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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Public Trustee v Harrison & Ors [2018] EWHC 166 (Ch) (02 February 2018) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2018/166.html Cite as: [2018] EWHC 166 (Ch) |
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BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES (ChD)
PROPERTY TRUSTS AND PROBATE LIST
Rolls Building Fetter Lane London EC4A 1NL |
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B e f o r e :
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THE PUBLIC TRUSTEE (as trustee of the Charles Willis Harrison 1924 Settlement) |
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- and - |
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GUY CHARLES DAVID HARRISON |
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JUDY TESSA ROSEMARIE MACKAY |
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ANNE-MARIE HELEN HARRISON-MILLS |
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Ms. Sarah Bayliss (instructed by McLoughlin & Co.) for the First and Second Defendants
The Third Defendant appeared in person, represented by her husband Dr. Harrison-Mills
Hearing dates: 17 January 2018
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Crown Copyright ©
Mr. Justice Marcus Smith:
A. INTRODUCTION
i) Obviously, the First and Second Defendants do not accept indeed, they oppose the claims advanced by the wider class.ii) Of the remaining 29 members of the wider class, some provision was made as to their representation in an order of Deputy Master Cousins dated 27 July 2017. Essentially:
a) The persons listed in Schedule 1 to the order (the "non-opposing beneficiaries") do not oppose the Disputed Share passing to the First and Second Defendants. There is no reason for these five non-opposing beneficiaries to be joined to the proceedings.b) The first 15 persons listed in Schedule 2 Part A to the order consent to the sixteenth person there listed (the Third Defendant) representing them; to her doing so without herself being legally represented; through her husband, Dr. Harrison-Mills. By paragraph 11 of the order, the Third Defendant was appointed under CPR 19.7(2)(d)(ii) to represent these 15 persons.c) That leaves 8 persons of the wider class who have neither agreed to the passing of the Disputed Share to the First and Second Defendants nor agreed to being represented by the Third Defendant. Plainly, these persons need to be bound by any order consequential upon this judgment. Accordingly, at the outset of the hearing before me, I ordered that the Third Defendant be appointed under CPR 19.7(2)(d)(ii) to represent these persons also.
B. THE NATURE OF THE DISPUTED SHARE
i) The "Life Tenant's Fund". The "Life Tenant" is defined as Jeannette Harrison (clause 1(2) of the Scheme). The assets comprising the Life Tenant's Fund are set out in Part I of the First Schedule to the Scheme.ii) The "Appointed Fund". The assets comprising the Appointed Fund are set out in Part II of the First Schedule to the Scheme.
iii) The "Released Fund". The assets comprising the Released Fund are set out in the Second Schedule to the Scheme.
i) First, the opening words of clause 3 of the Scheme stipulate that the interest of David Harrison (and, of course, those other persons listed in clause 3) arises as if Jeannette Harrison had by her will appointed that the Appointed Fund be held on trust. This is a reference to Jeannette Harrison's power of appointment under clause 18(ii) of the Indenture. It will be necessary to revert to this provision (and to related provisions under the Settlement) in due course.
ii) Secondly, and reinforcing the opening words of clause 3, clause 3 ends with the following proviso:
"PROVIDED ALWAYS that the said share shall not vest absolutely in the said appointees but shall be held by the Trustees upon the trusts and with and subject to the powers and provisions affecting the same under clause 18 of the [Indenture]."
C. THE APPROACH TO CONSTRUCTION
D. THE TRUE CONSTRUCTION OF THE SETTLEMENT
i) The first, under clause 18(i), arises where Jeannette Harrison predeceases the settlor.ii) The second, under clause 18(ii), arises where Jeannette Harrison survives the settlor.
i) Within this class, the intention was that one of the nephews/cousins Ralph John Harrison should not benefit. He but not his issue is excluded.ii) Although the power of appointment defines a restricted class of object, within that class, Jeannette Harrison's power of appointment was relatively unfettered: she could exclude persons altogether and/or she could make unequal allocations.
"(A) No appointment under this power shall have any further or other operation than to determine which of the objects of the power shall be entitled to the Trust Fund and (if more than one) in what shares and(B) The Trust Fund or the shares thereof (according as the appointment may be) shall be retained by the Trustees upon such trusts and with and subject to such powers and provisions as would for the time being be applicable to a share appropriated by them to the object or objects in question or to the parent of such object or objects under the trusts in default of appointment hereinafter contained."
i) Clause 19 defines the manner in which the Fund would be shared if no appointment were made. Clause 19 does not specify the terms of such trusts, but merely the beneficiaries in default of appointment. As such, clause 19 is not the provision that supplies the terms of the trusts referenced in proviso (B) of clause 18(ii). It simply identifies the default objects.ii) It is clause 20 that contains the declaration of trusts:
"The shares so appropriated and the sub-shares thereof and the shares of such sub-shares and the income thereof respectively shall be held by the Trustees upon the same trusts and with and subject to the same powers and provisions as are by and in Clauses 10 to 17 inclusive of these presents declared and contained concerning the original shares sub-shares and shares of sub-shares thereby dealt with as if such clauses were here repeated but giving to the said nephews and nieces of the Settlor (other than the said Ralph John Harrison who shall have no interest in or power over the Trust Fund or any part thereof) such interests and powers in and over their respective shares as are thereby given to the children of Miss Harrison in and over their respective shares and to the children grandchildren and issue of such nephews and nieces (including the children grandchildren or issue of the said Ralph John Harrison by his said wife but excluding all other issue of his) such interests and powers in and over their respective shares sub-shares or shares of such shares as are thereby given to the children grandchildren and issue of the children of Miss Harrison in and over their respective shares sub-shares or shares of sub-shares and making such other verbal alterations as are necessary for giving effect to this clause."
i) It is clear that a "share" describes the interest of a child or of children of Jeannette Harrison's in the Fund: see, in particular, clauses 7(i), 9 and 10 of the Indenture. It is clear that even if Jeannette Harrison had only had one child, that child's interest would properly be defined as a "share": see clause 10.ii) It is clear that a "sub-share" describes the interest of a grandchild in a share, whose interest arises by way of the operation of clause 12. Thus, where a child of Jeannette Harrison's holding a share dies, that particular share is then held on trust for that child's children, each (grand)child holding a sub-share. Again, it is clear that even if there were only one grandchild, that grandchild's interest would properly be called a "sub-share".
iii) "Shares of sub-shares" arise in the circumstances described in clause 14, which makes provision for the substitution of great-grandchildren in certain circumstances.
i) The various nephews and nieces of the Settlor (or cousins of Jeannette Harrison) are to be treated for purposes of the trusts imposed over their interest as if they were children of Jeannette Harrison. The words in clause 20 make this clear (" but giving to the said nephews and nieces of the Settlor such interests and powers in and over their respective shares as are thereby given to the children of Miss Harrison in and over their respective shares "). Thus, to the extent appointed, such a cousin would hold a "share". Had he been appointed, the father of David and Jeffery James Harrison would have held a "share" in the Fund.ii) The next words of clause 20 are as follows:
" to the children grandchildren and issue of such nephews and nieces (including the children grandchildren or issue of the said Ralph John Harrison by his said wife but excluding all other issue of his) such interests and powers in and over their respective shares sub-shares or shares of sub-shares as are thereby given to the children grandchildren and issue of the children of Miss Harrison in and over their respective shares subshares or shares or sub-shares ." (emphasis added)
It is plain that the issue of these nephews and nieces of the settlor (or cousins of Jeannette Harrison) are to be treated for purposes of the trusts imposed over their interest as if they were the issue of children of Jeannette Harrison. They are thus analogised to the interest of a grandchild as defined in paragraph 31(ii) above. So far as a child of a nephew and niece is concerned, the interest that such an object holds is that of a "sub-share".