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CH
1996 C No. 1199
IN THE HIGH COURT OF JUSTICE
CHANCERY
DIVISION
Before: THE HON. MR. JUSTICE LINDSAY
IN THE MATTER OF THE ESTATE OF MARJORIE LANGDON
CAMERON
DECEASED
B E T W E E N
Theresa Rosen Peacocke instructed by Mills & Reeve for the
Plaintiff
Nicole Sandells instructed by Bell & Howe for the 1st Defendant
Elspeth Talbot Rice instructed by Radcliffes for the 2nd, 3rd and 4th Defendants
Hearing date: 25th-29th January
1999
JUDGMENT
This is the official judgment of the court and I direct
that no further note or transcript be made
|
The Honourable Mr Justice Lindsay
DATED: 24th March
1999
Contents
1. The Facts
2. The Questions
3. The EPA
Ademption
Liability of the Executors
Relief
Mr. Justice Lindsay:
-
I have before me an Originating Summons and Counterclaim
which raise questions on the subject of the ademption of a gift by will
by a subsequent lifetime gift. Ademption of such a kind is a subject that
appears, so far as concerns reported cases, to have lain undisturbed for
half a century and there is no authority at all dealing with the context
before me in which the subsequent lifetime gift was made under the Enduring
Powers of Attorney Act 1985. I shall first set out the position on the facts.
I have received both written and oral evidence. I have also received, over
a protracted period, further written submissions from the parties directed
chiefly
to a number of authorities not dealt with at the hearing.
1. THE FACTS
-
James
Cameron,
a medical doctor, and his wife Marjorie
Cameron
had four
children
only, all sons. The eldest, Donald (the First
Defendant) was born on the 6th April 1940. Iain (the Fourth Defendant) was
born on the 13th July 1943, Alastair (the Second Defendant) on the 8th August
1945 and Hamish (the Third Defendant) on the 12th October 1952. In 1945
those sons' grandfather, William
Cameron,
made Settlements for the benefit
of Donald, Iain and Alastair respectively. The trustees of those Settlements
had power to apply income for the maintenance, benefit or education of the
respective grandchild concerned. In 1954 a similar Settlement by his grandfather
was made for the benefit of Hamish. The papers in the case also disclose
the existence (but not fully the terms or property affected by) a number
of other trusts the benefits of which were enjoyed by the family -"the H.L.
Webb Settlement - Marjorie's fund"; the "Doctor and Mrs
Cameron
Marriage
Settlement"; the "Mr and Mrs H.L. Webb
Voluntary
Settlement - Marjorie's
accrual share"; the "H.L. Webb deceased - Marjorie's fund" and the "Mrs
F.J. Webb deceased - Marjorie's fund". A common feature appears to have
been that capital would become distributable amongst
children
of Marjorie
Cameron
equally at 21 or marriage in the absence of appointment to the contrary.
The
children
of Doctor and Mrs
Cameron,
if not rich, were at least prospectively
well provided for.
-
All of the four sons were educated at fee-paying schools.
Three went to
Charterhouse.
-
In May 1967 their father died, survived by his widow.
On the 6th June 1974 Mrs
Cameron,
who had moved to a house at 109 Abbotsbury
Road, London, W.14, made her will. She appointed J.M. Crossman, her solicitor,
and her son Iain as executors and trustees. There were no specific devises
or bequests and the whole of her net estate was, as residuary estate, divided
into four equal shares, one each absolutely for each of her sons who should
be living at her death with a provision that if any should die in her lifetime
leaving a wife or
child
or
children
him surviving then such a wife would
take the income of the share for her life and, subject thereto, such
child
or
children
would take in equal shares upon attaining the age of 18 years
of age. There was a provision that any share as to which the primary trusts
failed would be added equally to the other shares. The will, in other words,
provided for the four sons equally with some provision for stirpital equality
to be maintained should any predecease the Testatrix. Alastair's evidence,
which I accept, is that his mother was
very
fair and frequently stated that
it was her desire and intent to treat all four of her sons equally.
-
In 1979 Marjorie
Cameron,
the mother, was diagnosed
as having progressive diffuse moderate cerebral atrophy. There were some
days that were better than others but, as the description of her condition
suggests, it was progressive and there was, over a period of years, a progressive
deterioration in her mental capacity.
-
-
By the early 1980s each of the married sons had his
own separate house but Hamish was living at Abbotsbury Road with his mother
who, by then, needed a good deal of supervision and assistance, which he
provided.
-
In April 1984 Helen left Donald and took Jamie with
her. There is a conflict as to the evidence of Donald's circumstances at
this time. Earlier he had undoubtedly been earning an excellent remuneration,
partly salary and partly commission, as a computer salesman, but his brothers
paint a picture in which by now he was a spendthrift coming to the end of
his resources, drinking heavily, sometimes unemployed and importuning his
mother for money. Donald says otherwise. There was some oral evidence of
Donald importuning his mother for the price of gin. Moreover, whilst I can
quite see that in the course of their passage from Mrs
Cameron
to her doctor
and from the doctor to solicitors acting for Mrs
Cameron
and on from those
solicitors to Donald, messages and intentions may have become misunderstood
or exaggerated, it is a remarkable feature that on the 11th May 1984 Messrs
Theodore Goddard, writing as Mrs
Cameron's
solicitors after discussion with
her doctor, wrote to Donald asking him not to call at his mother's house
and not to communicate with her except when specifically asked to do so.
The letter made it clear that Alastair and Hamish knew of the letter and
agreed to its being sent to Donald. On the evidence I have no doubt but
that by the time that Helen left him and for a good while thereafter Donald
could fairly be seen as an improvident man who was occasionally drinking
to excess, who had already got through a good deal of his own share of family
money and who was from time to time pestering his mother for more.
-
In 1984 Helen filed a petition for divorce from Donald
claiming that the marriage had irretrievably broken down. Donald has not
seen Jamie since the separation. In November 1984 he left England for Spain,
returning to England in early 1985. For a while his whereabouts had been
unknown to his brothers. On his return he made an attempt at suicide and
became an out-patient at a psychiatric hospital for about a year. He was
treated for depression and intense stress and to this day he is prescribed
anti-depressant drugs. Helen obtained a Decree Absolute on the 14th July
1986. Donald accepts that he has been in difficult financial circumstances
since late 1988 although on the evidence I would put the date of the beginning
of his financial difficulties earlier and certainly not later than the Spring
of 1984.
-
Mrs Marjorie
Cameron's
condition continued to worsen
and it was seen by Iain, Alastair and Hamish that it would be best that
she should be moved to a nursing home. Her income was such that affording
that presented no problems.
-
-
-
-
Section 1 of the 1985 Act provides that a power of attorney
under the Act is not revoked by any subsequent mental incapacity but that
upon such incapacity supervening the ability of the donee of the power to
act under it is greatly circumscribed unless and until the instrument creating
the power is registered under Section 6 of the Act. Quite when application
to register was made is unclear but Mrs
Cameron's
EPA was certainly registered
by the 12th July 1989. It has not been suggested that it was registered
before the Codicil was made on 1st April 1989. Notice of Intention to register
it was not given to Donald. His brothers found him
very
difficult to approach
even when they could be sure of his address. It has not been argued that
the failure to give him notice affected either the registration or the ordinary
consequences of the registration of the EPA.
-
The nursing home to which Mrs
Cameron
had first moved
was not a success and the three brothers who were Attorneys ("the Attorneys")
began to look about for another. It was felt that a second and better one
would be likely to be more expensive than the first and that Mrs
Cameron's
income would not be sufficient both to pay for it
and for the continuing
upkeep of the house in Abbotsbury Road. It was felt, accurately as it turned
out, that Mrs
Cameron
would never be well enough again to return home. That
factor, together with a likely shortfall in income, coupled also with Hamish
no longer wishing to live in the house, led to Iain floating the idea of
selling the house. A difficulty was, of course, that Hamish would thereby
become homeless. Advice was taken from accountants - KPMG - and from Mr
Phillips.
In late October 1989 Mr
Phillips
and Iain discussed three subjects
following on from the notion that the house in Abbotsbury Road was to be
sold; the purchase of a house for Hamish, the provision of funds for the
education of Marjorie's grandchildren and"the protection of Donald's [prospective]
share in the estate", by which was meant its protection not only against
claims by his ex-wife Helen but protection also against Donald's own imprudence.
By now Donald was employed, if at all, only spasmodically and was surviving
on Income Support and Housing Benefit paid to him by the State. He was not
paying anything towards support of his ex-wife or for the maintenance or
education of Jamie. Whether Donald had by now totally exhausted the resources
that had come down to him through family trusts is not clear to me but he
had told Iain (and, perhaps, the DHSS) that he had no assets to speak of
and, as I mentioned earlier, he accepts that he was in continuing financial
difficulties.
-
In discussion with Mr
Phillips
the idea that a new will
should be made by Mrs
Cameron
to meet some or all of the objectives that
had been discussed came up but Mr
Phillips
pointed out that the EPA did
not itself enable a new will to be made. In December 1989 he set out in
a letter to Iain the relatively complicated, time-consuming and costly process
that would need to be pursued, including the obtaining of the approval of
the Court of Protection, if a new will for Mrs
Cameron
was to emerge. The
proposed provisions of such a new will included that significant inter
vivos
gifts for the benefit of Jamie or of Donald should be made and then brought
into account in computing Donald's otherwise equal ¼ share of residue. Iain's
reaction, in January 1990, was that the process was more complicated than
he had thought and that led Mr
Phillips,
in February 1990, to suggest the
use of the EPA. The notion of lifetime gifts that would pro tanto be brought
into account and thus adeem the gifts of shares of Mrs
Cameron's
residuary
estate, an idea that had first emerged in relation to the possible new will,
was still in mind and was discussed between Iain, Alastair and Hamish. Donald
knew nothing of it. The Attorneys agreed between themselves that setting
up education trusts for Mrs
Cameron's
grandchildren was a worthwhile idea,
using money to come out of the sale of the Abbotsbury Road house, the sale
of which was by now well in hand. It was in mind, as Iain put it to Mr
Phillips,
that such provisions should be"coming out of the respective parent's share
of inheritance". Making some comprehensive provision for Donald's share
to be on protective trusts was abandoned partly because of the effort which
that would require and partly because it might make Donald feel that he
was being treated unfairly. The purchase of a home for Hamish, but at the
expense of his respective share, was agreed between Iain, Alastair and Hamish.
-
I have heard evidence from Mr
Phillips.
He proved to
be a
very
clear and direct witness. Given that the quality of his professional
advice was, at points, in issue, his candour was especially refreshing.
I found him to be an impressive witness on whose evidence I can rely. He
took the
view
that the inter
vivos
gifts which I shall shortly describe
were ones which might properly be made under the EPA and would be within
the 1985 Act. His advice to the Attorneys had been clear; that the proposed
provision for Jamie's education which I shall mention would, if made, be
taken into account against Donald's share of his mother's estate. In discussion
with Iain, he told me, two principles had become clear; firstly, as the
guiding principle, that Mrs
Cameron
would have wished to treat all four
sons equally, regardless of any factors to the contrary, and, secondly,
that without the Attorneys wishing to be patronising about their eldest
brother, it was recognised that by then Donald needed protection from himself
and perhaps also from his actual or prospective creditors. Money would last
longer and be better spent, the three felt, (as Mr
Phillips
understood from
Iain) if applied for Donald's benefit rather than being simply handed over
to him. Mr
Phillips
knew that there had been the earlier educational trusts
for the benefit of the four brothers from their grandparents and he knew
also, when the provision for Jamie's education was made as I shall shortly
describe, that that transaction was not an isolated one but that there had
earlier been dealings for the benefit of Hamish and for Alastair's
children,
in each case the transaction being intended to adeem pro tanto their prospective
shares in their mother's estate. Iain, who was not proposed to take any
inter
vivos
gift, was content with the proposals for such gifts on the basis,
as was understood, that they would adeem his brothers' respective shares
of residue and it was he, rather than Mr
Phillips,
who had sounded out Hamish
and Alastair on the proposals. Nothing was said to Donald.
-
The sale of the Abbotsbury Road house, which was leasehold,
was delayed whilst steps were taken to get in the freehold in order to obtain
a more advantageous sale. In May 1990, ahead of the sale but after it had
been decided to proceed to a sale, Mrs
Cameron
by the Attorneys advanced
£55,000 out of her resources in favour of Hamish with a
view
to assisting
him in the purchase of an alternative roof over his head. It was Iain's
express intention that this gift should in due course be taken into account
when, on Mrs
Cameron's
death, the estate fell to be divided. Alastair, too,
acted on the understanding that the principle of ademption would apply.
Hamish does not in terms say otherwise and he deposes to the truth of the
affidavits of those two of his brothers.
-
In October 1990 contracts were exchanged for the sale
of the Abbotsbury Road house at £425,000. The completion, in November 1990,
yielded some £380,000 net. In correspondence and discussion with his brothers
Iain reverted to the subject of educational trusts for Mrs
Cameron's
grandchildren.
Specialists who dealt with educational policies and trusts were consulted.
By the 1st January 1991 the Attorneys' proposals had been agreed between
them; a trust under the Married Women's Property Act with Alastair and Iain
as trustees should be set up to receive £62,512 for the benefit of Alexandra
and Hannah, Alastair's
children,
and an"Educational Trust" from the School
Fees Insurance Agency -"SFIA" - would be set up for Jamie. This latter was
then thought to cost £58,407.50p. These proposals were described in a letter
from Iain to Mr
Phillips,
who was also asked whether Donald needed to be
told of the proposals and whether it could be assumed that the intended
provision for Jamie's education would serve to prevent a claim by Donald's
former wife, Helen, against Donald's eventual inheritance. Iain's letter
made it clear that the Attorneys intended that the gifts should be treated
as advances against the separate inheritances of Donald and Alastair.
-
Helen was told of the intended provision for Jamie's
education. She was immensely grateful. She replied:-
"I give you my word in
view
of what you are
doing that I no longer have any interest in Donald's finances".
-
Mr
Phillips
saw no need for Donald to be informed and
informed Iain that Donald faced potential claims from Helen both for herself
and on Jamie's behalf. Mr
Phillips
and the Attorneys also had in mind that
the proposed gifts might lead to Inheritance Tax savings on Mrs
Cameron's
death, savings dependent upon the length of time by which she survived the
gifts, and also that there might be other tax savings consequent upon them.
The figures in the proposals
changed
a little but, roughly simultaneously,
gifts were made by the Attorneys in January 1991 (or at any rate by the
26th February 1991) of £71,827.50p to trustees for the education and benefit
of Alastair's
children
and £57,396 was paid to SFIA in or towards provision
for Jamie's education by way of a cash deposit, an insurance bond and 10-year
endowment policies. A little later, on its being learned that it was hoped
that Jamie would be able to board at school and that the cost was, on that
account, to increase, the £57,396 was increased. The Attorneys paid a further
£5,200 to Alastair and to Jamie's mother, Helen, as trustees, for his education.
The total provision for Jamie's education was thus £62,596. There has been
no argument before me inviting me to distinguish between the £57,396 and
the £5,200.
-
As had been the case in respect of the earlier gift
to Hamish, Mr
Phillips'
advice to the Attorneys was that these provisions
would be taken into account against the two respective shares, Donald's
and Alastair's, in Mrs
Cameron's
estate. Iain's evidence, which was not
challenged,
was that the Attorneys would not have made the three provisions
unless the principle of ademption had applied because otherwise the gifts
would have been contrary to Mrs
Cameron's
intention. Mr
Phillips
had convinced
Iain that the gifts would be treated as advances against the brothers' respective
inheritances from their mother. Alastair's evidence, also unchallenged was,
as it had been in relation to the gift to Hamish, that
all the gifts
were made on the understanding that the principle of ademption would apply.
The third attorney, Hamish, says nothing to the contrary.
-
-
Mr
Phillips
in his answering letter, without his directly
referring to the 1985 Act, raised the spectre that such new advances could
not be said to be meeting the recipient's"needs" but he felt that no-one
would be likely to complain. He had not given any such advice in relation
to the earlier gifts. Iain also took advice from the Financial and Investment
Service of the National Westminster Bank on the footing that the gifts that
I have described were treated as advances against expected inheritances.
-
By January 1992 the proposal to make new and further
advances or gifts had been shelved. Mrs
Cameron
had a healthy surplus of
income over expenditure and the Attorneys had continued and increased a
practice she herself had begun of generous annual presents to her sons.
Because, some while since, she had recognised that her memory was not as
good as it might be she had abandoned birthday presents, which required
the birthdays to be remembered, and had instead given annual gifts of £1,000.
She now, by her Attorneys, gave annual gifts of £5,000 per annum to each
of her sons. There was more than enough income to cover this.
-
-
"This sum is to be taken into account when calculating
your entitlement under your mother's will".
An account was sent to Donald showing how, correspondingly,
the gifts to Hamish and Alastair were also to be brought into account. Mr
Phillips
made the point to Donald that an excess of disposable capital might
serve to deprive him of Social Security benefits and that there was a good
case for all or part of his entitlement being put into trusts. The letter
invited Donald to arrange a meeting.
-
Donald did not answer. There is no suggestion that he
had not received the letter. Mr
Phillips
prepared a schedule of an appropriation
of the Stock Exchange investments in the Estate between the four residuary
legatees on the basis that the inter
vivos
gifts were to be brought into
account. Still nothing was heard from Donald. In August of 1993 that scheme
of appropriation began to implemented.
-
On the 13th September 1993 solicitors for Donald entered
the correspondence. They expressed surprise that an inter
vivos
gift made
without Donald's consent or knowledge for Jamie should be taken into account
in calculating Donald's share of the residue. When this was reported to
Iain he replied, consistently with his earlier expressions, that the Attorneys
would not have made provision for the grandchildren's education other than
on the basis that the provisions were advances against the expected inheritance
of the parent.
-
-
The Executors' solicitors - effectively Mr
Phillips
- themselves went to Counsel. She was asked to advise on some specific questions
and on any other aspects she considered relevant. Alastair and Hamish have
not queried the propriety of the ademption, pro tanto, of their respective
shares in their mother's estate, nor has either of them or Iain asserted
that there was any invalid exercise of the EPA.
-
In the meantime solicitors for Donald's former wife,
Helen, approached Iain for information as to the likely extent of Donald's
inheritance. He then gave her a brief outline of his mother's estate and
its division between the four sons.
On the 17th November 1993 Counsel advising the Executors
in conference advised that the matter of ademption was finely balanced. She
gave no advice as to the propriety of the gifts as within or without the scope
of the 1985 Act. A note of her advice was supplied to Donald's solicitors.
-
On the 21st February 1994 Helen
Cameron
launched proceedings
in the Luton County Court to restrain Donald dealing with his receipts from
his mother's estate and asking for full disclosure of his assets. She obtained
such an injunction that
very
day. The order was said also to be directed
to Mrs
Cameron's
Executors, who were given leave to intervene.
In February 1994 Jamie, who had earlier been at a preparatory
school, came first in the entrance exams to the boarding school that had been
chosen
for him, at Ackworth in Yorkshire. He gained a scholarship. The Attorneys
felt
vindicated
in their support of his education. It had earlier been found
that the financial provision that had been made was not sufficient to have
sent him to his father's and uncles' school.
-
On the 23rd March 1994 the injunction in the Luton County
Court was
varied
but remained in place so far as concerned Donald's assets
within his mother's estate. Shortly afterwards the Executors agreed with
Helen's solicitors not further to distribute to Donald until the proceedings
now before me were concluded. Share certificates have been distributed to
Iain, Hamish and Alastair in implementation of the Scheme of Appropriation
that had earlier been resolved upon by the Executors. A reserve was kept
for costs and to meet Donald's entitlement. Donald has been receiving dividends
on shares put aside for him. In correspondence Donald's solicitors not only
pressed the case that there was no ademption of their client's share but
also raised questions as to whether Mr
Phillips
had given negligent advice.
-
2. THE QUESTIONS
-
It is against that background of fact that I turn to
deal with the three principal questions that are raised namely:-
(i) Were the inter
vivos
gifts made in 1991 by the attorneys
(thus including, most particularly, the provision for Jamie's education)
made in
valid
exercise of the Enduring Power of Attorney granted to
the Attorneys?
If they were then:-
(ii) Is the legacy to Donald in Mrs
Cameron's
will adeemed
pro tanto by that provision made for his son's education?
If there was no such ademption then:-
(iii) Are the Executors liable to Donald in damages for breach
of duty?
Other questions may arise depending on the answers given to
those, but those remain the principal questions. After dealing with them I
shall then describe what, if any, relief is appropriate at this juncture.
3. THE EPA
-
Section 3 (2) and (4) of the 1985 Act provides:-
"(2) Where an instrument is expressed to
confer general authority on the attorney it operates to confer,
subject to the restriction imposed by subsection (5) below and
to any conditions or restrictions contained in the instrument, authority to
do on behalf of the donor anything which the donor can lawfully
do by an attorney.
(3) ....................
(4) Subject to any conditions or restrictions contained
in the instrument, an attorney under an enduring power, whether
general or limited, may (without obtaining any consent) act under
the power so as to benefit himself or other persons than the donor
to the following extent but no further, that is to say:
(a) He may so act in relation to himself or in relation
to any other person if the donor might be expected to provide
for his or that person's needs respectively; and
(b) He may do whatever the donor might be expected
to do to meet those needs."
-
Section 13 (2) provides:-
"(2) Any question arising under or for
the purposes of this act as to what the donor of the power might
at any time be expected to do shall be determined by assuming
he had full mental capacity at the time but otherwise by reference to the
circumstances existing at that time."
-
Miss Sandells, in the course of an attractive argument
on behalf of Donald, argues that in the circumstances Mrs
Cameron
was not
to be expected to provide for Jamie's private education, that it was not
a need of Jamie's or of Donald's and that even if it was, the provision
which the Attorneys made was in any event not such that Mrs
Cameron
might
have been expected to have made it to meet that supposed need. She points
out that Mrs
Cameron
did not see Donald or,
very
probably, Jamie between
1984 and her death and that she could, had she been so minded, have readily
altered her will in favour of them or either of them to make provision for
Jamie's education before the EPA was registered in 1990 (on the assumption
that she lost testamentary capacity about the same time as the EPA was registered).
It must be, says Miss Sandells, that she
chose
not to do so. Mrs
Cameron,
says Miss Sandells, was under no legal obligation to Donald or Jamie or
to Jamie's mother, Helen. She made no gifts to Jamie. Miss Sandells drew
my attention to
In re R [1990] 1
Ch
p. 647 but, beyond shewing the
great
changes
introduced by the 1985 Act, that case does not, in my judgment,
throw any light on the questions with which I am dealing.
Re C (A Patient)
[1991] 3 All ER p. 866, to which Miss Sandells next referred me, shows
that is often likely that more than one kind of provision may be described
as what the donor of the power of attorney"might be expected to provide".
At
p. 870 Hoffmann J observed:-
"... I observe that the statute, recognising
the difficulty of arriving at any certainty in these matters, says"might"
rather than"would be expected to provide". In matters of detail there
must be a range of
choices
which would be equally
valid".
The learned judge also there accepted a submission that the
court should be cautious in disposing of the patient's estate whilst she was
alive but in that case, as I would hold here, there was ample room for substantial
dispositions to be made which still did not threaten the patient's style of
life and yet which offered the possibilities of a saving of Inheritance Tax
and of the immediate enjoyment of benefit from the estate.
-
The last case cited on this part of the argument was
In re D [1982] 1
Ch
p. 237, per Sir Robert Megarry
V-C,
which was
chiefly
concerned with the rôle of the court in drafting a will for
a patient. Miss Sandells emphasised the passage at
p. 252 where Sir
Robert referred to the desirability of provision of reasonably detailed
information as to the size of the estate, its income and the expenses of
maintaining the patient. The financial and other circumstances of those
who might be claiming benefits were also to be made clear. Whilst all that
could not be doubted I fail to see its relevance to this case. The Attorneys,
who included two
chartered
accountants and were, of course, members of her
family, were, as I hold on the evidence, fully aware of the financial circumstances
surrounding Mrs
Cameron
and of the relevant personal and family information.
-
In the oral evidence Hamish, speaking of his mother,
said that he thought she would have felt some responsibility to provide
for Donald's needs as he had abandoned his responsibilities to his wife
and family. Donald accepted that his mother was"a caring person".
As for Jamie's education, that was in my judgment a"need"
within Section 3 (4) (a) and (b) and not less so by reason of the fact that
the State would have provided it had private provision for it not been found.
As Miss Talbot Rice on behalf of the Second, Third and Fourth Defendants submits,
education, for a
child,
is undoubtedly a need. Indeed, the State provides
it because it is so fundamental a need. As for whether Mrs
Cameron
might have
been expected to have provided for Jamie's private education as she did to
meet that need, Iain's written evidence was that in 1989 Donald had told him
that he, Donald, would like Jamie to go to
Charterhouse
where he, Donald (and
Iain and Alastair) had been. Donald in his written evidence did not deny that
but said that he did not remember saying so. Iain was not cross-examined on
this possible conflict in the evidence.
-
-
-
-
-
As Hoffmann J pointed out, there is no need for complete
certainty on such points but, in all the circumstances, I hold that in 1991
the Attorneys could
very
reasonably have concluded and did conclude, as
was the case, firstly, that Mrs
Cameron
might have been expected to make
provision for Jamie's education and, secondly, that the provision which
the Attorneys on her behalf made by way of the SFIA and as to the further
£5,200 were of a kind which she might have been expected to make both to
confer some benefit on Donald and to meet the need to provide an education
for Jamie.
-
I do not understand Miss Sandells to argue that the
provisions made either for Hamish or Alastair's
children
were ultra
vires
the Attorneys if the provision for Jamie was not, as I have held, and no
evidence was led as to any separate invalidity of those gifts. I conclude
that each of the material gifts was made in
valid
exercise of the EPA.
ADEMPTION
-
If both a gift by will to a donee and a later gift inter
vivos
by the testator to the same donee are (to use expressions used in
various
authorities)"pure bounty","spontaneous bounty" or"mere gifts" then
the latter gift will not be taken to be a substitute, wholly or in part,
for the former and the donee will thus be able to take both.
In the absence of special considerations such gifts will
be taken to be"pure bounty" or"mere gifts" - Pankhurst -
v-
Howell (1870)
LR 6
Ch
App p. 136. .
-
An example of a special consideration sufficient to
deny the gift the
character
of"pure bounty" is where a gift by will has
a particular purpose identified in the will itself. The language used in
the will may show that the gift is intended, for example, to meet a particular
moral obligation -
In Re Pollock (1885) 28
Ch
D 552 C.A. at
p.
556.
Another type of special consideration is found in the case
where the language of the gift is neutral as to its purpose but where the
totality of the circumstances surrounding the gift, as shown by admissible
evidence, is such as to suggest that the gift was a"portion". A portion can
be given by will or inter
vivos.
-
-
In the course of her argument Miss Sandells urges that
for a gift to be a portion the donor must be father of the donee or in loco
parentis to the donee and that a mother, such as Mrs
Cameron,
is not to
be taken to be in loco parentis to her
children
unless it is
proved
that she had undertaken the office and duty of the parent to make provision
for the
child.
There is authority which supports such a
view.
Thus in
Ex Parte Pye (1811) 18
Ves
p. 154 Lord Eldon spoke of a person in loco
parentis being"in the situation of the person described as the lawful
father
of the
child".
Such a
view
was adopted also by Stirling J in
Re Ashton
[1897] 2
Ch
p. 574 at
p. 578 when he said:-
"Prima facie the duty of making a provision
for a
child
falls on the father, but may fall on or be assumed by
some other person. I do not say that in no case and under no circumstances
can the duty fall on or be assumed by the mother of the
child;
but it
appears to me that the burden of proving such to be the case lies on those
who assert the fact so to be."
However, Stirling J was reversed on appeal without any questions
of law being discussed - [1898] 1
Ch
p. 142. Moreover, he was dealing
with ademption as between a will of 1846 and an inter
vivos
appointment of
1881, both therefore falling before the Married Women's Property Act 1882.
In Re Eardley [1920] 1
Ch
p. 397 at p. 404 Sargant J speaks
of a gift"by a father or a person in loco parentis" but almost immediately
afterwards indicates that"the matter must be regarded from a wider point of
view".
Romer J in Re Ware [1926] WN p. 163 observed that no presumption
as to double portions (which I shall discuss below) arose in the case of dispositions
made in favour of a
child
by a mother unless she had placed herself in loco
parentis to them, as to which, in that case, there was no evidence. However,
the only authority he seems to have received on the point was In re Ashton
at first instance and in any event he held in favour of ademption by another
route. There are, on the other hand, numerous authorities which are consistent
with its sufficing that the donor is a parent, whether father or mother -
see Pym -
v-
Lockyer (1840) 5 My & Cr p. 29 at p. 35 ("...
in the case of a parent, a legacy to a
child
is presumed to be intended to
be a portion ..."); Watson -
v-
Watson (1864) 33 Beav 574 at p.
575-576 ("The rule applies not only to parent and
child
..."); Pankhurst
-
v-
Howell (1870) supra at p. 137 ("... in the natural [or] assumed
relation of a parent to the legatee"); In re Pollock (1885) supra at
p. 555 ("... when a testator gives a legacy to a
child
...") and p.
556 ("where the donor is a parent or in loco parentis ...") and In
re Furness [1901] 2
Ch
346 ("when a parent by will gives a legacy to a
child
...").
-
-
Miss Sandells attempts to prove the contrary in, I think,
three ways. Firstly, she points out that by 1991, when the gifts were made,
Mrs
Cameron
had lost all testamentary or other dispositive capacity; she
can have formed no intention whatsoever in relation to the gifts; she herself
cannot have been assuming any moral or legal duty. I accept that that is
so. If it were only Mrs
Cameron's
intentions in relation to the gifts that
could be relevant then I would have to accept that the making of the gifts
was entirely devoid of any intention. However, I do not accept that argument.
Were it right then even where a father had made a will giving a
child
something
which was plainly a portion, that portion could never be adeemed by a later
inter
vivos
gift duly made on the father's behalf to the same
child
once
the father had become a mental patient, no matter how clearly that was intended.
Nor, if the father had earlier obliged himself to pay a sum to his
child,
could a simple gift to the same
child
in a later will duly made for him
once he had become a patient be taken to satisfy the earlier obligation.
In each case Miss Sandells' argument would oblige one to say that the donor
was bereft of all intention; even the presumption against double portions,
which I shall discuss shortly, would be powerless to imprint an intention
on a
vacuum.
That, to me, seems too extreme. Moreover, such a conclusion
would fly in the face of all the evidence from the Attorneys as to why,
for what purposes and upon what advice the gifts were made. The proper course,
in my judgment, is for me to attribute to Mrs
Cameron
the intentions with
which, on her behalf, the Attorneys made the gifts.
-
-
Miss Sandells, secondly, points again to the facts that
Mrs
Cameron
did not see Donald or,
very
probably, Jamie between May 1984
and her death and that she had by letter required that Donald should not
to communicate with her. If I am right in attributing the Attorneys' intentions
to Mrs
Cameron
these considerations may be irrelevant, but, even if I am
not, I do not see them as disproving that the gifts were made in performance
of the office and duty of a parent to make provision for a
child.
Mrs
Cameron
survived her husband by some 25 years. In the interval between his death
in 1967 and her incapacity in 1989 or 1990 it was to her alone to whom her
children
looked for the provision a
child
might hope for from a parent.
Whilst she had capacity she herself seems to have recognised the position
of parent in relation to a moral obligation to her sons and was seen by
her sons as a parent likely to act on such an obligation. Donald accepted
that he had received a sum from his mother which he had not asked for but
which he thought was given to him as his mother was"doing something" for
each of her sons. There was some evidence, not explored in any detail, that
she had helped each of Donald, Iain and Alastair with the purchases of their
houses. It is not as if she"cut off" Donald in 1984; she made her codicil
confirming, inter alia, the gift of residue to him, on 1st April 1989. The
picture I have is of a parent who, whilst she retained capacity, was fully
aware of and was disposed to perform whatever moral duty there is upon a
parent to provide for his or her
children.
The fact that, for particular
reasons, a parent does not, for a time, want the company of a
child
or refuses
him a loan does not prove that the parent no longer feels that moral or
legal duty to provide for him or that a gift was not in performance of that
moral or legal duty.
-
Thirdly, Miss Sandells argues that anyone who has lost
dispositive capacity is, ipso facto, not to be regarded as still being in
loco parentis. Of course, despite such loss, a mother remains a parent but,
in any event, I do not accept the argument in this context. Mrs
Cameron,
whilst still retaining capacity but foreseeing future difficulties, deliberately
entrusted her affairs to Attorneys. She did it in the one particular way
that had the result that her incapacity, were it to supervene, would not
deny them the ability to perform for her, inter alia, the moral or other
obligations falling upon her as a parent, obligations which, whilst she
had had capacity, she had performed. Where, in implementation of such a
scheme, the Attorneys then made on her behalf a provision of a kind she
might, in performance of such obligations, have been expected to make then
I would, so to speak, carry down her earlier willingness to perform such
obligations into the Attorneys disposition and would thus still see the
disposition as one by a donor in loco parentis. Such a
view
is, to my mind,
consistent with s. 13 (2) of the 1985 Act cited above.
In the circumstances I shall not regard the gifts as debarred
from being portions by reason of their being given on behalf of a mother.
-
-
If a portion is thus,
very
broadly speaking, a gift
intended to set up a
child
in life or to make substantial provision for
him or her then it may not be unreasonable in many circumstances to suppose
that the parent would have had no intention to do that twice. Double fulfilment
of the same moral obligation is to be taken not to have been intended -
In re Pollock supra at
p. 556. Thus in
Montefiore -
v-
Guedalla
supra at
p. 103 Turner L.J. said:-
"... the court will not impute to a parent the intention
twice to discharge the same obligation of providing for his
child
- a rule founded, as it seems to me, on
very
sufficient reasons; for there
can be no doubt that, in the absence of it, the affairs of families would
in many cases be involved in the utmost confusion."
In the same case at p. 100 Lord Campbell L.C. said:-
"The doctrine of ademption has been established for the
purpose of carrying in to effect the intention of fathers of families
for providing for their
children,
and of preventing particular
children
from obtaining double portions, contrary to such intention."
-
Thus there had come to be developed, as a matter of
judge-made law, a rule or presumption against double portions, a rebuttable
presumption that the donor did not intend to give two portions to the same
donee and that where he had made two gifts, both having the
characteristics
of a portion, then the latter would be presumed, absent contrary indication
in admissible evidence, to be wholly or in part in substitute for, and thus
to adeem, the former. The rule is intended to implement the presumed intention
of the giver -
Pym -
v-
Lockyer (1840) supra at
pp. 34-35.
The rule has been explained in comparatively modern times in
Re
Vaux
supra by Sir Wilfrid Greene M.R. as follows at
p. 481:-
"The rule against double portions rests upon two hypotheses;
first of all, that under the will the testator has provided a portion
and, secondly, that by the gift inter
vivos
which is said to operate in
ademption of that portion either wholly or pro tanto, he has again conferred
a portion. The conception is that the testator having in his will given
to his
children
that portion of the estate which he decides to give them,
when after making his will he confers upon a
child
a gift of such a nature
as to amount to a portion, then he is not to be presumed to have intended
that that
child
should have both, the gift inter
vivos
being taken as
being on account of the portion given by the will. When the word"portion"
is used in reference to the gift inter
vivos,
it has a qualitative significance,
in this sense, that it is not every gift inter
vivos
that will cause the rule
to come into operation. If a testator gives to a
child
as pure bounty
and by way merely of a present a sum of money, that will not have the
character
to cause the rule to come into operation. Similarly there may
be
various
reasons why the testator should give property to a
child.
He may
wish to free him from some embarrassment, or something of that kind. In
cases of that sort upon the facts a gift may be not be a portion at all,
in which case, of course, the rule does not apply."
-
I respectfully suggest that the Master of the Rolls'
reference (in what was, as to that part, an ex tempore judgment) to"He is
not to be presumed to have intended" should truly be"He is to be presumed
not to have intended" - see, for example,
Kirk -
v-
Eddowes (1844) 3 Hare
p. 509 at
p. 517 where Sir James Wigram
V-C
said, speaking of
cases where the two gifts were by instruments, that:
"... The law raises a presumption that the second instrument
was an ademption of the gift by the instrument of earlier date ..."
- see also the description of the presumption in Pym -
v-
Lockyer (1841) 5 My & Cr 30 at p. 46 as cited by Bowen L.J.
in In re Lacon [1891] 2
Ch
482 at p. 497 and the "second presumption"
he describes at p. 498. In Re Pollock (1885) 28
Ch
D 552 at
p. 555 Lord Selborne L.C. described the presumption as follows:-
"When a testator gives a legacy to a
child,
or to any other
person towards whom he has taken on himself parental obligations, and
afterwards makes a gift or enters into a binding contract in his lifetime
in favour of the same legatee, then (unless there be distinctions between
the nature and conditions of the two gifts, of a kind not in this case
material) there is a presumption prima facie that both gifts were made
to fulfil the same natural or moral obligation of providing for the legatee;
and consequently that the gift inter
vivos
is either wholly or in part a substitution
for, or an"ademption" of, the legacy."
-
The reference cited above to Turner L.J.'s remark in
Montefiore -
v-
Guedalla supra about the "utmost confusion" illustrates
the disharmony or worse in families that might be caused where, but for
the rule, the position would be that an apparently-intended equality of
treatment by a parent for his
children
in his will could be overtaken by
one or more of them being accidentally twice provided for. A
very
typical
example but rather old-fashioned example would be where a father as testator
gives substantial legacies to each of his then unmarried daughters absolutely
by his will and then, upon one of them marrying in his lifetime, provides
a like sum for her by way of marriage settlement but where the father, without
deliberately intending to upset the erstwhile equality between his
children,
neglects to amend his will. Absent special circumstances putting her to
an election or otherwise binding her in conscience to refuse it, then, without
the rule, the married daughter would, upon the testator's death, be able
to claim the legacy notwithstanding that she had earlier had the benefit
of the marriage settlement. The earlier equality of provision for the daughters
would have been overturned. The function of the rule in restoring the scheme
of equality between
children
or whatever other scheme might be found in
the earlier will is commented upon as a feature of its operation -
In
re Lacon [1891] supra p. 498 where Bowen L.J. adds:-
"...... it being the
view
of the law that equality is what
the father, in dealing with his
children,
would in most cases presumably
intend."
At p. 490 he even speaks of a"presumption in favour of
equality". So in Pym -
v-
Lockyer supra Lord Cottenham at p. 286
queried the likelihood of an intention in a grandfather who was in loco parentis
disturbing the whole scheme of distribution he had set up in his will to have
given an inter
vivos
gift without its adeeming the gift by will -"to
the necessary prejudice of all the other
children".
-
If the earlier of the two gifts is not a revocable will
but a legal obligation upon the donor - for example, his covenant with the
trustees of his daughter's marriage settlement to pay a sum to them - then
the question of whether the later gift by will was intended to meet the
same purposes as the former covenant and is on that account to be a substitute
for it is generally referred to as a question of"Satisfaction". If, however,
the earlier gift is by a will as to which the donor is under no
legal
obligation and the latter is a gift inter
vivos
the corresponding question
is generally referred to as one of"Ademption". Although the principles of
Satisfaction and Ademption are not dissimilar it is clear upon the authorities
that it is a good deal more difficult to prove a case of Satisfaction than
of Ademption -
Lord
Chichester
-
v-
Coventry (1867) Ex I App p. 71 HL
at
p. 82, 87. I shall confine my observations to ademption as
that alone is the topic relevant to the case before me.
-
Once one has double portions (which itself involves
consideration of the donor's intentions) then whether or not there is ademption
depends upon ascertaining the testator's intention at the time of his making
of the latter, the inter
vivos,
gift -
In re
Vaux
supra at
p.
483. The rule against double portions is, in effect, no more than one
way of supplying an intention to the testator by ascribing it to him by
way of rebuttable presumption -
Re Eardley supra at
p.
405. There are repeated references in the cases, and at all levels,
to the crucial importance, in relation to whether or not there should be
ademption, of the donor's intention - see
Shudal -
v-
Jekyll (1742) 2
Atk 516 at
p. 517, 518;
Pym -
v-
Lockyer (1840) My & Cr
30 at
p. 34, 35, 47;
Montefiore -
v-
Gueddla (1859) de GF &
J 93 at
p. 100;
Lord
Chichester
-
v-
Coventry (1867) 2 E &
IR App 71 at
p. 82, 86-7;
McLure -
v-
Evans (1861) 30 LJ NS
Ch
295 at
p. 297;
29 Beav 422 at
p. 425;
In
re Lacon [1891] 2
Ch
482 C.A. per Bowen L.J. at
p. 497, 498;
per Kay L.J. at
p. 500, 501;
In re
Vaux
[1939] 1
Ch
465 C.A. per
Sir Wilfrid Greene M.R. at
p. 483.
-
The donor's intention does not need to have been expressed;
it may be"irresistibly drawn from all the circumstances of the case" -
Re
Eardley supra at
p. 405. Whilst care has to be taken not to
offend the parole evidence rule where the gifts involve the construction
of written instruments - see e.g.
Kirk -
v-
Eddowes at pp. 516-517
- oral evidence has been"constantly admitted in all these cases" -
Shudal
-
v-
Jekyll (1742) supra at
516.
-
In
Re Shields [1912] 1
Ch
p. 551 Warrington J,
dealing with a case which did not involve a portion, said at
p. 601:-
"........... By ademption is meant I think in this context a
transaction to which the donee as well as the donor is a party."
He held that as the testator's intention had there had not been
communicated to the legatee in his lifetime there was no ademption. Where
the inter
vivos
gift is direct to a donee or is made as part of a Marriage
Settlement it is likely the donee will have been known of it but, on the other
hand, Twining -
v-
Powell (1845) supra is an example of an ademption
by an inter
vivos
gift of which there was no evidence that the donee had any
knowledge. It was not cited in Re Shields. In Re
Vaux
[1939] supra
there appears to have been no reliance, in refusing ademption, upon the donees
taking under the inter
vivos
settlement having had no knowledge of it, although
there appears also to have been no evidence that they did have knowledge of
it. It is also consistent with Lord Selborne's judgment in Re Pollock (1885)
supra at p. 556 that the donor's declarations need not be communicated
to the donee. As ademption of a gift by will by way of a later inter
vivos
gift is a working out of the intention of the donor there would seem, in my
judgment, to be no need for the donee either to know of the prospective gift
by will or to be party to or to know of the inter
vivos
gift - see also Re
Eardley supra at p. 410. The donee's knowledge of the gift by will
or of the inter
vivos
gift may be a feature affecting whether, in conscience,
he may accept both the legacy and the gift but I do not see that a donee's
knowledge either of the terms of the earlier will or of the later inter
vivos
gift should be a necessary condition for the ademption of one portion by another.
-
It is not enough to deny ademption merely to show that
the limitations of the portion under the will are different from those in
the later inter
vivos
gift -
Re Furness supra at
p. 349. Slight
differences between the two gifts have frequently been overlooked -
Lord
Chichester
-
v-
Coventry supra. Where the two provisions are of a different
nature that affords some intrinsic evidence that both of the two portions
were intended to be given and that therefore there should be no ademption
-
Lord
Chichester-v-
Coventry at
p. 83 - but there is no reason
given to suppose that such intrinsic evidence is of itself conclusive and
there is no reason, either, to suppose it cannot be overborne by other indications.
-
Where there is real difference between the two gifts
by way of portion the question of ademption or not becomes a question of
whether the donor might reasonably have supposed the two gifts, despite
the differences between them, to be,
very
broadly, the same -
Lord
Chichester-v-
Coventry (1867) supra 71 at
p. 88. Put another way, are the differences
so marked that the notion that one gift could have been intended as a substitute
for the other was effectively excluded? -
Lord
Chichester
-
v-
Coventry
supra at
p. 89.
-
That question has been answered so as to permit ademption
notwithstanding that there were
very
considerable differences between the
two gifts. Thus, for example, in
Earl of Durham -
v-
Wharton (1836) 3
C & Finelly 146 WL, brother of JL, gave real estate to JL but
charged
it with a legacy of £5,000 to JL's daughter, Susan, then unmarried. JL by
his will later gave £10,000 on trust for Susan for life with remainder to
her
children
and provided in terms that the £10,000 was to be additional
to the gift to Susan (the £5,000) provided by his brother's will. Susan
then married and JL advanced £15,000
to her husband as a marriage
portion. The articles of marriage expressly provided that such £15,000 was
to be in satisfaction of what would come to her (£5,000) under WL's will.
JL then died. The question arose whether the £15,000 advanced by JL to Susan's
husband, Mr Wharton, adeemed only the £5,000 coming under WL's will or also
the £10,000 provided for under JL's will. Plainly, as the marriage articles
specifically provided that the £5,000 was to be thereby adeemed, it was
arguable, by reference to the "expressio unius" aid to construction, that
JL could not have intended the £10,000 provided by his will to be adeemed.
More significantly for the purposes of the present argument, JL's will gave
the £10,000 in trust for Susan for life and after her death for her
children
(by whatever husband) whereas under the marriage articles the money was
given
to her husband as a marriage portion in consideration of which
her husband was to secure to her, during their joint lives, £500 p.a. for
pin money, a jointure of £1200 p.a. and portions for the daughters and younger
sons of
their marriage - see the earlier report in
(1832) 5 Simons
297 at
p. 299. It will be noted, leaving aside the different
identity of the recipient of the gifts, that quite different persons might
take under the gift of £10,000 by will (e.g. Susan's
children
by whatever
husband) than could take under the Marriage Articles (Susan's daughters
and younger sons by Mr Wharton). Accordingly it was argued that the limitation
under JL's will were widely different from those applicable under the marriage
settlement. However, as to that Lord Lyndhurst said at
p. 154:-
"...... I apprehend that this will not prevent
the application of the principle of ademption and that the authorities
are all the other way".
At p. 155 he cites a passage from Lord Redesdale as to
variance
between the limitations of one gift and another where Lord Redesdale
said :-
"That is a circumstance which may avail to prove it not
to be in satisfaction of a debt or covenant but never of a legacy given
as a provision".
Lord Lyndhurst concluded the point by saying at p. 155-6:-
"I conceive, therefore,
that the circumstance of the limitations being different does not at all affect
the question".
The House of Lords, reversing the
Vice-Chancellor
(who had been
affirmed by the Lord
Chancellor)
ruled that the presumption against double
portions applied and that the gift of £10,000 by JL's will had been adeemed.
-
-
"In cases of satisfaction the person intended
to be benefited by the covenant ........ and the persons intended to be
benefited by the bequest or devise ...... must be the same. In cases of ademption
they may be, and frequently are, different".
Speaking of such a difference in relation to a gift on marriage,
he continued at p. 92 to say:-
"........ the law
very
properly and in accordance
with the ordinary usage of mankind, considers that on the marriage of
a
child
the settlement for that
child
and the
children
of the marriage
is a settlement for the benefit of the
child
of the settlor. The consequence
is, that, in all cases of ademption, a bequest of a sum of money to a
child
absolutely, is adeemed by the settlement of that or a larger
amount on the marriage of that
child;
if a smaller amount it is an ademption
pro tanto".
There is even a rather extreme example of ademption being
decreed where the provisions of the two gifts differed greatly in that the
earlier gift by will had a remainder to a third party - a
charity
- which,
upon the ademption of that gift by a later gift inter
vivos,
was totally denied
effect, a result which was described as a question of some embarrassment -
Twining -
v-
Powell (1845) Cas
Ch
p. 262.
-
Miss Sandells makes the powerful point that it is fundamental
to the operation of the rule against double portions that the two gifts
must be in favour of the same donee. She cites, firstly,
Ravenscroft
-
v-
Jones (1864) supra. It is in some respects an unsatisfactory case.
A father by his will bequeathed £700 to his then unmarried daughter. Later
two inter
vivos
gifts were made; one, of £100, was plainly not a portion.
The other, of £400, was not given to the daughter but to her husband. The
testator said to the husband that he hoped the gift would do him good. Sir
John Romilly M.R. held at first instance that the £400 was not given to
the daughter, even nominally; he could not hold it was a gift to the daughter.
He said at
p. 671, with my emphasis:-
"I admit that if the money had been given to the daughter,
either directly or indirectly, or settled partly for her benefit,
I might then infer it was intended as an advance to her. But there is nothing
of the sort here."
The gift, he held, was to the husband himself to do him good
in his business. The passage cited suggests that it may suffice, for the applicability
of the rule against double portions, for gifts to be taken to be in favour
of the same donee if the later gift is at least partly for the benefit
of the donee of the former. However, why I described the case as unsatisfactory
is that upon its appeal to a Court of Appeal of two members at 4 De J &
S 224 at p. 228 Knight Bruce L.J. said:-
"With respect to the ......... £400, I prefer to express
no opinion as to the ground upon which, to a great extent at least, the
Master of the Rolls appears to have proceeded; namely that the daughter
herself was the legatee, while the payment was made to the husband of the
daughter. I do not rely upon that ground nor on the other hand do I express
any dissent from it."
He ruled, rather, that on the evidence the £400 was intended
as"a simple gift" meaning, I apprehend, that it was not a portion at all but
pure bounty. Turner L.J. doubted the
view
that the £400 was not in partial
ademption of the legacy but, presumably because the Court was of only two
members, added:-
"My doubt on this point, however, will not
affect the result of the appeal which is decided by the agreement of [Knight
Bruce L.J.] with [the Master of the Rolls] and the decision of the [Master
of the Rolls] will consequently be affirmed.
-
I do not, of course, doubt that the rule against double
portions requires as a condition of its operation that there be two portions
which, to some extent at least, benefit the same person but Ravenscroft
supra does not address the crucial question of at what point differences
between the two gifts deny them the description of being double portions
benefiting the same person. It is, though, consistent with a notion that
the portions may be double for the purposes of the rule when one is to A
and the other is partly for the benefit of A.
-
Secondly, Miss Sandells relies upon
Cooper -
v-
MacDonald
(1873) LR 16 Eq 258 where a testator by will gave a share in his residuary
estate to his then unmarried daughter and later, under a marriage settlement
to which he was party, gave two gifts, namely £1,000 to the prospective
husband for his own use and benefit -
p. 261 and
p. 262 -
and £4,000 (which he covenanted would be paid within his lifetime or within
2 years after his death) to be held as to one moiety to pay the income to
his daughter for her life and then to her husband for life and as to the
other moiety to the husband for life and then to the daughter for life,
with
various
remainders to their
children,
if any, and an ultimate remainder
back to his own estate. There were thus, in a sense, three separate gifts,
the gift by will, the £1,000 paid later to the husband absolutely for his
own use and benefit and the £4,000 covenanted to be paid later still and
provided to be held on the trusts I have mentioned. As to the £1,000, it
was expressly paid to the husband for his own use and benefit. There was
no gift to the husband in the will which that inter
vivos
gift to him could
adeem. There was no exploration in the case of the circumstances in which
an advance to B (who is owed moral or legal duties by A) could be taken
to be a portion for A and thus would adeem an earlier legacy to A.
Lord
Durham -
v-
Wharton supra appears not to have been cited. I shall revert
to a citation from
Cooper -
v-
MacDonald below.
-
Whilst it is generally in marriage settlement cases
before the Married Women's Property Act that one encounters ademption taking
place by reason of the rule against double portions notwithstanding substantial
differences between the two gifts one finds no expressed explanation of
why that was so. It must be that the reason was regarded as self-explanatory.
I cannot think that it would have gone without saying in the authorities
that the donee-daughter had approved, or even had known, at or before the
Marriage Articles or Marriage Settlement, of the provisions made therein.
Still less that she would, at that time, have known of the provision made
for her in the earlier will and have known that the marriage provision was
intended to reduce what she might otherwise have received under the will.
Some of those facts would, no doubt, sometimes or even commonly be present,
but if they were to have been taken into account by the Court they would
be likely to have been expressly mentioned as they were not
necessarily
the case. Again, there appears no calculation of whether the person
chiefly
benefited is the same in the case of both gifts, a calculation that would,
in some cases, be one of some actuarial nicety. There is, as I see it, only
one particular feature of such cases which could be regarded as a self-explanatory
reason for such treatment that, for example, an absolute gift by will to
a daughter could be adeemed by a later gift by way of a marriage settlement
making other and lesser provision for her. That particular feature is that
in the surrounding family, legal and economic circumstances of the day the
latter gift was recognised by the court to have been likely to have been
regarded by the parent-donor as a substantial provision made with benefits
in mind which included the substantial benefit of the
very
same person,
the daughter. The law was merely recognising that, to use Lord Romilly's
phrase,"in accordance with the ordinary usage of mankind" a
child
of the
donor could properly be recognised as being substantially benefited, so
as to bring the rule against double portions into play, by another form
of family provision than by the more direct and (in terms of receipt by
the daughter) more favourable gift provided in the antecedent will. So in
Cooper -
v-
MacDonald (1873)supra at
p. 268 Lord Selborne at
first instance observed (with my emphasis):-
"The Court has been in the habit of
disregarding differences in the manner of settling gifts on a
child
or
child's
family by different instruments which raise a question of ademption
or satisfaction, when such differences appear to be in their nature consistent
with a presumption that the one gift is meant to be substituted for the
other".
-
Given that a gift to grandchildren would not normally
be a portion, when Lord Selborne continued by adding:-
"But I am not aware that this presumption
has ever been held to arise (in the absence of express direction) when
the persons taking under the several instruments are themselves altogether
different"
he must, in the light of the immediately preceding sentence,
have been contemplating that a parent's gifts to a
child
on the one hand and
to the
child's
children
on the other would not necessarily be regarded as
being to donees who were"altogether different" - consider also In re Furness
[1901] supra at p.349.
-
If, as the authorities make clear, both ademption and
whether a gift is a portion in relation to a particular donee so crucially
depends upon the donor's intent then, so long as the gifts are otherwise
capable of being portions and there is nothing in the admissible evidence
directly or by inference pointing to some other intent, I see no reason
in principle, so long also as the law is able on the facts to recognise
that the donor was likely to regard each of the two gifts, in the surrounding
family, legal and economic circumstances, to be making provisions both of
which were intended to include the substantial benefit of the
very
same
person, why both gifts should not be regarded as portions and why ademption
should not occur by reason of the rule against double portions. I see that
as possible even where, outside marriage settlement cases, the provisions
of the two portions differ, even to the extent of the primary or direct
recipients being different. To that limited extent, where both gifts are
potentially portions, a legacy to A may, by reason of the rule, be in some
circumstances adeemed by an inter
vivos
gift the recipient of which is B.
At least that can be so where the difference between A and B in relation
to the donor is merely between a
child
and a
child
of that
child
and where,
in the circumstances, a gift to the grandchild can fairly be seen as intended
for the substantial benefit of the
child.
-
There is nothing at all exceptional in the law recognising
that a disposition can be for a person's benefit even though it does not
come to his hands. Thus in the context of statutory or express powers of
advancement, an exercise of the power can be regarded as for the benefit
of the object of the power where his creditors are thereby paid off; equally
an exercise can be recognised as being for the benefit of a woman when the
advance is made to set up her husband in business - see
Lowther-
v-
Bentinck
(1874) L.R. Eq 166 and
Re Kershaw's Trusts (1868) L.R. 6 Eq 322
cited by
Viscount
Radcliffe in
Pilkington -
v-
Inland Revenue Commissioners
[1964] AC 612 which was cited by both Miss Sandells and Mrs Peacocke.
In the context of a power of advancement it is no bar to an exercise of
the power that the primary object neither requested nor consented to it
and the House of Lords, reversing the Court of Appeal, held that the power
was not limited to the conferring of benefit"personal to the person concerned
in the sense of being related to his or her own real or personal needs"
-
p. 639. The law there recognised the "paternal" nature of the power
-
p. 638. In
Kershaw's Trusts supra Sir Richard Malins
V-C
took the
view
that in the particular circumstances what was for the benefit
of the husband was for the benefit of the wife. I see no reason why similar
broad considerations of a family nature should not be in mind when it comes
to be considered whether, notwithstanding the differences between them,
family gifts of a kind capable of being portions may be regarded as being
double portions in the sense of benefiting the same person, with the consequence
of attracting the presumption to which I have referred. There can, in other
words, be cases in relation to this presumption, just as there may be in
relation to powers of advancement, when something coming from a grandparent
for the benefit of a grandchild may be taken to be for the benefit of the
grandchild's parent.
-
Firstly, the rule against double portions is entirely judge-made
and is thus, within familiar limits, capable of being reformed in the course
of decided cases. It was, for example, for a long time thought that the rule
applied so that a larger gift by will would be totally adeemed by a later
and smaller inter
vivos
gift. There was a long line of cases beginning with
Hoskins -
v-
Hoskins (1706) Pr.
Ch
263 as cited by Lord Cottenham L.C.
in Pym -
v-
Lockyer (1840) supra which had seemed to suggest that that
was so until Lord Cottenham, after a
very
full examination of the decided
cases, determined in Pym -
v-
Lockyer supra that ademption was in such
a case to operate only pro tanto. Even as late as 1885 it was still being
held at first instance that ademption by a smaller gift might be total rather
than pro tanto - see In re Pollock (1885) supra at p. 554, 555 (where,
below, Counsel had assumed that to be the case). Another comprehensive reform
occurred, as I noted earlier, when, in Montefiore -
v-
Guedalla (1859) supra,
there was destroyed the earlier
view
that because such a bequest was of an
uncertain amount a bequest of residue or of a share of residue could not be
adeemed by a later inter
vivos
gift; as to that earlier
view
see Mr Jessel's
argument at p. 97. Against such a background the rule against double
portions has to be seen as not immutably fixed but as still capable, within
the outer boundaries of its principles, of being developed incrementally by
the courts.
-
-
I am therefore untroubled by the absence of direct authority
of the kind which Miss Sandells points to and untroubled, too, by the
view
that I may be applying the rule against double portions in a way as yet
unseen in the cases, all of which are over 50 years old. The rule is amenable
to reshaping by the courts and should be reshaped to coincide with"good
sense" and the "ordinary transactions of mankind" as they are from time
to time seen to be. I regard the
view
I have expressed in paragraph 76
above as being no more than such a reshaping.
-
Another powerful objection which Miss Sandells raises
is that if, in some such way, a gift by will to A were to be adeemed by
a gift of which, she says, the recipient is B, one would pro tanto have
revoked the will without observation of the formalities of a due revocation
made necessary by the Wills Act. However, where the rule against double
portions applies it has long been recognised that the effect of the later
gift inter
vivos,
so far from causing a revocation of the will, is to bring
about a position in which, to the extent of that later gift, there has been
an acceleration of the enjoyment of the provisions of the will - see
Rosewell
-
v-
Bennet (1744) 3 Atk 77 per Lord Hardwicke;
Kirk -
v-
Eddowes supra
at
p. 519;
Montefiore -
v-
Guedalla supra at
p. 102;
In re Furness supra at
p. 349;
In re George's Will Trusts
[1949] supra at
p. 162 (where Jenkins J spoke of the testator,
by his inter
vivos
gift of a portion,"as it were anticipating his demise
and putting [the devisee] in immediate possession of part of what he would
in due course have taken under the testator's will").
-
-
-
Accordingly, the two most powerful objections raised
by Miss Sandells to the applicability here of the rule against double portions
- that the portions were not double as they are to different persons and
the point which I have called the Wills Act point - will in my judgment
both be overcome if, in the surrounding circumstances I have described,
the law is properly able to recognise that the donor was likely to have
regarded each of the gifts as making provisions both of which were intended
to include the substantial benefit of the
very
same person.
-
As to that, and subject only to the consideration that
the gift was by a mother not a father, it has not been argued that the gift
by will of an equal quarter share of residue to Donald (and, were he to
have died in his mother's lifetime leaving a wife surviving him, then to
his wife for life and, subject thereto, to any his
child
or
children
living
at Mrs
Cameron's
death who should attain the age of 18) was not a portion.
It is substantial in amount and the fact that when the will was made the
amount represented by the gift was unascertainable has long since not been
a bar to its being a portion. I have already held that it is not debarred
by reason of its being a gift from a mother rather than a father. Whether
it proved to be a portion for Donald or for a wife or
child
of his depended
upon who ultimately took under the gift (as was the case under the discretionary
trusts in
Re
Vaux
supra at
p. 482). In the event it was a
portion for Donald.
-
As for the inter
vivos
provision, the relevant circumstances
were in my judgment as follows. The gift was substantial in amount; in size
it was well able to amount to being a portion. It came from Mrs
Cameron,
the mother, but in circumstances such that that did not of itself bar its
being a portion. When it was made Donald was divorced. He was unemployed.
He was living on State support. He had, improvidently, wholly or
very
nearly
exhausted such means as had come to him from his earlier substantial earnings
and from family resources. He was making and was able to make no financial
provision for his former wife, Helen, or his son, who was in Helen's care.
Helen would be likely to proceed against him for such provision if only
he had been known to have acquired any means and had thus become worth suing.
It is to be noted that when she did learn he stood substantially to benefit
from his mother's will she did begin proceedings. If inter
vivos
provision
was made directly to Donald it was thus highly
vulnerable
to being collected
instead by Helen. Yet Helen was not a beneficiary under the will and, as
Mrs
Cameron's
codicil was made after the divorce but without the will being
amended to provide for Helen, it could be taken that Mrs
Cameron
had herself
had no intention of benefiting Helen after the divorce. Donald had himself
been privately educated and in respect of the costs of that his parents
had been financially assisted by his grandparents. He had no objection to
private education for his son who, so far as Helen (as the parent having
care of Jamie) maintained, had been unhappy whilst at or had felt ill-served
by State education. Donald wanted the best for his son He could not hope
himself to provide a private education for Jamie. A payment directly made
for Jamie's education at a boarding school would pro tanto discharge Donald's
moral or legal duty to maintain Jamie and to see to his education, would
reduce the likelihood of his being sued by Helen on Jamie's behalf and would
also deny the possibility of appropriation of some or all of the money by
Helen herself. A payment direct to Donald might have served to reduce or
cut off the benefit he was receiving from the State.
-
-
Miss Sandells argues, as another factor against ademption,
that no
value
or no clear
value
could at any time be put on the
value
to
Donald of the provision for Jamie's education or, indeed, of its
value
to
Jamie. I would add that in 1991 nor, either, could a clear
value
be put
on Donald's prospective quarter share in his mother's estate as its
value
was then unascertainable and, moreover, Donald had to survive his mother
to enjoy it. However, in none of the family marriage settlement cases is
there any attempt at an evaluation of just what this life interest or that
jointure may be worth as against the
value
of an earlier legacy and I see
this regard to
values
or relative
values
as involving too mechanistic a
view
of ademption which, as the cases shew, is, more than anything, a matter
of intention, presumed or, as I shall next turn to, actual.
-
There are, as Miss Talbot Rice urges, cases in which
there has been ademption without the rule against double portions being
brought into play but where the testator's intention, not presumed but proved
in admissible evidence, has shown that ademption is appropriate. Thus in
Re Eardley supra Sargant J said at p. 404:-
"It is clear that in all cases of ademption or satisfaction
the question is one of intention to be gathered in
various
ways."
After then describing the circumstances in which the law itself
raises certain presumptions he continued, at p. 405, in a passage to
part of which I have already referred, as follows:-
"But those presumptions do not by any means
cover the whole ground; they are only some of the methods of ascertaining
the intention, which is to be gathered from all the circumstances of the case
..."
At p. 406 he said that the relevant intention"Can be
arrived at from a consideration of the whole circumstances of the case". On
the particular facts of that case, which included the earlier careful provision
by a testatrix of equality amongst her
children,
the learned Judge said at
p. 408:-
"... no one, whether lawyer or layman, can come to any other
conclusion than that the intention of the testatrix in executing the last
deed poll was to preserve the equality which had hitherto been maintained
and not to disturb it in the flagrant way which this latter alternative would
involve."
-
In so concluding he did not rely at all on any presumption
-
p. 409. Nor did he rely on any such consideration as that the donee
of the inter
vivos
gift had requested it or had accepted it on terms that
bound him in conscience to accept also ademption; at
p. 410 he held,
commenting on
Re Ashton supra, that:-
"... In my judgment the acceptance by the appointee of the
substituted provision was not a necessary condition of arriving at the
conclusion at which the Court of Appeal arrived. All that was necessary
to be shown was a clear intention of the testatrix to make the appointment
by way of satisfaction or antecedent satisfaction of the provision made
by her will."
In consequence in Eardley the appointment by a deed
of 1899 to one of the
children
was held to be intended to be in satisfaction
of what had been appointed to him by will.
-
In
re Ware supra Romer J followed Sargant J's
decision in
Re Eardley supra and again found in favour of ademption
without any reliance upon the presumption introduced by the rule against
double portions. Neither Sargant J nor Romer J was, in so deciding, acting
without precedent; as long before as 1742 Lord Hardwicke as Lord
Chancellor
had in
Shudal -
v-
Jekyll supra p. 517 described the second question
before him in a case concerning a later inter
vivos
gift by a testator as
whether:-
"... if there is not a general presumption,
then whether there is anything in the cause which amounts to a proof that
he intended it as a satisfaction"
see also In re Pollock (1885) supra at p. 556.
-
If I am therefore entitled to determine the question
of ademption or not by reference to actual intentions and surrounding circumstances
then first of all I would notice the background factors which I have already
described in paragraph 86. In addition I would notice the inter
vivos
gifts
to Hamish and to Alastair's
children,
both of which were intended by Mrs
Cameron
(by the Attorneys) to adeem and were accepted by those brothers
to have adeemed their respective shares of residue (neither of which ademptions
has been
challenged
on Donald's behalf). I notice also Mr
Phillips'
clear
advice to the Attorneys that the gifts would adeem the respective
children's
shares of residue and the principle, which the Attorneys regarding as a
guiding principle, that their mother would wish to treat all her
children
equally. The Attorneys plainly intended that the provision for Jamie should
adeem Donald's inheritance. It is plain also that they would not have made
the gifts, including the provision for Jamie, had it not been understood
that ademption would result. Donald himself believed that his mother always
wanted to treat her sons equally. Moreover, an unusual feature, in contrast
with the usual case where a testator who, having, perhaps, given no particular
indication in his will or at the time of the inter
vivos
gift of his intention,
may leave little trace of what his intentions were, is here that, if I am
right in attributing the Attorneys' intentions to the testatrix, one has,
in effect, a testatrix who is still available to state what her intentions
had been. Thus the alleged intentions can be subjected to cross-examination.
The Attorneys'
views
have not merely been stated but have been tested by
cross-examination and are accepted by me to have been as the Attorneys said
they were. If, to adopt the dictum in
Lord
Chichester
-
v-
Coventry supra
at
p. 83, differences between a gift by will and a gift inter
vivos
may provide intrinsic evidence that both were intended, I would hold
here that such intrinsic evidence was comprehensively overborne by evidence
that ademption was intended.
-
Miss Sandells advances an argument that Re Eardley
and Re Ware are anomalous. Each has, however, survived over 70 years
without material criticism and I have no good reason not to follow them.
I would, moreover, be uneasy were I to extend the list of cases in which
the Courts have felt constrained to deny effect to clear intentions clearly
expressed.
In the circumstances, if I may respectfully adopt the language
of Sargant J in Re Eardley, no one, whether lawyer or layman, could
come to any conclusion other than that the intention of the testatrix in making
the provision for Jamie, as also in making provision for Hamish and for Alastair's
children,
was that the stirpital equality amongst her
children
provided for
in her will was not to be disturbed in the way which the argument on Donald's
behalf would involve. The Attorneys saw the provision for Jamie as of benefit
to Donald in that his moral or legal obligation to his only
child
was thereby
satisfied without the risk (as Iain put it) that"matrimonial proceedings by
Helen would subsume the whole of Donald's share of his inheritance". To that
extent the provision for Jamie was not in revocation but in anticipation of
the will and thus was free of the Wills Act point.. Accordingly, irrespective
of the presumption against double portions, I hold that the provision for
Jamie's education pro tanto adeems Donald's share of the residue of his mother's
estate.
LIABILITY OF THE EXECUTORS
-
If I am right in my conclusion as to the
validity
of
the gifts made under the EPA and as to ademption then the questions of whether
there is any liability on the Executors' part for failing to get in assets
distributed by the Attorneys without authority or for distributing on the
footing that there had pro tanto been ademption of the residuary gifts do
not arise. However, even if I am wrong as to either of those
chief
conclusions,
there are substantial arguments, bolstered by authorities, raised on behalf
of the Executors by Miss Talbot Rice and Mrs Rosen Peacocke and further
arguments as to what the appropriate quantum of liability would be even
if, which is denied, there were to be any such liability. Such further arguments
as to quantum were informally agreed between Counsel, during the course
of the hearing, to be put aside until after my judgment on the principal
questions. However, the better course, in my
view,
is to put aside all questions
of liability of the Executors for the time being. Firstly, I have an impression,
rightly or wrongly, that Miss Sandells curtailed her argument not merely
on quantum but also on the question of the Executors' liability in reliance
upon the informal agreement. That could easily be corrected by my calling
for further argument but, more importantly whilst, as I have said, if I
am right the questions do not arise, if I am found to be wrong, then because
the Executors' position depends in part on the reasonableness of the
views
they entertained it would be impossible for me to assess the Executors'
position without knowing how comprehensively, in what respects and why I
shall have been found to be wrong, information which, at this juncture,
I cannot be expected to supply. For these reasons I shall express no conclusions
on what the liability of the executors would be were I to be wrong on the
issues I have decided.
RELIEF
-
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