduct and acts of the planter in relation to the woods on his estate. If a man plants a wood which is in fact ornamental, and when the trees are ripe and fit for cutting, has them all felled and sold for timber, you would hardly infer that he planted it for ornament. If he died when they were only half cut down, you would also hardly infer that he left the other half standing for ornament. If a man has many woods on his estate, planted and reaching maturity at different times, and from time to time as they severally come to maturity he has the best and ripest of the trees in some of them cut and sold, I think you should infer that those woods in which the trees were cut were not planted for ornament. But how are we to arrive at his purpose in planting as regards those woods in which little or no cutting took place before he died and left them standing? I think we can only arrive at it by comparing these woods with the other woods, in regard to which his acts have shown his purpose, and by looking at the situation and extent of these woods themselves, the class of trees planted, and the acts of the owner generally in relation to timber on the estate. My observations so far have been general, but they have been suggested by the facts proved and evidence given in the case. In dealing with the case specially, there is one fact proved that it is important to bear in *190 mind, that there is and always has been a nursery on the estate at Castlewellan in which there has always been a large stock of young trees for use in replanting, there being at present, I think one of the witnesses said, about 250,000. This fact coupled with the evidence of cutting and replanting by former owners of the estate throws, I think, considerable light upon the purpose or intention of such owners in planting the several woods. As regards the woods mentioned in the claim which are near Castlewellan and outside the demesne, I am fully satisfied upon the evidence given as to these woods, that the only inference I can draw from it is that these woods were not planted or left standing for the purpose of ornament or shelter within the meaning of the rule of law which prevents a tenant-for-life without impeachment of waste from cutting them down. As regards the two woods at Newcastle, the question is more difficult, because little evidence has been given of any timber or trees having been felled or disposed of in either of these woods up to the present time. These two woods are contiguous, forming one continuous plantation along the base of Slieve Donard Mountain, above and behind the town of Newcastle and Donard Lodge, both of which form part of the Annesley estate. The woods are about five miles from the mansion house and demesne at Castlewellan and cover over 300 acres. They are just visible from the mansion house and demesne on a clear day. Now, Mr. FitzGibbon, on behalf of the plaintiff, contended that these two facts—the distance from the mansion house and the extent of the woods—were sufficient in law to exclude these woods from the old rule of equity as to ornamental timber, and referred to one or two authorities. From the view I take I have not thought it necessary to consider and decide the question as one of law, but I may say, as at present advised, that if it were clearly proved by direct evidence, such, for example, as a recital in the settlement, that these woods had been planted or left standing for ornament and shelter to that part of the estate in and about Newcastle and Donard Lodge, I would feel great difficulty in deciding that either the distance from the mansion house or the size of the woods was sufficient to exclude them from the rule as to ornamental timber. But in the absence of direct evidence, these two facts are material to consider when you are endeavouring to ascertain whether these woods were planted or left standing for the purpose of ornament or shelter by a former owner who had power to dispose of them. Now, what is the evidence as to these two woods? As first stated, they cover over 300 acres and are five miles from the mansion house and only visible on a clear day. Most of the trees are Scotch or larch fir—the class of trees usually planted for commercial profit. They have all now reached maturity, and are ripe for cutting, some of them over-ripe. They will deteriorate every year they are left standing, and will be blown down by wind storms. According to the best course of forestry they should all be cut down and the ground replanted. There exists in the estate nursery about 250,000 young trees intended for use in replanting. The plaintiff intends to replant as the old ones are cut. As she put it herself, the replanting following the axe, and in the course of 10 or 12 years, probably well within her own lifetime, the young plantation will be more ornamental than the old. The trees are of great value if sold now, there being a contract for sale for £16,000, most of which may be lost if the plaintiff is not entitled to cut. She has excluded from the contract 30 or 40 acres surrounding Donard Lodge, which form the ornamental grounds of the lodge. It appears to me, therefore, that the plaintiff in taking the course proposed could hardly be said to be making an unconscientious use of her powers. The circumstances I have referred to, however, would not justify the plaintiff in cutting as proposed, if, as a fact, the trees were planted or left standing for the purpose of ornament, but I think they are proper to be considered in conjunction with the other evidence in the case. As regards the woods generally, when endeavouring to decide whether, as a fact, the trees in the Newcastle woods were so planted or left standing, if the settlor intended that these immense woods, covering three or four hundred acres of this estate at the date of the settlement, should be preserved as ornamental timber, he might have easily so provided by the settlement, but instead of that every tenant-for-life under the settlement is unimpeachable for waste. This is a circumstance which should not be overlooked. Counsel for the defendant based his case entirely on the fact that these woods are an ornament to Newcastle, Donard Lodge and the surrounding district. There can be no doubt that they are ornamental in the sense that all well planted woods are ornamental, but that is not the question I have to decide, and, having given the most careful consideration I can to the entire case, I am unable to arrive at the conclusion as against the tenant-for-life, who is unimpeachable for waste, that these woods at Newcastle were planted or left standing for the purpose of ornament or shelter within the meaning of the rule of law which prevents such a tenant from cutting the timber. The burden of proof in such a case is on the *191 defendants, and, I think, they have wholly failed to discharge it. I declare the plaintiff entitled to fell and dispose of the timber and other trees in the woods mentioned, and to retain the proceeds for her own use. There will be liberty to apply to the Court in reference to possible disputes as to the cutting of particular trees. As my judgment is in relief of the plaintiff, she must pay the costs of the parties.
In Re William Lenox Naper
Naper v Kirkpatrick
High Court.
27 February 1952
[1952] 86 I.L.T.R 106
Dixon J.
This application is on a matter of judicial discretion. In exercising my discretion in this case, I must note that the tenant for life has to all intents and purposes been in possession of Loughcrew since the date when the provisions of the will of William Lenox Naper came into effect. She has not been in possession of the actual rents derived from the property in Oldcastle, which consists of a large amount of small town property.
The general principles to be followed by a Court in the exercise of its discretion in cases like this is laid down by Chitty, J., in In re Bagot’s Settlement, Bagot v. Kittoe [1894] 1 Ch. 177 at page 182: “Now, the application is addressed to the judicial discretion of the Court, and this discretion is to be exercised on reasonable grounds, the Court looking to the convenience of the parties; to the question of expense, which falls, of course, on the tenant for life; and to other circumstances of a like kind. It is clear that Mrs. Bagot has no right to claim to be let into possession; and she can only claim to be let into possession through the exercise of the judicial discretion.” I think that applies largely in the present case, if it were not for the trusts for sale contained in the codicil. The plaintiff is in the position of a tenant for life, and is entitled to manage the property for her own benefit so far as the income therefrom is concerned, subject always to some supervision and checking in the interest of the persons entitled in remainder.
Loughcrew is not costing the plaintiff anything by way of agent’s commission, in respect of its management. There would, however, be room and opportunity for her to make a better income from Loughcrew and to effect economies in its management if she were not merely actually, but legally, in possession. If there were nothing more, it would be reasonable that the plaintiff should be let into possession of Loughcrew.
I have also no doubt concerning the property in the town of Oldcastle; it consists of a large amount of comparatively small urban properties, cottages and small dwellings. The question of the collection of rents arises here, together with the liability to repair these dwellinghouses, which may, in the majority of cases, rest on the landlord, together with the responsibility for the general upkeep and maintenance of the properties. These liabiliities do not, to my mind, furnish a sound reason for depriving the tenant for life of the right to be in possession of the rents and profits from these properties, and to collect them, as she wishes, through some agent of her own appointment, while accepting the corresponding liabilities for repair and maintenance. There is force in Mr. Matheson’s observations as to the desirability of taking the long view with regard to the properties in Oldcastle; an immediate increase of the rents of these properties to the maximum sanctioned by the Rent Acts is not necessarily the best policy from the long-term point of view for the benefit of the estate and of the persons entitled in remainder. There is a limit, however, to the application of this principle. The life tenant, while she remains entitled to the income, is entitled to have the property made as beneficial to her *107 as is possible consistently with not damaging the interest of the persons entitled in remainder. Consequently, I think that so far as the property in Oldcastle is concerned it would be consistent with convenience and fairness to put the tenant for life into possession.
The difficulty arises with regard to the replanting of trees at Loughcrew; evidently the trustee has an interest in that as representing the estate generally and the persons entitled in remainder, even though the tenant for life is the licensee and is the person actually liable under the Forestry Acts. It is very much the concern of the trustee that the replanting should be done, and done properly, and in making my order in this case I must reserve to the trustee a reasonable right to enter on the lands and inspect the replanting, and if necessary reserve facilities for the carrying out of the replanting to the trustee himself.
If I do not make any order concerning the funds invested, I will still leave some small amount of funds in the trustee’s hands, bearing some small income. This might not be enough, if the trustee had to recoup the estate the cost of replanting for which the tenant for life is responsible. I think that there should be some undertaking concerning the recoupment of the estate on the lines suggested by Mr. Matheson, to be settled between themselves by Counsel for both parties to this suit. These matters can be satisfactorily dealt with between the parties, and if they are not, the suit already in Court concerning the replanting of the land can be reentered and the appropriate order made concerning the carrying out of the replanting and stating how the cost of replanting is to be borne and whence the actual funds for the replanting are to be provided.
Beyond this it is not necessary to go now. But in respect of the property of which I am letting the tenant for life into possession, undertakings should be given along the lines required in In re Wythes [1893] 2 Ch. 369, particularly with regard to the property in Oldcastle where there may be subsisting outstanding liabilities on the part of the trustee as landlord.
The remaining part of the order sought by the plaintiff is that she should be given the powers conferred on a tenant for life under the Settled Land Acts, over and above what has already been given by the order of the late President of the High Court, namely the power of leasing and surrender. I think that she should be given these powers, but in a modified degree. It is proper to give her these powers, but where the testator has directed that the trustees shall have the power of sale, the qualification should be that the plaintiff be given all the powers of the tenant for life under the Settled Land Acts, save that the power of sale and exchange may be exercised by her only with the consent of the trustees.
The plaintiff should pay the trustee’s costs.
Revenue Commissioners v Royal Trust Company (Ireland)
[1971] 11 JIC 0801
Judge: KENNY J.
A number of questions relating to the meaning of the settlement were debated. The Revenue contended that each of the three children took immediate vested interests in their shares of the trust fund and that these were liable to be divested in the event of death under 30 or 40. In so far as real estate is concerned the issue whether a devise or settlement of it has created a vested or a contingent interest is always difficult to decide because of the rule of construction said to have been established in Phipps v. Ackers ( 9 Cl. and Fin. 583) but the property settled in this case consisted of shares and debentures and so the meaning of the settlement is to be determined by the words used in the context and not by artificial rules derived from medieval social conditions (see Murphy v. Murphy ( 1951) T.R. 308). Clause 3 (c) (ii) which I have already set out provides that the trust fund is to be held upon trust as to one-half of it “for such of the settlor’s said three children as attain the age of thirty years ……… and as to the remainder of the trust fund for such of the settlor’s said three children as attain the age of forty years”. These show that until each child attained the ages mentioned he had no vested interest in the share appropriated to that interest in the trust fund. Attainment of the age of thirty was a condition precedent to getting any interest. It follows that Tara had, at the date of his death, a contingent interest only in the two shares of the trust fund which had been appropriated by the trustees.
The Revenue contended that clause 3 (b) gave the trustees the power to apply the income of the two appropriated shares during the life of Tara for his benefit or for that of his children. The argument was that if his share was contingent, all those who could in an event become entitled to it were included in the class referred to in clause 3 (b). This was the foundation of the argument that duty was payable under s.21 (2) of the Finance Act 1965. I think that the words “during the suspense of absolute vesting in any person or persons contingently entitled to a share in capital or any part thereof under the provisions of this settlement at their discretion to pay and apply the income thereof for or towards the maintenance education or benefit of any such person or persons” meant that the trustees had power to make payments only to the persons immediately contingently entitled. Until Tara attained 30 the suspense of absolute vesting referred to must have related to him only and could not refer to the position of his children. They had a contingent interest only if he died before he attained the age of 40. The settlement contemplated an absolute vesting in him of part of the trust fund when he reached 30 and of another part when he reached 40 and these were the interests which were suspended until he had reached these ages. I do not agree with the argument that during the lifetime of Tara the trustees could under clause 3 (b) apply any part of the income of the two shares to which he was entitled to the maintenance of his children or indeed of anyone except him.
Counsel for the trustees has contended that the whole contingent interest of Tara under the settlement escapes liability for duty because of s.5 sub-s.(3) of the Finance Act 1894. It reads: “(3) In the case of settled property, where the interest of any person under the settlement fails or determines by reason of his death before it becomes an interest in possession, and subsequent limitations under the settlement continue to subsist, the property shall not be deemed to pass on his death.” This sub-section was amended by s.28 of the Finance Act 1938but it was agreed that this change was not relevant to any of the issues in this case. This exemption, it was said, extended to the contingent interest despite the power of the trustees to apply the income of it for maintenance. The Revenue argued that the property was not settled and that if it were, the power to apply income for maintenance made the contingent interest one in possession. S.22 (1) of the Finance Act 1894 is the definition section for the purposes of that Act. Sub-paragraph (h) provides that the expression “settled property” means property comprised in a settlement and sub-paragraph (i) reads: “The expression lsquo;settlement” means any instrument, whether relating to real property or personal property, which is a settlement within the meaning of section 2 of the Settled Land Act, 1882, or if it related to real property would be a settlement with the meaning of that section… S.2 (1) of the Settled Land Act 1882 reads: “(1) Any deed, will, agreement for a settlement …………under or by virtue of which instrument or instruments any land, or any estate or interest in land, stands for the time being limited to or in trust for any persons by way of succession, creates or is for the purposes of this Act a settlement… The Revenue submission was that the funds settled by the settlement were not limited to or in trust for any persons by way of succession but that the interests created were substitutional. If any of the settlor’s children died under 30 or 40 without issue, the others received his share, it was said, not by succession, but by substitution and if any of them died leaving issue, the issue received the parent’s share in his place. The answer made to this was that the Attorney General v. Power (1906) 2I.R. 272 had decided that a document similar to the one in this case created a settlement. In that case, however, it was conceded that there was a settlement and the decision is, therefore, not an authority on this point. The phrase “by way of succession” in the Settled Land Act is one to which a narrow or technical meaning is not to be given and is to be regarded as equivalent to “successively upon death” (see the judgment of Mr. Justice Kennedy in A.G. v. Owen [1899] 2 Q.B. 253 and also the decision in Mundy and Ropers Contract (1899) 1 Ch. 275.) The Attorney General v. Clarkson [1900] 1 Q.B. 156 seems to me to be an authority for the view that when a document creates a contingent interest, it is a settlement until the contingent happens. In that case there was a contingent gift to the testator’s sons if they attained 25 or married: if they died under 25 leaving issue, the legacy of the son so dying was left to his children who reached 21. Two of the sons attained 25 in the lifetime of the testator but another died under that age and Settlement Estate duty was claimed on the legacy on his death. The Court held that the property was settled, that it was settled on persons by way of succession and that the duty was payable. Similarly, in this case the gift of one-half of the trust fund for such of the settlor’s said three children who attained the age of 30 and of the remainder of the trust fund for such of the said three children who reached 40 created a settlement.
But if this view is wrong, 1t seems to me that the trust declared in respect of the settled property in the event of all three children dying under 30 created interests by way of succession. If that happened the trustees were to hold the trust property for such person or persons absolutely who would be entitled thereto under the provisions of the Statutes for the distribution of the personal estates of intestates if the settlor had died a widow without issue and any person who became entitled to any benefit under this clause would do so by way of succession and not by substitution. I reject the contention that the document of 1954 was not a settlement.
As the trustees contended that the Attorney General v. Power (1906) 2 I.R. 272 was an authority for the view that the interest of Tara was not one in possession and that the exemption given by s.5 (3) of the Finance Act 1894 extended to the two shares despite the power to pay maintenance it is necessary to examine that case in some detail. Under two settlements made in 1873 property was limited to trustees from the death of the survivor of the father and mother (which occurred in 1892) “to the use of the children of the intended marriage and their respective heirs and assigns forever as tenants in common” with a limitation over that if and so often as any of the said children should die under the age of twenty-one years without leaving issue surviving him or her, then as well as to his or her original share, as also to the share or shares which should have accrued to him under the limitations in the settlement “to the use of the other of the said children and their respective heirs and assigns forever in equal shares as tenants in common”. The settlements also contained this clauses “If anyone who, but for this proviso, for the time being entitled to the possession or receipt of the rents of the premises or of any undivided share of them, shall, being a male, be under the age of twenty-one years…….the trustees shall enter into the possession or receipt of the rents, and shall, during the minority of such person, continue in such possession and receipt and manage the same and shall apply an annual sum or sums which they shall think proper, according to the age of such minor, in or towards his or her maintenance, education, advancement or benefit and shall invest the residue and accumulate the annual income thereof and be possessed of the rents and accumulations and the income thereof, if the person during whose minority the rents shall have been accumulated shall attain the age of twenty-one upon trust for such person, but if such person being a male shall die under twenty-one, then upon trust for the persons or person who shall ultimately become indefeasibly entitled to the premises or the undivided share”. Hubert Power, one of the children of the marriage, died in August 1898 under 21 without leaving issue and at that date another child was over 21 while a third was under that age. The Revenue claimed that estate duty was payable on the death of Hubert. It is to be noted that his interest was vested but liable to be divested on his death under 21 and so that case is not similar to this. Palles C.B. rejected the claim for duty because Hubert had not an interest in possession and so S.5 (3) of the 1894 Act applied. The decisive feature was that the trustees had a discretion until Hubert attained 21 as to whether they would pay him; any part of the income and if they did not pay the whole of it to him, they had to accumulate it. His judgment contains this passage: “Now the cardinal fact here and that on which I base my judgment is that Hubert was not entitled to be paid the whole income of the third. The residue after payment of such sums as should be applied for his maintenance and prior charges was to be accumulated and to be held on trust under which, not Hubert, but the present defendants became entitled. Was Hubert’s interest an interest in possession which I agree with the Attorney General means possession properly so-called as distinct from remainder or reversion………Had Hubert here been entitled to the entire surplus of the rents and profits of his share, I should have held his estate was one in possession; but being, as I hold him; to be, entitled to part only of that surplus, and that fluctuating, uncertain and incapable of being defined or ascertained irrespective of its application, I must hold that his estate is not in possession and that such sums as he might receive for maintenance were payable to him, not by reason of his vested estate which must be taken to be subject to the estate or interests of the trustees, but as maintenance eo nomine, out of the express trust for its payment to him out of the interim income of an estate, the present income of which was not his, but the trustees.” Power’s Case (1906) 2 I.R. 272 has been accepted as correct since it was decided and was expressly approved by Lord Wilberforce in Gartside v. The Inland Revenue Commissioners (1968) 1 All E.R.121. Moreover the last mentioned case establishes that the object in whose favour a discretionary trust may be exercised has not got for the purpose of the estate duty code “an interest” in the funds out of which the income payable under a discretionary trust is derived.
In my view the contingent interest of Tara in the funds settled by the settlement was not “an interest in possession” at the date of his death and his right to have the trustees exercise their discretion as to whether they would pay maintenance to him was not “an interest” in the sense in which that ambiguous word is used in the Finance Act 1894 or in any of the Acts which have greatly widened its incidence. After Tara died, subsequent limitations under the settlement of 1954 continued to subsist and the contingent interest which he had did not therefore, pass on his death.
The next Revenue argument was that there was a passing of the two shares to which Tara was contingently entitled at his death because there was a discretionary trust in his favour during his lifetime to apply all or any of the income of his shares for his benefit and, on his death, this power could be exercised in favour of his two children. The case, it was said, fell within the principles laid down in Scott v. The Commissioners of Inland Revenue 1937 A.C. 176 The startling result of this Argument is that estate duty might become payable on the two shares to which Tara was contingently entitled on three occasions before the date when he would have attained 30 if he had lived. The argument was that duty was payable on his death because the group entitled to maintenance changed and as the power of applying the income of the contingent share could be exercised in favour of each of his children if he died under 30, it would follow that duty would be payable on the death of each of them if they died under 21. Thus, if both died when they were under 21, estate duty would be leviable on each occasion.
In order to state what was decided in Scott’s Case and Burrell’s Case it is necessary to set out the relevant provisions of s.1 and s.2 (1)(b) of the Finance Act 1894 which are so painfully familiar. S.1, so far as relevant, reads; “1. In the case of every person dying after the commencement of this Part of this Act, there shall, save as, hereinafter expressly provided, be levied and paid, upon the principal value ascertained as hereinafter provided of all property, real or personal, settled or not settled, which passes on the death of such person a duty, called Estate Duty; at the graduated rates hereinafter mentioned, ……..” while s.2 (1) (b) provides: “Property passing on the death of the deceased shall be deemed to include the property following, that is to say. (b) Property in which the deceased or any other person had an interest ceasing on the death of the deceased, to the extent to which a benefit accrues or arises by the cesser of such interest.” In Scott ???query?????? Inland Revenue Commissioners (1937) A.C. 174 the fifth Earl of Cadogan and his eldest son settled estates to the use of the eldest son as tenant for life with remainder to the use of his sons successively in tail male and in default of issue to the use of the second son of the fifth Earl for life with other remainders. The fifth Earl subsequently bought the life interest of his second son and conveyed this to two trustees to hold it during the life of his second son upon discretionary trusts in favour of his second son, his wife and his children and, subject to this upon trust to accumulate the surplus of the rents and profits. In 1908 the eldest son of the fifth Earl died and in 1910 his only son died. In 1915 the fifth Earl died and was succeeded by his second son as sixth Earl and the life estate became an estate in possession and was therefore held upon the discretionary trusts which had been declared in respect of it. In 1933 the sixth Earl died and was succeeded by his son who became the seventh Earl. The Revenue claimed estate duty on the death of the sixth Earl. In the course of his speech Lord Russell of Killowen said: “It will be seen that the result of this Disposition by the Fifth Earl of the life estate of the Sixth Earl was that immediately before the death of the Sixth Earl the income of the property had to be applied in payment to or for the benefit of all or any of the objects of the discretionary trust, or (in so far as not so applied) in accumulation and the payment off of incumbrances. The persons beneficially interested in the income of the property at that moment were therefore the various persons who were objects of the discretionary trust and the persons who might ultimately benefit by the accumulations and discharge of incumbrances. Immediately after the death of the Sixth Earl the only person interested in the income was the Seventh Earl as tenant in tail male in possession. Did the property pass to him, within the meaning of the Finance Act, 1894 on the death of the Sixth Earl?….. On the death of the Sixth Earl, the Seventh Earl’s estate in tail male became, instead of an estate in remainder, an estate in tail male in possession. He became entitled to receive the whole income of the estate, which immediately before the death of the Sixth Earl was primarily applicable for the benefit of the objects of the discretionary trust. That in my opinion was a change of hands in the beneficial title or possession of the property as a whole occurring on the death of the Sixth Earl, which constituted a passing of the property on that death within the meaning of s.1 of the Finance Act of 1894”.
That case and Burrell’s Case (1937) A.C. 286 (if correctly decided) establish that if a discretionary trust is created and if the death of a person has the result that the group of persons to whom the income may be applied changes as a result of it and not because of the death of one of the objects, (for until 1965 when the Oireachtas intervened, it was settled law that no estate duty was payable on the death of one of the objects of a discretionary trust when two or more survived) then duty may be payable on the entire fund on the ground that the group entitled to the income has changed as a result of the death and so the property out of which the income issues passes. The Revenue seek to apply the reasoning of these cases to this by contending that prior to Tara’s death, the income or part of it had to be applied for his maintenance while, after his death it could be applied for his children for the same purpose and then say that his death had the result that a new group, his children, became entitled to be considered for payment as objects of the discretionary trust. To this ingenious argument there are a number of good answers The relationship between ss. 1 and 2 of the Finance Act 1894 was discussed in the Public Trustee .v. The I.R. Commissioners (1960) 1 All E.R. 1 in which the traditional view, based upon some incautious generalisations by Lord MacNaghten, that they were mutually exclusive, was decisively rejected. On the death of Tara no interest in the income passed for he had no right to be paid anything by the trustees. The Revenue must therefore rely upon s.2 (1) (b) and establish that he had an interest ceasing on his death in the income which might be applied for his maintenance. But Gartside v. The Inland Revenue Commissioners (1968) 1 All E.R. 121 decides that the object of a discretionary trust has no interest for estate duty purposes in the capital which is settled or in the income itself. Therefore Tara had not an interest ceasing on his death in the income which might be applied for his maintenance and so nothing passed on his death. The next answer is that the matter has been in my opinion, correctly decided in Lord Advocate v. Muir (1942) 21 A.T.C. 204. In that case a fund was left to the testator’s son when he attained 25 The trustees had power which was not exercised, to vest the property in him at an earlier date and a power, which they exercised to apply the income of it at their discretion for his maintenance. Unapplied income was to be accumulated. The son died under 25 without issue and his sister became entitled to the fund. There was, therefore, a power to apply the income of a fund to a person contingently entitled. Lord Keith accepted the view that s.5 (3) of the Act of 1894 had no application where there was a passing under s.1 or under s.2 (1) (b) but was of opinion that s.5 (3) conferred exemption from duty because there was no passing under s.1 or under s.2 (1) (b). At the son’s death there was no real beneficial right in anyone but merely a prospective right to have income applied for maintenance. This is a happier expression of what the Chief Baron meant, I think, when he referred in Power’s Case (1906) 2 I.R. 272 to “maintenance eo nomine out of the express trust for its payment to him out of the interim income of an estate, the present income of which was not his but the trustees”. The power to apply income for the maintenance of Tara was not in any sense a trust and it is confusing to compare or equate it with the position of the objects of a discretionary trust. I agree with the statement in the tenth edition of Haneon’s Death Duties in paragraph 537 a: “No true group life tenant appears to be created by a more power for the maintenance of an individual.” Lastly, the words of Mr. Justice Ungoed Thomas in the High Court in Gartside v. The Inland Revenue Commissioners (1966) 3 All E.R. 89 at p.104 have particular force in this case: “The Crown’s submissions would mean, as pointed out by Palles, C.B., in the passage which I have quoted, that the trustees’ statutory power of maintenance would give a minor beneficiary with a contingent interest an interest in possession and cause a passing on his death under twenty-one, a conclusion disavowed by the Attorney General before Palles, C.B., and a far reaching claim which I understand has never been made by the Crown. These considerations to my mind reinforce the conclusion unfavourable to the Crown to which I have come on the first question.” I agree with this and I am not aware of any case up to now in Ireland in which it has been contended that when there is a contingent interest with a power to apply income in the period before the contingency happens for the maintenance of the person who may become entitled, duty is payable on his death before the contingency happens because of the power of maintenance.
The next contention by the Revenue was that some duty was payable under s. 21 (2) of the Finance Act 1965. This section was intended to make estate duty payable in certain circumstances on the death of an object of a discretionary trust. Sub-s(2) reads: “Where property is vested in a trustee upon trusts under which the income or capital of the property may be paid to one or more of a number or of a class of persons as the trustee or any other person may, at his discretion, select and one or more of those persons dies or die during the continuance of the discretionary trust and after the passing of this Act, any person so dying shall, for all purposes of estate duty, be deemed to have had an interest limited to cease on his death In the property”. Sub-s. (3) then provides a method of valuing the interests. I have already decided that during Tara’s lifetime he was the only person to whom the trustees could pay any of the income of the securities appropriated in respect of his two contingent shares. Sub-s. (2) deals only with the case where income or capital may be paid to one or more of a number or of a class of, persons. It does not include the case in which income may be paid to one person only for he is not one or more of a number or of a class of persons. The Revenue seek to construe the section as if it read: “Where property is vested in a trustee upon trust under which the income or capital of the property may be paid to a person or to one or more of a number or of a class of persons”. I do not think it has this meaning and I am certainly not prepared to give it a construction which would have the result that duty was payable ….
In my view none of the grounds upon which the Revenue claim that duty was payable on the death of Tara Browne are correct. This summons which seeks an order that the trustees are to deliver to the plaintiffs an account of the property which passed under s.1 or was deemed to pass under s.2 (1)(b) on his death must accordingly be dismissed.
McGuinness v Sherry & Gillanders
[2008] IEHC 134
Judge: Mr. Justice John MacMenamin
In the application, the plaintiff seeks directions as to the type of interest conferred upon her by her late husband’s Will. The deceased, in his last Will and Testament dated 1st May, 2002, made the following devises:
“I give and devise to my wife, Ellen, my dwelling house (including front street, gardens, garage, planting, old orchard, yard, rear sheds, cattle crush and farm buildings) with right to enjoy existing services with right of access thereto and therefrom at all times on foot and with vehicles. I give and devise the remainder of my real property to my five children, namely, Charles, Sean, Geraldine, Elizabeth and Teresa,and to my wife, Ellen, jointly, subject to and charged with payment of the sum of €100,000 in favour of my wife, Ellen, payable within one year following the date of my death, and subject to the right of Ellen to have use and occupation of my said real property for the term of herlife, free of charge.” (Emphasis added). The emphasized portion gives rise to the issue.
The first portion of the devise relating to the dwelling house is relatively straightforward. It provides clearly that the plaintiff is entitled to the whole interest in that part of the property. Steps have been taken to comply with the devise in the recent past. The fundamental issue facing the Court is as to the remainder of the real property as referred to in the second devise. The plaintiff contends that she has the benefit, not only of the joint interest, along with her five children, but in addition that she is entitled by virtue of the devise of the “use and occupation” of the property for her lifetime for a life tenancy in the said property.
It is acknowledged that such a claim has consequences for the nature of the joint ownership granted for the first part of that devise.
Section 2 (5) of the Settled Land Act 1882 defines a tenant for life as follows:
“The person who is, for the time being under settlement, beneficially entitled to possession of settled land for his life, is for the purposes of this Act, the tenant for life of that land and the tenant for life under that settlement.”
On the other hand, s. 81 of the Registration of Title Act1964 defines a right of residence as follows:
“A right of residence in or on registered lands, whether a general right of residence of the land or an exclusive right of residence in or on part of the land shall be deemed to be personal to the person beneficially entitled thereto and to be a right in the nature of a lien for money’s worth in or over the land and shall not operate to create any equitable estate in the land.”
The plaintiff submits that what is being conferred upon the plaintiff arising from the second devise is not simply a right of residence. The plaintiff had already been given the dwelling house and farm buildings under the Will, thereby providing for her residence. What is at issue is interpretation of the devise the plaintiff’s right to the “use and occupation” of the remaining lands. Does the said devise afford the plaintiff a right of exclusion of the other joint owners insofar as the vesting of property in six joint owners would have entitled all of them to the use and occupation of the lands in common with the other owners? In those circumstances, it is submitted by counsel for the plaintiff that the use by the deceased of the expression “use and occupation” of the land must be taken to mean anadditional right enjoyed by the plaintiff to the exclusion of other parties.
In the process of interpretation, I propose to adopt the principles as set out in the decision of Carroll J. in the case ofHowell v. Howell [1992] I.R. at p. 290, that is:
i (i) Read the immediately relevant portion of the Will as a piece of English and decide, if possible, what it means.
ii (ii) Look at the other material parts of the Will and see whether they tend to confirm the apparently plain meaning of the immediately relevant portion, or whether they suggest the need for modification in order to make harmonious sense of the whole, or, alternatively, whether an ambiguity in the immediately relevant portion can be resolved.
iii (iii) If ambiguity persists, having regard to the scheme of the Will, I consider what the testator was trying to do.
iv (iv) Then, have resort to rules of construction, where applicable, and aids, such as the presumption of early vesting and the presumptions against intestacy and in favour of equality.
v (v) Then see whether any rule of law prevents a particular interpretation from being adopted.
vi (vi) Finally, once the dispute of passage has been exhaustively studied, one may get help from the opinions of other courts and judges on similar works rarely as binding precedents, but more often as examples of how judicial minds, nurtured in the same discipline, have interpreted words in similar contexts. In adopting this test, Carroll J. was approving the Northern Ireland decision of Herron v. Ulster Bank [1974] N.I. 44, a decision of Lowry L.C.J.
10. Prior to embarking on the process of interpretation, it is well to set out certain material which is sworn in the affidavit of Terry Gillanders, one of the two executors. Mr. Gillanders sets out the difficulties which were encountered by the executors arising from the difficulties in interpreting the Will. These included issues as to how the interests of the beneficiaries should be registered, be it as joint tenants or tenants in common; whether or not the charge for use and occupation free of charge amounted to a life tenancy and how such charge could be secured, and whether such matters could be resolved by agreement of the beneficiaries, or failing that, by directions of the Court.
11. A common letter was sent to the beneficiaries on 31st October, 2007, advising them of possible options. A number of the beneficiaries have responded, but not all. I do not think it is appropriate to deal with the views of any particular beneficiary as no extrinsic material is to be relied on in the process of interpretation of the Will. The question is one of simple interpretation
12. It is unnecessary for the moment to refer to sub-clause A. For this exercise, the main focus must be on sub-clause B. The intent of the testator was that the remainder of the real property should be devised to the testator’s children and to his wife jointly. However, this is subject to two provisos. The first was that there was to be created a charge in the sum of €100,000 in favour of Ellen McGuinness (the testator’s wife, some twenty years his junior), payable within one year by the children. The second proviso was that the devise was “subject to the right of my Ellen to have use and occupation of my said real property for the term of her life, free of charge.” Sub-clause C provides that subject to payments of debts, funeral and testamentary expenses, the remainder of the testator’s property was devised to Ellen, absolutely.
13. On behalf of the defendant, it is submitted that the difficulty is not in interpreting the expression “the right to use and occupy”, but rather than the bequest in favour of the plaintiff of an undivided one-sixth share in the remainder of the testator’s real property, carries with it an entitlement to have the use and occupation of that property free of charge and a clause in the testator’s Will which reads “and subject to the right of my Ellen to have use and occupation of my said property for the term of her life, free of charge” adds nothing to this bequest. It is said to be otiose. The defendant submits simply the plaintiff, in asserting her case, is effectively seeking to “amend” the Will so as to confer on Ellen McGuinness exclusive use and occupation of the property.
14. The real question to be decided is whether the testator intended to grant his wife something over and above the rights which are devised to his children in the lands. Analysing clause B as a piece of English in accordance with authority, there are number of pointers which are helpful. In the first instance, the devise to the children was subject to the payment of the sum €100,000 within one year. Clearly this was something over and above the right of the children, Charles, Sean, Geraldine, Elizabeth and Teresa.
15. One looks, then, to the second part of the specific devise. The question to be asked here is whether it is again the intent of the testator to grant ‘his Ellen’ something over and above the devise to the other children. I conclude that this was the testator’s intention. Just as he wished to give his wife, Ellen, something over and above the devise to the children by reason of the charge, I conclude that he also wished to give something additional over and above the other beneficiaries, that is to say the use and occupation of the real property. Looked at another way, he wanted his wife, Ellen McGuinness, to remain on in the house and lands for her lifetime with the security of the additional charge of €100,000 payable by the children. What was granted to Ellen McGuinness was not simply a right of residence. This had already been granted in the dwelling house and farm buildings under the Will. This provided for her residence. As an aid, it might (if permissible) be useful to consider what the effect of the alternative interpretation urged would be. The consequence would be that while Ellen McGuinness would be entitled to reside in the house, her right to the other real property would not be an exclusive one and would be subject to the rights of joint owners, that is to say, her children, in that real property, and to take such steps as they, as joint owners, might be entitled to avail of. That was the intent of the testator. Such an interpretation might well have consequences including as to the use of the lands surrounding the dwelling house which are the real property in question.
16. But the true test is the Will itself. I consider that the only interpretation of the clause which by use of the terms “subject to” give super-added rights to the wife. They are to give her exclusive possession for her lifetime. To interpret the Will as giving the plaintiff no more than a one-sixth interest in the subject property, would, effectively, be to render the expression “as subject to the right of my Ellen to have use and occupation of my said property for the term of her life free of charge” inoperative.
17. While the devise may have been difficult to interpret, any question can be resolved in this way. Clearly, the intent of the testator was, in fact, to give his wife Ellen more than a one-sixth interest in the subject property and this is not only emphasized by the charge, but re-emphasized by the concluding part of the devise. It is unnecessary to go further than the second principle in Howell v. Howell.
18. To place an interpretation on the devise which might tend to undermine the integrity of the entire holding, that is to say the house and farm, would surely be to negate a proper interpretation of what was the testator’s intent.
19. Jarman on Wills (7th Edition) sets out a summary of several rules of construction. One of these is rule XVI. It provides that words, in general, are to be taken in their ordinary and grammatical sense, unless a clear intention to use them in another can be collected and that other can be ascertained; and they are, in all cases, to receive a construction which will give every expression some effect, rather than one that will render any of the expressions inoperative; and of two modes of construction, that is to be preferred which will prevent a total intestacy.
20. Rule XIX provides that words and limitations may be transposed, supplied or rejected where warranted, by the immediate context or the general scheme of the Will; but not merely on a conjectural hypothesis of the testator’s intention, however reasonable, in obvious to the plain and obvious sense of the language of the Instrument.
21. It may be that the interpretation which I conclude is a true one may have the effect of rendering some parts of the devise surplusage. But that is far from saying that it renders any of the expressions contained in the devise inoperative. That is not the effect of the interpretation. Moreover, for the reasons I have outlined, I am not persuaded the interpretation in question is predicated on a “conjectural hypothesis” in opposition to a plain and obvious interpretation. The interpretation, in fact, is reasonable. There is no plain and obvious language to the contrary effect in the devise.
22. The matter is further clarified (if necessary) by the second principle. The more general provisions of the Will, if anything, support the conclusion which I have reached. In the first place, the remainder of the Will, is, in general, well drafted. There are specific requests to two of the testator’s daughters, Teresa and Geraldine. These are both in the sum of €6,000. Thus, the interests of those two daughters are more specifically dealt with over and above other beneficiaries. In the concluding portion of the Will, there are two other specific requests to two nephews, Patrick and Larry Sherry. Thus, in four separate areas, where the testator wished to make specific provision, he does so. His intent to ensure that his wife’s security properly protected for her lifetime is reinforced by the final bequest, that is to say the remainder of the testator’s property, to his wife, Ellen, absolutely.
23. I consider that the devise with which we are concerned permits of the supplying of a word in circumstances outlined by Jarman at p.556, that is to say:
“Where it is clear on the fact of a Will that the testator has not accurately or completely expressed his meaning by the words he has used, and it is also clear what are the words he has omitted, those words may be supplied in order to affect the intention, as collected from the context.”
24. I consider that the remainder of the devise as to use and occupation for the term of Ellen’s life, free of charge, can only be effected by the construction of the devise with the insertion of the word ‘exclusive’. I do not consider that such an interpretation involves the re-writing of the Will. It is simply to remove a possible ambiguity. I will hear counsel on the form of the order.
W v M & D
[2010] IEHC 505
[2011] 2 IR 204
Jurisdiction: Ireland
Miss Justice Laffoy
2 1.1 These proceedings, which were initiated by special summons which issued on 3rd June, 2010, seek an order pursuant to s. 24 of the Land and Conveyancing Law Reform Act 2009 (the Act of 2009) approving the Scheme of Arrangement annexed to the special summons in respect of a declaration of trust made on 18th July, 1997 (the trust document) the contents of which will be set out in extensor below. The plaintiff also seeks ancillary relief.
3 1.2 Section 24 of the Act of 2009 is contained in Part 5, which is headed “Variation of Trusts”. There are only two sections in Part 5, s. 23, which is the interpretation section, and s. 24, which sets out the jurisdiction of the Court to vary trusts. In broad terms, Part 5 implements the recommendations of the Law Reform Commission in its report on The Variation of Trusts published in December 2000 (LRC 63 – 2000), although the Oireachtas departed from the recommendations in certain instances. Part 5 confers a novel jurisdiction on the Court. As far as I am aware, this is the first application to come before the High Court under Part 5.
4 1.3 Section 24 envisages the manner in which an application is brought to this Court being regulated by rules of court. For instance, subs. (2) provides that the Court shall not hear an application made to it under subs. (1) unless it is satisfied that the applicant has given notice in writing of the application, inter alia, “to such persons as may be prescribed by rules of court” at least two weeks before the hearing of the application. The only provision which has been made in the Rules of the Superior Courts (the Rules) regulating applications under s. 24 is the provision in the Rules of the Superior Courts (Land and Conveyancing Law Reform Act 2009) 2010 ( S.I. No. 149 of 2010) that an application for an order under s. 24 may be brought by way of special summons. There is no specific provision prescribing the giving of notice. The plaintiff in these proceedings has utilised the special summons procedure. Therefore, the application has been properly brought in accordance with Order 3 (11B) of the Rules. By way of general observation, notwithstanding the difficulties which the application raises, the plaintiff’s legal advisers are to be commended in relation to the comprehensive manner in which the matter has been presented to the Court.
Sub-section (1) of s. 24 provides:
“An appropriate person may make, in respect of a relevant trust, an application to the court for an order to approve an arrangement specified in the application for the benefit of a relevant person specified in the application if the arrangement has been assented to in writing by each other person (if any) who – ”
(a) is not a relevant person,
(b) is beneficially interested in the trust, and
(c) is capable of assenting to the arrangement.”
Throughout s. 24 it is made clear that “the relevant person” whose benefit is at issue must be specified in the application. The expressions “appropriate person”, “relevant person” and “relevant trust” are defined in s. 23, as is the word “arrangement”, which, in relation to a relevant trust, is defined as meaning –
“an arrangement -”
(a) varying, revoking or resettling the trust, or
(b) varying, enlarging, adding to or restricting the powers of the trustees under the trust to manage or administer the property the subject of the trust.”
2 2.1 In s. 23 “relevant person” is defined, in relation to a relevant trust, as meaning any of the following:
(a) a person who has a vested or contingent interest under the trust but who is incapable of assenting to an arrangement by reason of lack of capacity (whether by reason of minority or absence of mental capacity),
(b) an unborn person,
(c) a person whose identity, existence or whereabouts cannot be established by taking reasonable measures, or
(d) a person who has a contingent interest under the trust but who does not fall withinparagraph (a).”
3 2.2 I am satisfied that the trust created by the trust document is a “relevant trust” within the meaning of that expression in s. 23. Accordingly, in accordance with subs. (1) of s. 24 the Court has jurisdiction to entertain an application for an order to approve an arrangement to vary, revoke or resettle the trust which is for the benefit of a relevant person, provided the arrangement has been assented to by all of the persons beneficially interested in the trust who, in broad terms, are identifiable and capable of assenting.
4 2.3 By virtue of subs. (4) of s. 24 the Court has two options as to the manner in which it shall determine the application, which are set out as follows:
a “(a) subject toparagraph (b), by making an order approving the arrangement specified in the application if it is satisfied that the carrying out of the arrangement would be for the benefit of –
(i) the relevant person specified in the application, and
(ii) any other relevant person,
(b) by refusing to make such an order in any case where –
(i) the court is not satisfied as referred to inparagraph (a), or
(ii) the Revenue Commissioners have satisfied the court that the application is substantially motivated by a desire to avoid, or reduce the incidence of, tax.”
Sub-section (5) elaborates on what constitutes “an arrangement.… for the benefit of a relevant person” by providing that, in making a determination under subs. (4) –
“… the court may have regard to any benefit or detriment, financial or otherwise, that may accrue to that person directly or indirectly in consequence of the arrangement.”
5 2.4 The relevant trust in this case, which was created by the trust document, related to a life assurance policy. It is necessary to consider the provisions of the policy and of the trust document in considerable detail.
2 3.1 The policy was issued by Irish Progressive Life Assurance Company Limited (Irish Progressive) on 15th July, 1997. It was what was described as a “Term 100 Plan” policy. The lives assured were F, to whom I will refer as “the father”, and his wife, M, who is named as the first defendant in these proceedings, and to whom I will refer as “the mother”. At the time, the father was over 77 years of age and the mother was over 70 years of age. The sum assured under the policy is a very substantial sum. The yearly premiums, which have been paid since 1997 and are still being paid, are correspondingly substantial. The policy provided that the death benefit would be payable on the last death, that is to say, the survivor of the father and the mother. There was only one special condition in the policy document, which provided that the policy was issued subject to the terms of the trust document.
3 3.2 The trust document was based on a standard form issued by Irish Progressive, which I note was designated a “Flexible Trust Dual or Joint Life”. I also note that it contained a disclaimer that, while every care had been taken in its drafting, Irish Progressive did not accept any responsibility for its suitability in any case, and that, in case of doubt, the policyholders should consult their professional adviser. The problem which has arisen in this case might have been avoided if they had done so.
4 3.3 At the commencement of the trust document, the father and the mother are referred to as “the Settlors” and there is reference to the policy. The operative part provides as follows:
“The Settlors request and authorise [Irish Progressive] to issue the policy to the Settlors as trustees upon the trusts hereinafter expressed:”.
That provision is succeeded by five clauses numbered 1 to 5. Clause 1 contains the beneficial provisions in relation to the proceeds of the policy. In an effort to understand clause 1, I propose to break it down into five segments.
5 3.4 In segment I, the trustee or trustees for the time being are referred to as “the Trustee” and the monies payable under the policy are referred to as “the Trust Fund”. In segment I, insofar as is relevant in the events which have happened, it is provided that the Trustee shall hold the Trust Fund –
“upon trust, if and only if the benefit under the policy shall become payable in consequence of the death of the survivor of the Settlors … for the benefit of all such one or more exclusively of the others or other of all the children and remoter issue of either of the Settlors (including children and remoter issue adopted whether before or after the date hereof), the parents, brothers, sisters, uncles, aunts, nephews and nieces of either of the Settlors who are now living or shall hereafter be born during the lifetime of either of the Settlors and the additional beneficiary or beneficiaries (if any) named later in this clause in such shares and subject to such conditions as the Settlors, or the survivor of the Settlor’s (sic) in their absolute discretion shall be (sic) deed or deeds revocable or irrevocable appoint.”
The effect of the foregoing was that the primary trust was a discretionary trust to be exercised by the father and the mother, or the survivor, among three classes of beneficiaries: children and remoter issue; other close relations; and the “additional” named beneficiaries. A notable exception from the classes of beneficiaries are spouses of children of the settlors.
6 3.5 Segment II is a proviso which regulates the exercise of the power of appointment, for example, by stipulating that no appointment shall be made nor any power of revocation exercised after the death of the survivor of the settlors, which seems to me to be stating the obvious.
7 3.6 Segment III is crucial in the context of the problem which arises in this case and it provides as follows:
“and in default of and subject to any such appointment for the absolute benefit of”
C as to 50% of the Trust Fund,
D as to 50% of the Trust Fund.”
In the margin opposite that segment there is an instruction: “Insert initial beneficiaries and their share of policy proceeds”. The names and the percentages which appear in segment III were entered in manuscript.
8 3.7 Segment IV is another proviso in the following terms:
“provided that if any of the said beneficiaries shall predecease such one of the Settlors in consequence of whose death a benefit under the policy shall become payable then (in default of and subject to any appointment as aforesaid) that beneficiary’s share of the Trust Fund shall be held upon trust for the legal personal representatives of such one of the Settlors.”
It is that proviso which has given rise to the problem which it is sought to redress on this application.
9 3.8 Segment V contains yet another proviso, which is in the following terms:
“PROVIDED ALWAYS that any benefit which shall become payable under the policy in consequence of the death of the first to die of the Settlors shall be held by the Trustee upon trust for the absolute benefit of the survivor of the Settlors and any benefit which shall become payable otherwise than in consequence of the death of either or both of the Settlors shall be held by the Trustee upon trust for the absolute benefit of the Settlors in equal shares.”
10 3.9 Clause 2 deals with the appointment of new or additional trustees, such power being reposed in the Settlors or the survivor and, after the death of the survivor, in a nominated person, N, whose name was inserted in manuscript in the trust document.
2 4.1 The father and the mother had five children: C, who is named in segment III of clause 1 of the trust document; D, who is the second defendant in these proceedings and is also named in segment III of the trust document; A; B; and E. E died on 27th November, 2008. He was not married and he had no children. The evidence is that his estate remains unadministered, which I understand to mean that representation has not been raised to his estate.
3 4.2 The father died on 7th February, 1998. He was survived by the mother. The power of appointment contained in the trust document has not been exercised. The evidence before the Court, in the form of a medical report of a Consultant Psychiatrist, is that the mother has a diagnosis of dementia and that, as a result, she does not have the capacity to understand the problem which these proceedings are intended to redress and the solution proposed. Her lack of capacity is likely to remain permanent. Accordingly, I think it is reasonable to infer that the power of appointment will never be exercised.
4 4.3 C died at the age of 42 on 29th October, 2003. He was survived by his widow, the plaintiff, and by two children, who are now aged 11 and just under 9. C died intestate and letters of administration to his estate have been extracted by the plaintiff.
5 4.4 During the lifetime of C, the premiums payable under the policy were discharged by C and D in equal shares, as had been the intention when the policy was taken out. Since the death of C the premiums have been discharged by D and the plaintiff in equal shares. It has been a source of hardship to the plaintiff to bear a half share of the yearly premium.
6 4.5 After the death of C, the plaintiff and her then legal adviser sought to clarify the ultimate destination of the 50% of the proceeds of the policy opposite C’s name in segment III of clause 1 of the trust document. The proceeds of the policy will become payable on the death of the mother. The evidence before the Court indicates that from the outset in 1997 the intention of the parties was that C and D would fund the premiums equally and that they would become entitled to the proceeds of the policy equally in due course. However, following inquiries in the first half of 2004, Irish Life Assurance Plc. (Irish Life), the successor of Irish Progressive, on the basis of external legal advice, indicated that, under the terms of the trust document, where a beneficiary predeceased a settlor, that beneficiary’s share “reverts to the estate of the Settlor”. Therefore, the position adopted was that the 50% of the trust fund opposite the name of C in segment III has reverted to the surviving settlor, the mother, or, more correctly, her estate. The definitive position of Irish Life was that on the death of the mother that 50% of the proceeds of the policy will go to a trustee appointed by the nominee referred to in clause 2 of the trust document upon trust for the estate of the mother.
7 4.6 The problem, accordingly, as identified in the middle of 2004 was that, in default of appointment, 50% of the proceeds of the policy would go to the estate of the mother on her death and would not go to the plaintiff and her two children, who are entitled to the estate of C on his death intestate. From mid-2004 onwards various solutions to rectify the problem were canvassed and it appears from the documentation before the Court that the mother was agreeable to “amend” the trust document so that the 50% share which it was understood would go to C could go to his estate in due course. I do not consider it necessary or appropriate to comment on the various advices given by lawyers and accountants for the various parties involved in relation to the solution of the problem. However, it is necessary that I should attempt to construe the trust document in the light of the events which have happened and, in particular, to identify the ultimate destination of the proceeds of the policy. Before doing so, I propose to outline how the arrangement proposed by the plaintiff is designed to rectify the problem.
2 5.1 It is proposed that, with the approval of the Court, clause 1 of the trust document be replaced by a provision which embodies the following variations:
(a) in segment I the insertion of the words “the spouses of the children of the Settlors” between the class comprising children and remoter issue and the class comprising parents, brothers and sisters, etc.;
(b) that there be inserted in segment III after the name of C “or the personal representatives or estate of C” and after the name of D “or the personal representatives or estate of D”.
(c) that there be deleted from segment V the words “survivor of the Settlors” and that there be substituted therefor the words “estate of the deceased beneficiary”.
3 5.2 The following persons have assented in writing to the proposed variations:
(a) the plaintiff on her own behalf and on behalf of her infant children;
(b) D;
(c) B, who is prepared to assent on behalf of the mother, as well as on her own behalf; and
(d) A.
Both B and D have sworn affidavits in support of the plaintiff’s application and have confirmed the veracity of the facts put before the Court.
4 5.3 What is not evidentially clear is who would become beneficially entitled to 50% of the proceeds of the policy in the event that it formed part of the estate of the mother following her death, although I note that the plaintiff has averred in her affidavit that “all non-minor family beneficiaries of [the mother’s] estate” are parties to the arrangement, and counsel in his submissions referred to a will. In other words, the evidence does not establish whether the mother will die testate and, if so, who will be the beneficiaries of her estate under her will, or, alternatively, whether she will die intestate. If the mother dies intestate, on the evidence before the Court, her estate will devolve on her children, B, D, and A as to one fourth each and the remaining one fourth will devolve on the children of C equally, assuming all of those persons are alive at the date of her death. However, even if the family members of the mother are aware that she made a will and its terms are known, an issue must arise as to whether it could be definitively determined that it will be the last will and testament of the mother, and whether the beneficiaries thereunder are identifiable at this point in time.
2 6.1 The mother, as surviving settlor, even if she had the capacity to do so and wished to do so, could not make an appointment under the power of appointment contained in segment I of clause 1 in favour of the plaintiff, because the plaintiff does not come within any of the classes of beneficiaries in whose favour such an appointment may be made. The inclusion of the words “the spouses of the children of the Settlors”, as proposed under the arrangement, would certainly empower the mother, as the surviving settlor, to exercise the power of appointment in favour of the plaintiff. However, as I understand it, because of her lack of capacity, the mother is no longer in a position to exercise the power of appointment. The power of appointment cannot be exercised, revoked or interfered with in any way after the death of the mother. Therefore, the inclusion of “the spouses of the children of the Settlors” as a class in favour of whom the power of appointment may be exercised achieves nothing.
3 6.2 As regards the default position, the inclusion of the respective personal representatives and estates of C and D as regards the 50% of the trust fund to which each is entitled under the default provision is definitely a meaningful variation. Moreover, it seems to represent what was the intention of the settlors and of C and D from the outset and would recognise that C and, since his death, his estate and D have equally discharged the premiums due under the policy from the outset.
4 6.3 Under the arrangement as presented to the Court no amendment is proposed to segment IV. As to its proper construction, the first question which arises is the identity of “any of the said beneficiaries”. It must mean more than a potential beneficiary because the purpose of the proviso is to deal with “that beneficiary’s share”. Looking at clause 1 as a whole, I would construe “beneficiaries” as including not only the default beneficiaries named in segment III, but also beneficiaries as a result of the exercise of an appointment under Segment I. What I cannot understand is why there should be provision that the share of a beneficiary who predeceased the surviving settlor should be held on trust for the personal representative of the surviving settlor in the circumstances which were intended to prevail, and have prevailed, in this case, namely, that the policy was to be funded by the named default beneficiaries, C and D.
5 6.4 There are two distinct scenarios covered by the proviso in segment V. It seems to me that neither has arisen, nor can arise, in the events which have happened. The first limb relates to “any benefit which has become payable under the policy in consequence of the death of the first to die of the Settlors”. As I understand it, under the policy no benefit arose on the death of the first to die, that is to say, the father. Accordingly, it seems to me that the variation proposed to the first limb of segment V is unnecessary. In relation to the second limb, it relates to “any benefit which shall become payable otherwise than in consequence of the death of either or both of the Settlors”. Again, as I understand the position, the only benefit which becomes payable under the policy is the death benefit which arises on the last death, that is to say, in the events which have happened, the death of the mother.
6 6.5 The objective of the variations proposed to clause 1 is to ensure that, on the death of the mother, 50% of the proceeds of the policy will go to the plaintiff to be distributed as part of the estate of C in accordance with the provisions of the Succession Act 1965. I am doubtful as to whether the amendments which have been assented to in writing by the plaintiff, B, D and A, will achieve that objective. As I have indicated earlier, I do not think that the amendment proposed to segment I advances matters at all. The amendment proposed to segment III, if it was not inconsistent with any other provision of clause 1 as varied, would certainly achieve the objective. However, it seems to me that if the arrangement as proposed was approved by the Court, there would be an inconsistency between segment III, as varied, and segment IV. As I have already indicated the variation to segment V is superfluous, because neither limb of that proviso has any application. What I do think would achieve the objective of the assenting parties would be the proposed variation of segment III coupled with a variation of segment IV which substituted for the words “of such one of the Settlors” at the end of that segment the following words: “of such beneficiary”.
2 7.1 As I have stated in outlining the provisions of s. 24, on an application under s. 24 the Court has two options, namely, to make an order approving the arrangement or, alternatively, to refuse to make such an order. In my view, it is not open to the Court to approve of the arrangement subject to alteration or modification. However, I believe that it is open to the Court to permit an applicant to apply to amend an application. With a view to ensuring that there is no unnecessary wastage or escalation of legal costs in this matter, I propose to consider, in so far as it is possible to do so, whether, if the arrangement which the plaintiff seeks to have approved achieved the object which she seeks to achieve, the arrangement would be an appropriate arrangement for the Court to approve of under s. 24. However, for reasons which will be obvious, the views expressed cannot be definitive.
3 7.2 In her capacity as personal representative of C, I consider that the plaintiff is an appropriate person to bring an application under s. 24.
4 7.3 At the hearing of the application, counsel for the plaintiff made it clear that the “relevant person” for whose benefit the plaintiff is seeking to have the arrangement approved is the mother. That is not specified in the application, as required by subs. (1) of s. 24. Where the special summons procedure is utilised in accordance with the Rules in relation to applications under s. 24, I would suggest that the special endorsement of claim on the special summons should, in the narrative, specify the relevant person. In this case, the special summons would require to be amended to specify the “relevant person”.
5 7.4 The difficult issue in this matter is whether a variation of the trust created by the trust document to provide that 50% of the proceeds of the policy will be held on trust after the death of the mother for the estate of C can be shown to be for the benefit of the mother. In essence, the submission made by counsel for the plaintiff was that the arrangement is for the benefit of the mother, in that it gives effect to the intentions of the father and the mother in executing the declaration of trust and it reverses the unintended difficult consequence to which the trust document in its existing form gives rise. In other words, the plaintiff’s position is that the mother was prepared to rectify the trust document if she could, but in the current circumstances she does not have the capacity to do so. I express no view on whether, while she had capacity, she could have done so validly and it is not to be inferred that I consider she could have.
6 7.5 Counsel for the plaintiff referred the Court to one authority of the High Court of England and Wales in support of the submission that the proposed arrangement is for the benefit of the mother within the meaning of s.24: In re C.L. [1969] 1 Ch. 587. Before considering the decision of Cross J. in the C.L. case it is instructive to consider the jurisdiction conferred on the English courts by the Variation of Trusts Act 1958 as outlined in Snell’s Equity (31st Ed., 2005). In dealing with the concept of “benefit”, the editors state (at p. 662):
“The court cannot approve an arrangement on behalf of any person ‘unless the carrying out thereof would be for the benefit of that person’,i.e. in all reasonable circumstances, though not necessarily in every remote contingency.
The court may ‘have to take a broad view, but not a galloping, gambling view’. …
‘Benefit’ is not confined to financial benefit,e.g. where the beneficiary is an irresponsible minor. Thus a provision forfeiting benefits on ‘practising Roman Catholicism’ has been removed. It may also be a benefit to a mentally incapable person to give away his property where the gift is one which he would have made if of sound mind. But it is not for A’s benefit to take from him property mistakenly given to him and give it to B, even if B is a member of the same family.”
As authority for the proposition in the last sentence, the editors citeIn re Tinker’s Settlement [1960] 1 W.L.R. 1011. As authority for the proposition in the second last sentence, they cite the C.L. case, in which the Tinker case was considered.
7 7.6 In the C.L. case (at p. 598) Cross J. quoted from the headnote of the report of the Tinker case, which summarised the facts and the decision as follows:
“By a settlement dated April 4, 1951, it was provided that certain funds should be held by the trustees for the settlor’s son and daughter in equal shares. Clause 1(3) provided that if the son attained the age of 30, he should become absolutely entitled to his share, and clause 1(5) that if he should die before attaining that age, then his share was to accrue to the daughter’s share. The settlement provided that if the daughter should attain the age of 30 the income of her share should be payable to her during her life and after her death the capital was to be held on trust for her children. The settlor applied to the court under section 1 of the Variation of Trusts Act, 1958 for approval on behalf of unborn persons interested in the settled funds of a variation of the trusts of the son’s share whereby, should the son die before attaining the age of 30, leaving a child or children who attained the age of 21 one-half of the son’s share should be held on trust for such child or children, and that clause 1(5) should be made subject to a new clause to that effect. At the date of these proceedings, the son and daughter were both unmarried and under 30 years of age:- Held, that the court could not sanction the proposed variation, which was, in fact, a claim for rectification of the settlement, unless it was satisfied that it would be for the benefit of the unborn children of the daughter; that this proposal to give away half of that to which those children would be entitled if the son died under 30 years of age could not possibly be said to be for their benefit; and that, therefore, the variation would not be approved.”
Cross J. then quoted from the judgment of Russell J. in theTinker case which related to the point, which was as follows:
“It is quite clear that I must be satisfied before I sanction that arrangement, which involves half of the son’s half being given, so to speak, in the particular event to his children and not over to the daughter’s family, that such an arrangement is beneficial to the unborn children of the daughter. It seems to me that it is about one of the thinnest and weakest claims for rectification that I have seen … and I cannot think I would be benefiting the daughter’s children if I gave away half of that which they would come into if the son dies under 30. [Counsel for the settlor applicant] has said that one can look at this sort of thing in two ways and ultimately combine the two. First, that this is a sensible and fair thing to do because somebody has blundered – somebody has forgotten about the son’s children – and it would seem very hard that this half of this substantial settlement should go away from his children to his sister and her children, and, secondly, that it would in a broad sense be beneficial to the sister’s children as members of this whole family. I cannot apply the jurisdiction under the Variation of Trusts Act in that broad way. Although it may very well be that one can throw that kind of consideration into the scale in order to increase a financial benefit which is already established, yet one cannot regard it as a benefit in its own right. I would be only too pleased if I were able so to hold, but, having regard to the type of claim for rectification which is adumbrated, I do not find myself able to approve a compromise or arrangement or variation under the Act as is sought …”
8 7.7 Cross J. stated that he agreed entirely with the decision in the Tinker case, commenting that obviously one could not say that the daughter’s children, if they had been in existence and of full age, would in all probability have consented to the proposed change in the settlement. However, he went on to distinguish the decision in the Tinker case, and I will return to the relevant passage, having set out the substantive issue in the C.L. case.
9 7.8 In the C.L. case the substantive issue under the Act of 1958 concerned the estate of a widow who was subject to the jurisdiction of the Court of Protection. The estate comprised, inter alia, a protected life interest in a trust fund settled by her husband, which, on her death, would be added to a fund settled by him on their two adopted daughters, and in certain events, to the daughters’ children, with an ultimate trust to the widow. The adopted daughters sought approval of an arrangement by which the widow gave up for no consideration her protected life interest in the settlement made to her and her contingent interest in remainder in the settlement, in each case in favour of the adopted daughters. In relation to the factual situation, Cross J. commented on the widow’s assets and her income and noted that she had to pay very large sums by way of income tax and surtax, but even so her spending income was substantially in excess of her requirements. He also noted that the ultimate trust in her favour was highly unlikely ever to take effect. As regards the effect of the proposed variations, he stated (at p. 593):
“If the protected life interest of the patient in the settlement is got rid of, there will be a great saving in estate duty if she lives for a few more years and, having regard to the income tax and surtax which she has to pay, the reduction in her spending income will be trifling – less than £500 a year. If she were capable of managing her affairs, it is almost certain that her legal advisers would advise her to consent to the arrangement for the benefit of her adopted children and highly probable that she would accept that advice.”
10 7.9 Returning to the manner in which Cross J. distinguished the Tinker case, he stated (at p. 599):
“But if and so far as the judge was saying that there must always be some element of financial advantage to the infant or otherwise incapable person in question before an arrangement can be said to be for his benefit, I think that he went too far. Suppose a young man of 18 to be entitled to a great fortune; suppose some comparatively small part of it to have come to him by reason of some such blunder in drafting as occurred in theTinker case; suppose the persons to whom that part ought to have come to be in straitened circumstances; and suppose finally that the young man feels a strong moral obligation to right what he considers to be a wrong as soon as possible and says to his trustees ‘Cannot something be done for these cousins of mine now? Must I really wait until I am 21?’ In such circumstances, the trustees could properly pay part of the trust fund to the cousins as an advancement for the young man’s benefit (see In re Clore’s Settlement Trusts [ [1966] 2 All ER272]), and if it was more convenient to achieve the desired result by an arrangement under the Variation of Trusts Act, I see no reason why the carrying out of the arrangement could not be considered as being for his benefit although it was financially to his detriment. It would be odd if the word ‘benefit’ had a narrower meaning in the context of a variation than it has in the context of an advancement. For these reasons I propose to make an order under section 1(3) of the Variation of Trusts Act in this case.”
11 7.10 Of course, under s. 24 of the Act of 2009, as I have already outlined, subs. (5) envisages a benefit being “financial or otherwise”. However, by the combined operation of subss. (4) and (5), the Court must have regard to any benefit or detriment, financial or otherwise, that may accrue to the relevant person and any other relevant person. Even if an arrangement which would have the effect which the plaintiff seeks to bring about were before the Court, there would be a difficulty in relation to making a determination under s. 24 because, on the evidence, it is not possible to determine to whose detriment it would be if such arrangement were approved of, because it is not clear whether the mother’s personal representative will be distributing her estate in accordance with a will or on an intestacy. If it were to be distributed on an intestacy, the children of the plaintiff would be relevant persons, to whom a benefit would accrue under the arrangement, as they would receive a greater share of the trust funds on a distribution on the intestacy of their father, C, than they would on the intestacy of their grandmother, the mother. As I have already indicated, there is no evidence as to who the beneficiaries of the mother’s estate would be if she died testate.
2 8.1 It is not possible to make a determination in accordance with subs. (4)(a) of s. 24 for the reasons which have been explored earlier in this judgment. The primary reason is that I have come to the conclusion that the variations proposed to clause 1 of the trust document will not have the intended effect. Apart from that, on the basis of the evidence before the Court, it is not possible to determine to whose detriment it would be to vary the trust document to provide that 50% of the trust funds would not pass to the legal personal representative of the mother when the policy matures on her death. The endorsement on the special summons needs to be amended to include the identification of the relevant person, whom I understand to be the mother, and to specify the basis on which she is a “relevant person” within the meaning of s. 23. It is not possible to determine whether or not an arrangement which would have the intended effect, if it were before the Court, would be for the benefit of the mother within the meaning of s. 24.
3 8.2 However, I do not propose to make a determination under subs. (4)(b) of s. 24 refusing to approve the arrangement at this juncture, so as to afford the plaintiff’s legal advisers an opportunity to consider whether they wish to apply to amend the application.
2 9.1 I have some further observations in relation to this application.
3 9.2 The first relates to the incapacity of the mother and the fact that she is not a ward of court and does not have a committee. As I read Part 5 of the Act of 2009, it is intended that the High Court should have jurisdiction where an adult is incapable of assenting to an arrangement by reason of absence of mental capacity, notwithstanding that the adult has not been taken into wardship.
4 9.3 Secondly, the Oireachtas gave the Revenue Commissioners an important role in relation to s. 24 applications. In this case, while I am satisfied that the plaintiff gave notice to the Revenue Commissioners in accordance with the requirements of s. 24, there is no evidence before the Court of the attitude of the Revenue Commissioners, although counsel informed the Court that his instructing solicitor was aware from a telephone conversation with an official of the Revenue Commissioners that they had received the notice and that they had no formal objection to the application. However, it seems to me that on applications under s. 24 the Revenue Commissioners should apprise the Court in some way, although not necessarily by appearing on the application, of their attitude to the application. The solicitor for the plaintiff should furnish the Revenue Commissioners with a copy of this judgment.
5 9.4 Finally, in the special endorsement of claim an order has been sought providing that the mother shall cease to be a trustee of the trust established by the trust document and substituting B as trustee in her place. However, I note that in the final affidavit sworn in the matter by D, it is suggested that the person nominated to appoint new trustees in clause 2 of the trust document, N, be appointed a trustee with immediate effect. The plaintiff will have to clarify for the Court which order is sought. An affidavit of fitness of the proposed new trustee sworn by an independent person should be filed.
Aberconway’s Settlement Trusts
Re [1953] Ch 647 Court of Appeal (Evershed MR, Romer LJ, Denning LJ dissenting)
Evershed MR:
‘ … in my judgement, neither s51 of the Act of 1882, nor s106 of the Act of 1925 (which has replaced it) should be taken as operating to render void directions in a settlement operating to determine other provisions in the settlement which are neither for the benefit (properly speaking) of any cestui que trust, nor even, in strictness, ancillary to the enjoyment by a cestui que trust of the trust property.
In this case, the provisions of the garden settlement, during the prescribed period of what I have called the special trust, may no doubt be regarded as being indirectly for the benefit of the tenant for life; at any rate, so long as the tenant for life happens to enjoy the amenities of a good garden or happens to be an amateur of horticulture. But, it is important to bear in mind that the application of the income is wholly in the discretion of the trustees.
This trust is a trust for a very special and particular object, not, as I assume, a charitable object, but a public object of a somewhat similar character. Provisions, therefore, which have the effect of putting an end to it, seem to me to be very far removed from provisions which have the effect of putting an end to a trust under which a cestui que trust received some independent benefit until he exercised a statutory power. My conclusion, therefore … is that the provision putting an end to the trustees’ discretionary power to apply the income in furtherance of this very special and “quasi-public” trust, is not a deterrent, it is not a provision tending to induce the tenant for life not to execute any of his statutory powers of the kind contemplated by paragraph (b) of s106(1) and, therefore, no part of the relevant terms of this garden settlement ought to be deemed to be void within the meaning of that section. The result is … that this settlement should take effect according to its terms … and the £20,000 must now be held on the trusts of
the Prestatyn settlement.’
Alefounder’s Will Trusts, Re
Ashbury J:
‘The question is whether the defendant Alefounder, on barring his entail, can make a valid title without first having a vesting deed.
He … holds the absolute legal fee simple in trust for himself as equitable tenant in tail with remainders
over but without any overriding trusts or incumbrances, and not unnaturally wants to know whether if he bars his equitable entail and so puts an end to the settlement, he can make a valid disposition of the property without first obtaining a vesting deed … The difficulty is caused by s13 of the Settled Land Act 1925 …
It has, however, been rightly contended that on its true construction, this section cannot have been
intended to prevent a valid disposition in such a case as the present – namely where the defendant is estate owner in law and on barring his equitable entail, will become equitable owner in unencumbered fee simple in possession.
This contention is right for the following combined reasons. In the first place, on the disentail in this case, the land will cease to be settled land and the settlement will come to an end … Secondly, the purported disposition referred to in s13 means and only means a disposition under the Settled Land Act 1925: see sl 12(2).
For these reasons, taken together, there will be a declaration that, on the defendant Alefounder disentailing his equitable estate tail, and so becoming entitled to the unincumbered legal and equitable fee simple in possession free from any settlement or trust, he can dispose of the property without regard to s13 and without previously obtaining a vesting deed.’
Bridgett & Hayes’ Contract, Re
[1928] Ch 163 Chancery Division (Romer J)
Romer J:
‘The point still remains as to whether s22(1) applies to the present case, it being conceded on both sides that on the death of this lady, the settlement came to an end … Now, before any one can go to the Court of Probate and get probate specially limited to the settled land granted to him, he must be in a position to say to the court that he is to be deemed to have been appointed special executor of this land, because at the death of the testator, he was trustee of the settlement thereof. But, in my opinion, he is not ina position to make that statement if the settlement comes to an end the moment the testator dies. It is to be observed that the sub-section does not refer to the persons who immediately before the death of the testator were the trustees of the settlement, but to the persons who at his death are the trustees of the settlement.
The words “persons who are at his death the trustees of the settlement” can not to my mind be persons who are trustees notwithstanding his death, especially when it is realised that the section is dealing with the testator’s will, which comes into operation only when he is dead.
For these reasons, I think this sub-section does not apply in a case like the present where, upon the death of the testatrix in question, the settlement existing up to that date comes to an end.’
Frewen, Re
[1926] Ch 580 Chancery Division (Lawrence J)
Lawrence J:
‘It is no doubt true to say that in substance Thomas Frewen is in the same position as he would have been, had the whole of the income of the settled land been made payable to him during his life, subject only to an overriding trust to accumulate part of such income; but, in my opinion, the court is not at liberty in a case like the present to ignore the form of the trust. Here there is no overriding trust accumulation: Thomas Frewen is given a definite portion of the income, while the remaining portion is directed to be held and dealt with as capital money arising under the Settled Land Acts. In my judgement, there is a substantial distinction between a case where a person is entitled to the whole income of settled land subject to an overriding trust for accumulation of income and a case where a person is entitled only to a certain portion of the income and the remainder of the income is to be held and dealt with as capital money. In the latter case, it could not, in my opinion, properly be said that the person was entitled to the whole of the income of the settled land subject to a trust for the accumulation of income, as he never was or could become entitled to that portion of the income which was directed to be held as capital. It is obvious that the settlement was framed with the express object of preventing Thomas Frewen from being or having the powers of a tenant for life, which powers were expressly conferred upon the trustees of the settlement.
In the result, I hold that Thomas Frewen is not a person having the powers of a tenant for life under the Settled Land Act 1925 and that the applicants, as the trustees of the settlement, are the persons having those powers.’
Mayo, Re
[1943] Ch 302 Chancery Division (Simonds J)
Simonds J:
‘The result of the residuary devise, having regard to the provisions of Section 36 of the Settled Land Act 1925 was that the property was held on trust for sale, but, super added to that trust, there is a statutory power of postponement [LPA s25( I): “A power to postpone sale shall, in the case of every trust for sale of land, be implied unless a contrary intention appears.”]. It appears to me that the judicial discretion conferred by s30 of the Law of Property Act 1925 [for text see Re Buchanan-Wollaston’ s Conveyance, supra, this chapter] must be exercised in the same way as the discretion which is exercisable by the court in the case of an instrument containing an express trust for sale. The trust for sale will prevail, unless all three trustees agree in exercising the power to postpone … Here, there is no suggestion of mala tides on the part of the testator’s son, who claims that the sale should not be postponed. If that were established, the position would be different, but in the present case I think that the son is reasonable in asking for the property to be sold I must direct the trustees to concur with the testator’s son in taking all necessary steps for the sale of the property.’
Morgan’s Lease
Re [1972] Ch 1 Chancery Division (Ungoed-Thomas J)
·
‘I come now to the third issue whether s110 of the Settled Land Act 1925 only applies if the purchaser knows that the other party to the transaction is a tenant for life. The landlord’s submission was founded on
Weston v Henshaw [1950) Ch 510. … the case of Mogridge v Clapp [1892) 3 Ch 382 unfortunately was not brought to Danckwerts J’s notice.
… the Court of Appeal … seems to me to treat it as self-evident that a person dealing witha life tenant
without knowing that he was a life tenant would be entitled to rely on sl 10 of the Settled Land Act 1925; and with the greatest respect for the decision in Weston v Henshaw, that is the conclusion to whichI would come independently of authority. There is, in the section, no express provision limiting its benefit toa purchaser who knows that the person with whom he is dealing is a tenant for life. On its face, it reads as free of limitation and as applicable to a person without such knowledge as to a person who has it. There isa limitation, namely, that the purchaser must act in good faith: but, that limitation reads as applicable toa purchaser with such knowledge as without. So, despite the insertion of the limitation of good faith on the part of the purchaser, there is no insertion of the limitation for which the landlords contend. Thus, my conclusion is that sl 10 applies whether or not the purchaser knows that the other party to the transaction is tenant for life.’
Ogle’s Settled Estate, Re
[1927] 1 Ch 229 Chancery Division (Romer J)
‘In some parts of the Act no doubt “settlement” means merely the document or documents creating the settlement: see, for example, sl( 4), (47), and (64). But in general a settlement, for the purpose of the Act, isa state of affairs in relation to certain land, brought about, or deemed to have been brought about, by one or more documents, the particular state of affairs being one or more of those specified in sl(l)(i) to (v). A document may, therefore, create more that one settlement. If by means of one and the same document, Balckacre and Whiteacre stand limited in trust for A and his children in strict succession, and forB and his children in strict succession respectively, there are two settlements.’
Parker’s Settled Estates, Re
[1928] Ch 247 Chancery Division (Romer J)
‘ … that the words “trust for sale”, when used in reference to land that is subject to a prior equitable interest, are not confined to cases where that equitable interest can be overreached by the trustees. It may be said that in that case, no effect is given to the word ‘binding’ … and … I should prefer to treat the word as mere surplusage … rather than to give it a meaning that would exclude from being trusts for sale innumerable trusts which are indubitably trusts for sale, as that phrase has always been understood by lawyers hitherto and which would either exclude them without any apparent reason from a very large number of the general provisions of the Acts relating to “trusts for sale” or would necessitate the court holding that the context required some other meaning to be attributed to that expression.
There is, therefore, in my opinion, a trust for sale in the present case affecting the legal estate in fee simple vested in the trustees of the 1924 deed. But, is there a trust for sale that brings the present case within the exception to sl of the Settled Land Act introduced by the new sub-section 7? In my opinion, there is not. It is, I think, reasonably clear that sub-section only applies where “the land” that would otherwise be the subject of a settlement under sub-section I, is held upon trust for sale.
(Here, however, because there was an outstanding legal term of 1,000 years to secure portions) the whole legal estate which is the subject-matter of the settlement is not, therefore, subjected to a trust for sale and, in my opinion, sub-section 7 has no application to the case.’
Walker v Hall
Dillon LJ:
‘ The trust for sale imposed by statute as a result of the transfer of the property into joint names, has
not come to an end, but will inevitably continue until either the property is sold in execution of the trust for sale, or one party, by buying the other out, becomes solely and absolutely entitled to the property in equity.
A fortiori the beneficial interests of both parties established by their contributions to the original purchase of the property, did not automatically cease and should not be quantified as fixed sums on the cesser of cohabitation …
Mrs Walker’s interest in the house must be valued at the present time. Where, as in this case, a house, intended to be the family home of a man and woman who were living together as if man and wife, had been conveyed into their joint names it is relatively easy to conclude that the reason why the house was acquired in joint names was that the parties intended that they should each have a beneficial interest in the house.
If there is no further evidence to indicate the extent of those interests, the conclusion should be that equity follows the law and the parties holding the legal estate as joint tenants are entitled beneficially as joint tenants.
But it has been consistently held that where purchase money for property acquired by two or more persons in their joint names has been provided by those persons in unequal amounts, they will be beneficially entitled as between themselves in the proportions in which they have provided the purchase money. That is the basic doctrine of the resulting trust.
Therefore, it is not open to the court, in the absence of specific evidence of the parties’ intentions, to hold that the house belongs beneficially to Mr H and Mrs W in equal shares, notwithstanding their unequal contributions to the purchase price, simply because it was bought to be their family home and they intended that their relationship should last for life.
Equally it is not open to the court to ‘top up’ Mrs W’s share beyond what it would be on the mere basis of her financial contribution, on some broad notion of what would be fair simply because the house was bought as a family home.
The judge’s proportion of one quarter to Mrs Wand three quarters to Mr Hare in principle right … ‘
Wheelwright v Walker (No 1)
(1883) 23 Ch D 752 Chancery Division (Pearson J); and Wheelwright’s Trusts, Re; Wheelwright v Walker (No 2) (1883) 31 WR 912 Chancery Division (Kay J)
. Pearson J:
‘So far as I can see, there is no restriction whatever in the Act on the power of the tenant for life to sell. There is nothing that I can see in the Act to enable the court to restrain him from selling, whether he desires to sell because he is in debt and wishes to increase his income; or whether he desires to sell from mere unwillingness to take the trouble involved in the management of landed property; or whether he acts from worse motives, as from mere caprice or whim, or because he is desirous of doing that which he knows would be very disagreeable to those who expect to succeed him at his death. There is not, so far as I can see, any power either in the court or in trustees to interfere with his powers of sale I find nothing
whatever in the Act which gives any person entitled in remainder any power of any sort or description to interfere with the right of the tenant for life to sell. So far as I can see, the object of the Act is to enable the tenant for life of real estate comprised in a settlement to take it out of the settlement and to substitute for it ex mero motu, the value of it in pounds, shillings and pence.
… the tenant for life has himself power to sell the fee simple and inheritance of this property if he should comply with the provisions of the Act, but I also think that he has been proceeding, up to the present moment, precipitately, because there are no trustees to whom he can give notice and, therefore, I shall grant him an injunction to restrain him from selling or offering for sale the property until such time as there shall have been appointed proper trustees of the will for the purposes of the Act, to whom notice can be given and until due notice shall have been given to them of the intention to sell.’