Re Stapleton, Stapleton v Stapleton and Others

 

Re Stapleton, Stapleton v Stapleton and Others

SUCCESSION; Wills: TRUSTS: COMPANY

CHANCERY DIVISION

ROXBURGH J

All England Law Reports 1936 - books on screen™

All ER 1946 Volume 1

Preamble

14, 15 JANUARY 1946

Wills – Contingent interest in income of residuary estate – Direction to accumulate intermediate income – Intermediate income not available for maintenance

during minority – Trustee Act, 1925 (c 19), ss 31(1), (3), 69(2).

Infants – Maintenance – Statutory power of maintenance – Contingent interest in income of residuary estate – Direction to accumulate intermediate income –

Statutory power not available – Trustee Act, 1925 (c 19), ss 31(1), (3), 69(2).

By his will the testator provided that out of the income of his residuary trust fund £200 a year should be paid to his wife while a widow and the balance should

be accumulated. He further provided that, on the death or remarriage of the wife, such income should fall into the residuary estate and the income of the

residuary trust fund should then be paid to his daughters O and J equally during their lives and to the survivor of them. The testator was survived by his wife

and the daughters O and J, who were infants. The question to be determined was whether, after paying the 􀂭 323􀀉 widow £200 a year, the trustees were

authorised, under the Trustee Act, 1925, s 31, to apply the surplus income of the residuary estate for the maintenance of the infants. By subsect (3) of sect 31,

that section applied, in the case of contingent interest, “only if the limitation or trust carries the intermediate income”:—

Held – Since the will contained a specific direction to accumulate the surplus income of the residuary estate the trustees had no power under the Trustee Act,

1925, s 31, to apply such income for the maintenance of the infants.

Re Reade-Revell followed.

Notes

It was held in Re Reade-Revell that where there is an express trust for accumulation there is no power under the Trustee Act, 1925, s 31, to apply surplus

income for the maintenance of infants. Roxburgh J, follows this decision, holding that it was not decided upon the special words of the will in that case as

showing a contrary intention to sect 31 within the meaning of sect 69 of the Act. Re Leng is distinguished as there was there an implied, not an express, trust

to accumulate and Simonds J, was able to hold that maintenance could be allowed.

As to Maintenance out of Intermediate Income, see Halsbury Hailsham Edn, Vol 17, p 644, para 1358, and Vol 14, pp 352, 353, para 661; and for Cases,

see Digest, Supp; Executors, No 5251a–d, and Infants, 1058b.

Cases referred to in judgment

Re Collins, Collins v Collins (1886), 32 ChD 229, 28 Digest 223, 825, 55 LJCh 672, 55 LT 21.

Re Boulter, Capital & Counties Bank v Boulter [1918] 2 Ch 40, 23 Digest 452, 5250, 87 LJCh 385, 118 LT 783.

Re Judkin’s Trusts (1884), 25 Ch D 743, 23 Digest 409, 4805, 53 LJCh 496, 50 LT 200.

Re Reade-Revell, Crellin v Melling [1930] 1 Ch 52, Digest Supp, 99 LJCh 136, 142 LT 177.

Re Raine, Tyerman v Stansfield [1929] 1 Ch 716, Digest Supp, 98 LJCh 244, 141 LT 25.

Re Leng, Dodsworth v Leng [1938] 3 All ER 181, [1938] Ch 821, Digest Supp, 108 LJCh 65, 159 LT 355.

Adjourned Summons

Adjourned Summons to determine a question arising under the will of William Charles Stapleton. The facts and the relevant provisions of the will are fully set

out in the judgment.

J W Brunyate for the plaintiffs.

G C D S Dunbar for the first defendant.

C Montgomery White for the remaining defendants.

15 January 1946. The following judgment was delivered.

ROXBURGH J. In this case the testator, William Charles Stapleton, died on 27 November 1943, leaving a widow surviving and three children, namely the

two infant plaintiffs, Olga Mary Stapleton and Josephine Stapleton, and the defendant Mrs Beryl Fanny Blood. The applicants are the two infant children; and

the defendants are the widow, the two trustees of the will (namely, Florus William John Mason and the National Provincial Bank Ltd), and one of the testator’s

children, Mrs Beryl Fanny Blood.

The question that I have to decide is whether the surplus income of the testator’s residuary estate which remained after paying an annual sum to the

widow should be applied for the maintenance of the infant plaintiffs, under the Trustee Act, 1925, s 31.

The testator, after appointing executors and trustees, bequeathed small legacies to the executor, Mason, and to a domestic servant, and all his furniture

and certain chattels to his wife absolutely. Then he devised the house in which he resided to his trustees upon trust to permit his wife to reside there during her

widowhood rent free, and there is a provision that:

‘… she shall provide a home for my infant children during their respective minorities and after her death or remarriage whichever shall first happen

the same shall fall into and form part of my residuary estate.’

Then he devised all the residue of his real estate and bequeathed the residue of his personal estate to his trustees on trust for sale, calling in and conversion;

after payment of his debts and funeral expenses, they were to invest the residue and from and out of the income to pay £200 a year to his wife during her

widowhood, and to stand possessed of the balance of the income received from the residuary trust fund and hold it upon trust to accumulate the same during

the 􀂭 324􀀉 widowhood of his wife; and such income after the death or remarriage of the wife was to fall into and form part of his residuary estate. Cl 7 says:

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‘From and after the death or remarriage of my said wife I direct my trustees to pay the income of my residuary trust fund unto and equally between

my two children Olga Mary Stapleton and Josephine Stapleton during their lives or the survivor of them.’

The interests of these infant plaintiffs are, admittedly, contingent interests, and therefore the Trustee Act, 1925, s 31, according to subsect (3), only

applies “if the limitation or trust carries the intermediate income.” Moreover, by sect 69(2) of the Act of 1925, sect 31 applies “if and so far only as a contrary

intention is not expressed” in the will.

Counsel for the plaintiffs has addressed to me a very powerful argument based upon Re Collins, and also upon Re Boulter. He extracts from Re Collins

the proposition that the courts do not regard a direction to accumulate income as necessarily inconsistent with an intention to allow maintenance; and he relies

on Re Boulter for the proposition that, under the Conveyancing Act, 1881, s 43, the statutory power was available when the income would go along with the

capital if, and when, the capital vested. In Re Boulter Younger J said ([1918] 2 Ch 40, at p 47):

‘The result of sect. 43, as above indicated, is thus stated by MR. WOLSTENHOLME [WOLSTENHOLME AND TURNER’S CONVEYANCING

ACTS, 3rd Edn., p. 95] in terms which, as KAY, J., in Re Judkin’s Trusts said, appear to be an accurate statement of its effect: “Where the income will

go along with the capital if and when the capital vests, then the income is applicable under the section for the benefit of the infant, otherwise not.“’

Counsel for the plaintiffs further argues that the introduction in the Trustee Act, 1925, s 31, of words which are not to be found in the Conveyancing Act,

1881, s 43, (viz, the words which I have already referred to, “if the limitation or trust carries the intermediate income”) cannot have restricted the ambit of the

statutory power of maintenance which existed before that Act came into force.

I consider myself absolved from expressing any judgment, or even opinion, upon the accuracy or otherwise of the argument of counsel for the plaintiffs.

In fact, I have not pursued it to its full length, because I feel bound by the decision of Clauson J in Re Reade-Revell, the headnote in which is as follows:

‘A testatrix, who died after the commencement of the Trustee Act, 1925, by her will directed the trustees thereof to set apart a specific sum, to

accumulate and capitalise the income thereof, until A. should attain the age of 21 years; and, if A. should attain that age, then to pay to her the income of

that sum during her life and after her death to hold the capital sum in trust for her children: Held, that, as the trust for A., for a contingent interest for her

life, did not carry the intermediate income, the trustees had, upon the proper construction of the Trustee Act, 1925, s. 31, no power to apply that income

towards A.’s maintenance.’

It is perfectly true, as counsel for the plaintiffs pointed out to me, that there were in that will certain provisions for the maintenance and support of the infant

there in question, upon which Clauson J might have rested his judgment. I mention that to show that I have not lost sight of that submission, because, in my

opinion, he did not rest his judgment upon those provisions. What Clauson J said was this ([1930] 1 Ch 52, at p 55):

‘In the present case the legacy of £40,000 is held in trust to pay the income to the infant for her life contingently upon her attaining the age of 21

years. By virtue of sect. 31 the trustees may during the period of the infant’s minority apply towards her maintenance the income of the property,

provided the trust carries the intermediate income; see sect. 31(3). Here, there is in the will an express direction to the trustees to accumulate the income

during the minority of the contingent life tenant and to add that income to the capital sum.’

Then come words which, in my opinion, are vital:

‘The result of that direction must be that the contingent interest of the infant, being limited to an interest in the income of the fund as it stands when

she attains 21, does not carry the intermediate income of the property. It was contended that as the £40,000 trust legacy carries interest as from a year

after the death of the testatrix there is here a trust which carries the intermediate income within the meaning of the subsection—namely, the trust of the

legacy in favour of the infant and her children 􀂭 325􀀉 and the ultimate remaindermen in default of her children. But in my judgment upon the proper

construction of the language of the subsection, the trust therein referred to is, to apply that language to the present case, the trust which creates the

contingent life interest in favour of the infant. That is a trust which does not carry the intermediate income on account of the direction for

accumulation.’

In my opinion, that decision is as directly applicable to the case before me as any decision on another will could be. I am satisfied that Clauson J did not

rest his decision upon the special words in that will to which counsel for the plaintiffs called my attention. He did not refer to them at all, and he has used

language which, in my opinion, excludes any suggestion that he relied upon them. Moreover, I am quite certain that he decided the case not upon sect 69(2) of

the 1925 Act, but upon sect 31(3). Nowhere in his judgment did he refer to sect 69. Although Re Collins and Re Boulter were apparently not cited to him, Re

Raine was, and there is a reference in Re Raine to Re Boulter; but that reference does not incorporate expressly those passages in Re Boulter which are most

material in the present case, and I am inclined to assume that those material passages were not brought to the attention of Clauson J. But none of those things,

in my judgment, justify me in treating the question as being at large. In my opinion, I am bound by the decision of Clauson J.

In Re Leng Simonds J was considering a case where there was no express trust for accumulation, but an implied trust, the details of which are not material

to this case. In the course of his judgment, where he reached the conclusion that, notwithstanding the implied trust for accumulation, maintenance could be

allowed, Simonds J referred to Re Reade-Revell and said ([1938] 3 All ER 181, at p 182):

‘In that case, the judge had to consider a case where there was a legacy of £40,000 given by the testatrix upon trust to pay the income to her husband

during his life, and, after his death, until the beneficiary should attain the age of 21 years to accumulate the income, to add the income so accumulated to

corpus, and to pay the income of that capital fund to the beneficiary for her life. Having, as I say, that disposition to consider, he held that it was not

possible to maintain the beneficiary out of the intermediate income until she attained the age of 21 years. The judge came to that conclusion by reason

of the fact that in that will there was a specific direction to accumulate, [I desire to stress that sentence because that is what we have in the present case]

and he held that, having regard to that direction, it was impossible that the child should be maintained during her infancy. He did not, as I understand it,

intend to decide that the old law, then well-established, in regard to the maintenance of infants out of intermediate income where those infants would,

upon attaining the age of 21 years, be entitled to the income of the trust fund, was abrogated. I think he decided that case upon the particular language

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of the instrument which he had to construe, and I do not feel that it is an authority which binds me to hold that in the present case the infants are not

maintainable out of the intermediate income, which would eventually go to increase the capital of the shares to which they will, upon attaining 21,

become entitled.’

I think that where Simonds J, referred to “the particular language of the instrument” he was referring to the specific directions to accumulate. But

however, that may be Simonds J was not dealing with a specific direction to accumulate, and he found himself able to distinguish Re Reade-Revell. I am

dealing with a specific direction to accumulate, and I find it quite impossible to distinguish Re Reade-Revell, by which I consider myself to be bound.

I shall, therefore, declare that the statutory power conferred by the Trustee Act, 1925, s 31, is not available in the present case.

Declaration accordingly.

Solicitors: Bridges, Sawtell & Co (for all parties).

B Ashkenazi Esq Barrister.

􀂭 326􀀉

[1946] 1 All ER 327