Re Herbert, Herbert v Bicester (Lord) and Others

 

Re Herbert, Herbert v Bicester (Lord) and Others

TRUSTS: CIVIL PROCEDURE: ADMINISTRATIVE: LAND; Other Land

CHANCERY DIVISION

VAISEY J

25, 29, 30, 31 JANUARY 1946

Settlements – Settled land – Statutory powers of tenant for life – Limitation against exercise of powers – Bequest of fund upon trust to apply part of income, at

trustee’s discretion, for outgoings of real estate settled under same will – Income not so required to be paid to tenant for life of the settled land – Gift over of

whole fund on sale of settled land – Settled land sold under statutory powers – Gift over of fund void – Tenant for life to continue to receive income – Settled

Land Act, 1925 (c 18), s 106.

By his will the testator settled B manor estate. He then gave to his trustees the sum of £50,000, defined as “the maintenance fund,” upon trust to apply the

income thereof as the trustees should think fit towards the payment of certain outgoings of B manor estate and “to pay any part of the said income not in their

opinion required for the aforesaid purpose” to the tenant for life. On the sale of B manor house, or on the expiration of a period limited so as to avoid

infringement of the rule against perpetuity (whichever should be the earlier date), the maintenance fund was to fall into the residue, which was disposed of

under the will. The testator died in 1939. The tenant for life sold B manor estate under the powers conferred on him by the Settled Land Act, 1925. The

question to be determined was whether the income of the maintenance fund continued to be payable to the tenant for life, by reason of sect 106 of the 1925

Act, or whether the fund had fallen into the testator’s residuary estate according to the expressed intention of the testator that it should do so:—

Held – Since the provision tended to induce the tenant for life not to exercise his statutory power of sale, the Settled Land Act, 1925, s 106, applied. The land

having already been sold, the income of the fund would continue to be payable to the tenant for life during the remainder of his life.

Re Ames, Ames v Ames followed.

Notes

The provisions of the Settled Land Act, 1925, s 106, making void any disposition tending to induce the tenant for life to abstain from exercising his statutory

powers, is difficult to construe, in view of the vagueness of the word “tending” which is not a term of art. Vaisey J, finds that there is no distinction between

the provision for the payment of any part of the income not in the opinion of the trustees “required” to pay outgoings, and the provision in Re Ames for the

payment of “surplus” and accordingly, following Re Ames, the whole of the income continues payable to the tenant for life, by virtue of sect 106, in frustration

of the intention of the testator.

It may be pointed out that in the headnote to Re Ames the word “balance” is used, whereas in the will the word was “surplus.” Vaisey J, however, holds

that there is no material difference in the two words.

As to Prohibition against Exercise of Statutory Powers, see Halsbury, Hailsham Edn, Vol 29, pp 697, 698, para 976; and for Cases, see Digest, Vol 40, pp

743, 744, Nos 2736–2752.

Cases referred to in judgment

Re Ames, Ames v Ames [1893] 2 Ch 479, 40 Digest 744, 2746, 62 LJCh 685, 68 LT 787.

Re Smith, Grose-Smith v Bridger [1899] 1 Ch 331, 40 Digest 744, 2747, 68 LJCh 198, 80 LT 218.

Re Patten, Westminster Bank v Carlyon [1929] 2 Ch 276, Digest Supp, 98 LJCh 419, 141 LT 295.

Re Simpson, Clarke v Simpson [1913] 1 Ch 277, 40 Digest 752, 2819, 82 LJCh 169, 108 LT 317.

Adjourned Summons

Adjourned Summons to determine whether, in the events which had happened, a provision in the will of Sir Sydney Herbert was void by reason of the Settled

Land Act, 1925, s 106. The facts and the relevant provisions of the will are fully set out in the judgment.

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Preamble

H O Danckwerts for the plaintiff, the tenant for life of the settled land.

Wilfrid Hunt for the tenant for life of the residuary estate.

J A Wolfe for the trustees.

31 January 1946. The following judgment was delivered.

VAISEY J. This case raises a question under the Settled Land Act, 1925, s 106, which is, for all practical purposes, identical with the Settled Land Act, 1882,

s 51, so that the decisions of the court under the last-mentioned section 􀂭 421􀀉 are equally applicable to the section now in force. The testator, Sir Sidney

Herbert, made his will on 8 December 1938. By cl 1 he appointed his cousin, Sir George Sidney Herbert, and Lord Bicester to be trustees for the purposes of

the Settled Land Act, 1925. After making dispositions to which I need not refer, he gave to his trustees the Boyton Manor estate in the county of Wilts, which

he defined by reference to the parishes in which that estate was situate, upon trust, in the first place, for Sir George Sidney Herbert, for life, with remainder to

his sons, in tail male, with remainder upon trust for the plaintiff, the Hon David Alexander Reginald Herbert, for life with divers remainders over. By cl 12 of

his will the testator gave to his trustees free of duty the sum of £50,000, which he defines as “the maintenance fund,” to be held upon the following trusts:

until the expiration of a period limited so as to avoid infringement of the rule against perpetuity, or until his house called Boyton Manor should be sold,

whichever should be the earlier date, which date is called “the date of termination,” upon trust first to apply such part of the income arising from the

maintenance fund as his trustees should think fit towards the payment of certain outgoings of the Boyton Manor estate, with power to apply part of the capital

of the maintenance fund for expenditure of a capital nature at their discretion. Then:

‘… to pay any part of the said income not in their opinion required for the aforesaid purpose to the person for the time being having an interest in

possession under the trusts declared in cl. 11 hereof [i.e., the trusts affecting the Boyton Manor estate].’

As from the date of termination, the maintenance fund was to fall into and form part of the testator’s residuary estate. The residue was given upon trust

for conversion and upon further trusts to pay the income to the defendant, Lord Bicester, for life with other provisions to take effect after his death.

The testator died on 22 March 1939. His will was duly proved by Sir George Herbert and Lord Bicester. A vesting assent in favour of Sir George Sidney

Herbert was duly executed, but he, the first tenant for life under the settlement, died without issue, never having been married, on 30 January 1942. Thereupon

the limitation in favour of the plaintiff took effect so that the plaintiff is now the tenant for life in possession of the estate. A vesting assent in his favour has

been duly executed and the story concludes with the fact that the Boyton Manor estate has been sold by the plaintiff and is now represented by a sum of capital

money.

The question which arises is now not exactly as stated in the summons because the sale had not been effected at the date of the issue of the summons.

The question as it now presents itself is whether the Boyton Manor estate having now been sold by the plaintiff pursuant to the powers conferred on him under

the Settled Land Act, 1925, the income of the maintenance fund mentioned in cl 12 of the will continues to be payable to the plaintiff during the remainder of

his life, or whether, on the contrary, the maintenance fund has fallen into the testator’s residuary estate according to the expressed intention of the testator that

it should do so. There is no question of construction so far as the will is concerned. There can be no doubt that, according to what the estator wished, now that

the estate has been sold, the maintenance fund was intended and is expressly directed to fall into residue.

I have now to consider whether that intention has been frustrated and set aside by the terms of the Settled Land Act, 1925, s 106. Sect 106 provides:

‘(1) If in a … will … a provision is inserted (a) purporting or attempting, by way of direction, declaration, or otherwise, to forbid a tenant for life

… to exercise any power under this Act … or (b) attempting, or tending, or intended by a limitation, gift, or disposition of … real or … personal

property … to prohibit or prevent him [i.e., the tenant for life] from exercising, or to induce him to abstain from exercising, or to put him into a position

inconsistent with his exercising, 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 such power or right as aforesaid 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 or right, discharged from liability to determination or cesser by or

on his exercising the same.’

It will be observed that in this will all that is given to the tenant for life during the continuance of his ownership of the Boyton Manor estate is such part

of the 􀂭 422􀀉 income as is not, in the opinion of the trustees, required for the purpose of discharging outgoings, and so forth, and it has been argued before me

(and it is an argument to which, it seems to me, a good deal of weight ought to be attached) that as soon as the estate was sold there was no room for the

exercise of any opinion by the trustees, and that, therefore, the direction to pay the income to the person for the time being interested in the estate in possession

was something which could not, according to its terms, take effect. If the matter had been free from authority, and I were able to deal with it without regard to

previous decisions of the court, I should, I think, have been considerably influenced by that consideration

I was referred to certain decided cases, and in particular to Re Ames, Ames v Ames. The headnote, so far as it relates to the point which now falls to me to

decide, is not quite accurate:

‘Personal estate was bequeathed on trust to apply the income in keeping up a sea wall and ornamental grounds on settled real estate and on trust to

pay the balance of the income to the tenant for life of the real estate during lives in being and 21 years, with a proviso that, if the tenant for life should

become disentitled to the possession or income of the real estate, the settled personal estate should sink into the residue.’

It was held in that case by North J:

‘… that this proviso was void under the Settled Land Act, 1882, s.51, and that the tenant for life who had sold the real estate was still entitled to the

income of the personal estate.’

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The inaccuracy of the headnote consists in the reference to the word “balance” because the actual words of the will are these: first, there is the direction

to apply income in keeping up the sea wall and other matters connected with the settled estate, walks, drives, orchards, woods, and so forth, and then there is a

provision in these words:

‘And if in any year during the continuance of the aforesaid trust (which trust I declare shall be deemed to commence from the period of my death),

there shall be any surplus dividends unapplied to the purposes aforesaid or any of them, such surplus dividends shall at the expiration of every such year

be paid to the person who under or by virtue of the trusts and provisions of my said will and this or any other codicil or codicils thereto shall for the time

being be entitled to the possession or to the receipt of the rents and profits [of the settled property].’

[I am not sure that there is much difference between “balance” and “surplus”, but each of those words presupposes a primary expenditure which is first to

be brought into account before ever a balance or a surplus can be ascertained. While I think there is very little difference between “balance” in the headnote

and “surplus,” which appears in the words of the will itself, I am equally unable to see any real distinction between “balance,” “surplus” and “any part of the

… income not” in the opinion of the trustee “required.”] Each of those expressions seems to me to presuppose what I have called a primary expenditure, and

yet in Re Ames it was held by North J whose decision I should only distinguish if I could see adequate grounds for it, that, notwithstanding any such

consideration, sect 51 of the Act of 1882, corresponding, as I have said, with sect 106 of the Act of 1925, operated to frustrate the express intentions of the

testator.

Another case which bears upon the point is Re Smith, Grose-Smith v Bridger which differed from Re Ames chiefly in that the settlement of the personal

estate, with the proviso for the determination of the trusts in the case of a sale, was effected through another instrument from that which effected the settlement

of the estate. That having been done by the testator’s will, it was his widow who attempted to put a veto on the sale.

Dealing with the matter as best I can, and with the somewhat strange words with which the section opens, I find myself obliged to decide whether this

provision attempts or tends, or is intended, to have the deterrent effect which the section indicates. I am not sure that it attempts anything. I am not sure that it

is intended to do so, and it may have been the testator’s intention not so much to prevent a sale under the Act as to enable successive tenants for life to live in

the settled mansion house, or, at any rate, to assist them to do so. But, in view of the decisions in Re Ames and Re Smith I cannot avoid coming to the

conclusion that, whatever was intended by the words in question, it does tend to induce the tenant for life not to exercise his powers of sale under the 􀂭 423􀀉

Act. I have tried to discover some other Act of Parliament in which the word “tend” or “tending” is to be found. There may be many such, but I have not

succeeded in finding any. “Tending” is an extremely vague and an extremely wide word. Whatever other tendency the “disposition” may have had, in my

judgment it does incline towards inducement to a tenant for life not to sell the property if, in his discretion, he thinks proper to do so. It may well be that the

tenant for life would have sold in any event. It may be that this provision makes no difference to the decision which he would have reached. It may be that he

never thought about it. But the tendency of the provision seems to me, in the light of the two cases which I have mentioned, to be a tendency inclining

towards an inducement that the tenant for life should retain, and not sell, the settled property.

The decision of Romer J in Re Patten, Westminster Bank v Carlyon contains nothing which seems to me inconsistent with the conclusion at which I have

arrived. There are numerous other decisions, including that of Re Simpson, Clarke v Simpson, to which I do not propose specifically to refer.

The result is that, much as I should enjoy the mental exercise of attempting to distinguish this case from Re Ames and Re Smith, I do not think that any

such attempt on my part would be fruitful or justified, and that any distinction between this case and those cases would merely be to create confusion and

uncertainty. I am therefore, in my judgment, bound to answer the question which has been put to me by declaring that, the Boyton Manor estate having now

been sold pursuant to the powers conferred upon the plaintiff by the Settled Land Act, 1925, the income of the maintenance fund mentioned in cl 12 of the will

will continue to be payable to the plaintiff during the remainder of his life.

Declaration accordingly. Costs of all parties to be taxed as between solicitor and client paid out of the testator’s residuary trust fund.

Solicitors: Nicholl, Manisty, Few & Co (for the plaintiff and the trustees); Slaughter & May (for the tenant for life of the residuary estate).

B Ashkenazi Esq Barrister.

[1946] 1 All ER 424