Public Trustee v Butler & Anor [2012] EWHC 858 (Ch)

[2012] EWHC 858 (Ch)Case No HC11C00369
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 03/04/2012
Before
THE CHANCELLOR OF THE HIGH COURT
Between
The Public TrusteeClaimant(1)Andrew Hugh ButlerDefendants(2)Manju Choudhuri
Re: The Trusts of the will of Saral Kumar Bose
Justin Holmes (instructed by the Office of the Official Solicitor and Public Trustee) for ClaimantBarbara Rich (instructed by Worthingtons Solicitors) for first DefendantMark Baxter (instructed by Anthony Gold Solicitors) for second DefendantHearing Hearing date: 28 March 2012
Judgment

The Chancellor :

[1]This Part 8 claim issued by the Public Trustee on 21st February 2011 raises a number of questions concerning the true construction of the will dated 22nd June 1967 of Saral Kumar Bose (“the Testator”). The Testator died on 5th June 1972. Probate of his will (“the Will”) was granted to his widow Florence Katie Bose (“the Widow”) on 13th September 1972. By an order of the Court of Protection made on 30th March 1995 the Public Trustee was appointed sole trustee of the trusts of the Will in place of the Widow. The Widow died on 23rd May 1998.[2]Unusually for a case of this sort there is very little evidence concerning the Testator. He was born of a Hindu family in India on 3rd May 1893. At some stage, but there is no evidence when, the Testator came to England and settled here. Before or after that event he married the Widow. They had no children. I was told that the Testator was an electrical engineer and worked on the London Underground. At all events he was a man of means. He owned the house in which he and the Widow lived at the time he made the Will, 1 St Andrews Road, London, NW11. The grant of probate records that the net value of the estate of the Testator at the time of his death was £137,307. It is now represented by investments standing in accounts to 17th February 2012 at £581,150 with unapplied income arising since the death of the Widow of £265,645.[3]The Will is in manuscript. It is assumed that the handwriting is that of the Testator. The attesting witnesses were the Manager of the Golders Green branch of National Provincial Bank Ltd and a bank officer. The paragraphs are unnumbered but reference numbers have been inserted into the typed copy for the use of the court. I will refer to passages in the Will by reference to those numbers.[4]The Will starts in conventional form declaring it to be the last will and testament of the Testator. Clause 1 provided for the appointment of the National Provincial Bank Ltd as sole executor and trustee if the Testator and the Widow died more or less simultaneously “for administering my estate including my properties, stocks and shares (Debentures, Loan Stocks, Preference and Ordinary), building society deposits and shares, Mortgage on 24 Hamilton Road, NW11, Savings Certificates, Loan of £200 (two hundred pounds) to Derek Edgson, 21 Bridgewater Gardens, Edgware, Middx, and amounts due from others etc.” The appointment of that Bank did not occur but the clause has some relevance in the description of his estate by the Testator. Clause 2 indicates that the Testator wished to be cremated.[5]By clause 3 the Testator appointed the Widow to be the sole trustee for administering his estate and then continued:
“…she will be entitled either to spend the income from the estate entirely for her own benefit or partly for her own benefit including for the fulfilment of her cherished desires e.g. travelling here or abroad and partly for the benefit of my relatives here or in India and partly for the benefit of such good causes and aims which we both hold dear. My wife will have the liberty of spending out of capital up to £5,000 (five thousand only) in cash for travelling here or abroad and another £5,000 (five thousand only) in cash for treatment of any ailments or illness.”
[6]In clause 4 the Testator dealt with the position if, which she did not, the Widow remarried. First the same bank would be automatically appointed a trustee to act jointly with her. Second her entitlement to the income of the Testator’s estate was reduced to a proportion between one half and three quarters depending when the remarriage took place. Third, the Will then provided:
“The balance of income will be devoted to the benefit of my deserving relatives (descendants of my brothers and sisters) especially for furthering the education of my promising young (or even middle-aged in special cases) relatives by means of scholarships in India or abroad. The status quo of my wife, in respect of this will, will be restored to the position she enjoyed before remarriage, in case her second husband dies or be divorced.”
[7]Clause 5 conferred on the widow a right of occupation of the matrimonial home. The Will then continued in clauses 6 and 7:
“[6]After the death of my wife the bank will act as the sole trustee of the estate as left by my wife and it is empowered to grant, out of the net income, scholarships for education in India, British Isles or elsewhere to my promising relatives (descendants of my brothers and sisters, the individual names of whom will be shown in a list, to be supplied later on) and or to help (out of one-quarter of the income as a maximum) the deserving materially hardship cases amongst my relatives. “[7]The above will has been made out and written on this 22nd June, 1967 on the assumption that I remain childless. Should any children be borne (born) out of my marriage with Mrs Florence Katie Bose, my wife and children will inherit my estate in accordance with the code of the English law and the above Will (WILL) will be null and void except the provisions relating to my wife and children”
. It is common ground that there is no such list as is referred to in clause 6. Accordingly, the second and third questions raised in paragraph 1 of the Part 8 claim form do not arise.[8]As I have indicated the Part 8 claim was issued by the Public Trustee, as the sole trustee of the Will, on 21st February 2011. Paragraph 1 thereof raises 13 questions relating to the proper construction of clause 6 of the Will. The first defendant, Mr Butler, is the sole surviving executor of the Widow. He is joined to represent all those entitled on the partial intestacy of the Testator. The second defendant is a solicitor and a great-niece of the Testator being a grand-daughter of one of his brothers. She is joined to represent the descendants of the Testator’s brothers and sisters. On 22nd June 2011 Master Moncaster made the appropriate representation orders.[9]The evidence before the court consists of three witness statements of Sarah Spencer, a solicitor in the office of the Public Trustee, and one of the second defendant. The statements confirm that there were no children of the Testator and the Widow did not remarry. I was invited to put my judgment into writing so as to enable the Public Trustee, who was not represented by counsel at the hearing before me, to consider what further directions to seek in the light of my conclusions. Accordingly, I make no reference at this stage to paragraphs 2 to 4 (both inclusive) of the Part 8 claim form.[10]I turn then to question 1(a). This asks whether clause 6 contains a trust or only powers. Counsel for the first defendant contends that the clause contains a power exercisable over the net income to grant scholarships and/or up to one quarter of the income for deserving relatives. She contrasts the wording of clause 6 with that of clause 4 which “devotes” the income to the stated purpose. She contends that it follows that the capital and any unapplied income devolves as on a partial intestacy. Counsel for the second defendant points out that in a homemade will, such as this, it is inappropriate to assume that the Testator used technical/legal terms in their correct sense. He relied on Re Birks [1900] 1 Ch 417. He submits that the Testator must have intended the application of income to be the same during the Widow’s remarriage as on his death so that it would be wrong to draw any conclusion from the change of language from “devote” to “empower”. He points out that the only intestacy the Testator envisaged was, as provided in clause 7, if he had children.[11]I prefer the submissions of counsel for the first defendant. Whilst it may be that the Testator’s first language was not English there is no suggestion that he was not fluent and literate. The language used is good, the handwriting educated and the content characteristic of one accustomed to managing property. For example, clause 1 demonstrates the Testator’s knowledge of the various forms of investment likely to be comprised in his estate. Clause 3 shows that the Testator appreciated the distinction between income and capital. There is no reason to think that the Testator did not use the words appearing in his will in their normal meaning.[12]There are clear differences between clauses 4 and 6. For example, under clause 4 income is to be applied for “the benefit of deserving relatives”, but under clause 6 “promising relatives are to be granted scholarships”. Thus, the class and manner of application of income is different in the two clauses. In those circumstances it cannot be assumed that the Testator intended the application of the relevant income to be the same after his death as during the remarriage of his widow. Given that there is no such assumption then there can be no reason not to give the words “devote” and “empower” their different meanings. In my view clause 6 contains powers only in respect of income of the estate. Accordingly, I answer question 1(a) in sense (i).[13]Question 1(d),(e) and (f) proceed on the assumption, as is now common ground, that there was no list as mentioned in clause 6. What then is to be made of the phrase “my promising relatives (descendants of my brothers and sisters…)”? Counsel for the first defendant submits first that the additional words “the individual names of whom will be shown in a list supplied later on” are an essential part of the definition of the class of beneficiaries who are objects of the power. Accordingly, absent such a list, there are no objects. Second, she submits that the adjective “promising” necessarily imports uncertainty into the class as it involves subjective judgments without any sufficiently certain criterion. Counsel for the second defendant contends that there being no list the relevant words should, in effect, be struck out. What remains is either sufficiently certain or is merely a guide to the trustees. By sufficiently certain he submits that “promising” means academically promising, that concept is sufficiently certain and is being applied daily by schools and universities.[14]Again I prefer the submissions of counsel for the first defendant. The list was to contain individual names of either the descendants or the relatives, it is not clear to which class the word “whom” refers. But in either event it was an essential part of the definition of the class eligible for scholarships. If the list does not exist that part of the definition of the class cannot just be blue-pencilled out and the rest applied as though the additional requirement was never there. Accordingly, in my view, this power fails for uncertainty because it cannot be said of any individual, albeit a relative or a descendant of the Testator’s brothers and sisters, that he/she was or was not a member of the relevant class because the essential ingredient of his or her name being on the list cannot be satisfied.[15]In those circumstances it is not necessary to reach any concluded view as to whether the word “promising” when applied to the “relative” introduced an uncertainty which was not previously inherent in the description. In this respect I would accept the submission of counsel for the second defendant. The word “promising” is not added in a vacuum but in the context of scholarships for education. In that context, although opinions may differ as to whether A or B is promising, I do not think the concept is uncertain. A person liable to benefit from the education for which the scholarship is offered would be “promising”. As counsel for the second defendant pointed out schools and universities, even Inns of Court, apply this test regularly. Accordingly, I will answer question 1(d) in the negative. Questions 1(e) and (f) do not now arise.[16]Paragraph 1(g) to (j) raise questions directed to the power contained in clause 6 to apply up to one quarter of the income of the estate “to help…the deserving materially hardship cases amongst my relatives”. Counsel for the first defendant submitted that the adjective “deserving” is inherently uncertain. She relied on the dictum of Pearson J in Re Sutton (1885) 28 ChD 464, 465:
“If you were to treat the word “deserving” as standing alone it would be so vague that I do not know what meaning could be attached to it. Almost any object might be a deserving object.”
She made similar submissions in relation to “materially hardship cases” as a subset of the class of relatives. She accepted that if this part of clause 6 constituted a trust then it would be a charitable trust in the poor relations class, cf HM Attorney General v Charity Commission FTC/84/2011.[17]Counsel for the second defendant submitted that the class of relative was sufficiently certain. He relied on the judgment of Sachs LJ in Re Baden’s Deed Trusts [1973] Ch 9, 22. He pointed out that in Re Sutton the gift was valid because the word deserving was used in conjunction with the word charitable. So in this case, he submitted, any inherent uncertainty in the word “deserving” is overcome by its use in relation to “material hardship”. He submitted that there was no uncertainty in relation to that requirement. He did not demur from the submission of counsel for the first defendant that if this part of clause 6 constituted a trust then it would take effect as a charitable trust. He did not, either in writing or orally, go on to submit that if this part of clause 6 contained only a power then the object or purpose of the power was exclusively charitable.[18]I start from the proposition that a power to appoint amongst a class of relations is not inherently uncertain, see Lewin on Trusts 18th Ed. 30-33 and Theobald on Wills 17th Ed. 25-019. This part of clause 6 requires the trustee to select from that class those which are ‘material hardship cases’ and from that subset those who are ‘deserving’. It is not in dispute that the relevant test is whether it can be said with certainty that any given individual is or is not within the specified class. In answering that question a distinction must be drawn between conceptual and evidential uncertainty, for both propositions see Re Baden’s Deed Trusts. I conclude, but not without hesitation, that the concept of material hardship is sufficiently certain. But, assuming that to be so, I have great difficulty with the concept which divides those within the subset of material hardship who are deserving from those who are not. What are the further qualities which make one case of material hardship deserving but not another? For these short reasons I conclude that the power contained in the second part of clause 6 is invalid for uncertainty too. Accordingly, I will answer the question posed by paragraph 1(j) in the negative. In this event the question raised in paragraph 1(l) does not arise.[19]Before leaving the questions relating to the certainty or otherwise of the powers contained in clause 6 I should refer to a point reflected in questions (e) and (i) that the words “promising” and “deserving” even if uncertain would not invalidate the relevant provision because they are in each case “merely a guide to the trustee”. The point was made by counsel for the second defendant in his oral argument but without reference to any authority relevant to that point. I have some difficulty with the suggested distinction. If the word is added as a guide to the trustee it is part of the qualification to be enjoyed by the beneficiary. If such qualification as a concept is inherently uncertain then it invalidates the trust or power.[20]It was common ground that if any of the powers were sufficiently certain then they came with the provisions of s.3 Perpetuities and Accumulations Act 1964 which introduced the ‘wait and see’ principle. Accordingly, neither power, if sufficiently certain, is presently invalid as infringing the rules against perpetuities. In the event questions (k) and (m) do not arise.[21]In summary I will answer the following questions in the following way: Q.1(a)(i)yes Q.1(d) no Q.1(j)no For the reasons I have given the other questions do not arise. I will expect paragraphs 2 to 5 of the claim form to be dealt with conclusively when I hand down this judgment on the basis of a draft order submitted by the Public Trustee in advance. I shall also expect counsel for the Public Trustee to be in a position to explain to me why so long elapsed between the death of the Widow in May 1998 and the issue of this claim in February 2011. I can well understand that the administration of the Testator’s estate following the death of the Widow would require some investigation in India and elsewhere. On the face of it over 12 years is excessive. Further, it is quite likely that some of those entitled as on the partial intestacy of the Testator will have died and others sustained loss or inconvenience for being kept out of their entitlement for so long. I trust that the Public Trustee will give close consideration to these and all other consequences of the delay.

Cited in 1 later judgment