1. The Facts
2. The Questions
3. The EPA
Ademption
Liability of the Executors
Relief
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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
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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.
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All of the four sons were educated at fee-paying schools.
Three went to Charterhouse.
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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.
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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.
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In time three of her sons married; on the 6th April
1977 Iain married Valerie; on the 5th July 1980 Donald married Helen and
on the 27th June 1981 Alastair married Dawn. Hamish remains unmarried. On
the 27th November 1982 Donald and Helen's son, Donald James Hugh Mark Purdy
Cameron, known in the family as"Jamie", was born, Marjorie's first grandchild.
Alastair and Dawn later had two daughters, Alexandra and Hannah. Iain and
Valerie have had no children. Jamie thus remains Marjorie's only grandson.
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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.
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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.
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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.
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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.
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Mrs Cameron, although well educated, had not taken any
part in the managing of her or the family's financial affairs; she came
from a generation in which leaving such matters to a husband or to advisers
was common and until Doctor Cameron's death in 1967 it was he who had managed
the family money. Both Iain and Alastair became Chartered Accountants and
by the time Mrs Cameron went to the nursing home she had for some while
depended upon them, in particular, for advice in financial matters and had
tended simply to act upon whatever advice they gave.
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On the 18th March 1989 Mrs Cameron executed an Enduring
Power of Attorney (the "EPA"). Under it Alastair, Hamish and Iain were jointly
appointed to be her attorneys for the purpose of the 1985 Act with general
authority to act on her behalf in relation to all her property and affairs.
It is signed (in a firm and clear hand) by Mrs Cameron and sealed in the
presence of a doctor. It has not been shown to me that any of the formalities
required under the Act was lacking. I have no reason to doubt its formal
validity.
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On the 1st April 1989 Marjorie Cameron made the only
codicil to her will of the 6th June 1974; Mr Crossman, who had been named
in the will as an executor and trustee, had by then retired and in his place
the Plaintiff, Peter David Phillips, Solicitor, was appointed to act jointly
with Iain as executor and trustee. In all other respects the 1974 will was
confirmed. Mr Phillips had worked at the same firm of solicitors as Mr Crossman
and, at about the time the codicil was made, the firm's file in relation
to the Cameron family was passed to him. He did not meet Mrs Cameron and
did not advise her in relation to the EPA although he did check it for its
formal validity. As dealings unfolded he dealt with Iain in correspondence
and on the telephone as his chief point of contact on Cameron affairs both
as a source of information and the person to whom he gave his advice.
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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.
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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.
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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.
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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.
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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.
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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.
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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".
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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.
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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.
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Even after making these gifts Mrs Cameron's funds were
ample relative to her needs; quite apart from Stock Exchange investments
she had, for example, over £300,000 cash at the bank. Iain raised with Mr
Phillips the possibility of yet further gifts with a view, in part, to the
reduction of tax liabilities. His letter to Mr Phillips of the 26th August
1991 shows not only a proposal to make advances so as to bring each brother's
advance up to £75,000 but also, consistently with earlier intentions, made
it clear that the three existing gifts should pro tanto adeem the prospective
and respective shares of each of the three who or whose children had been
thus benefited.
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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.
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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.
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On the 22nd November 1992 Marjorie Cameron died. Donald's
financial position was such that he needed financial help even for a mini-cab
to his mother's funeral. It was treated as a testamentary expense. There
is some reason to believe that a suit was bought for him in order that he
could wear it at the funeral and that its cost also was treated as a testamentary
expense. It was Iain who especially asked that these expenses were not to
be debited to Donald's share. Within a month after his mother's death Donald
was writing to Mr Phillips (as the solicitor to the estate and prospectively
an executor of Mrs Cameron's will) asking for financial help with very minor
routine bills of his for water, electricity and rent. Probate had not yet
been granted but Iain and Mr Phillips turned their minds not only to immediate
assistance for Donald but to arriving at a position in which his capital
would not be simply wasted. A short-term overdraft for Donald was arranged.
Donald still had not been told of the earlier provision for Jamie's education
but Iain felt that he should now be informed. As for Donald's share of residue,
the Counsel consulted by the Executors inevitably advised that as Donald
was adult and of full mental capacity it was not possible, without his consent,
to impose trusts, protective or otherwise, upon his share of residue.
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On the 17th March 1993 probate of Mrs Cameron's will
and codicil was granted out of the Brighton District Probate Registry to
Mr Phillips and Iain. Her net estate for probate was sworn at £735,108.
Correspondence and telephone calls began between Donald and Mr Phillips
on the subject of Mrs Cameron's silver and jewellery. Consistently with
the advice he had earlier given, Mr Phillips began to prepare draft estate
accounts on the basis that Hamish, Alastair and Donald brought into account
what were regarded as their respective inter vivos gifts. On the 4th June
1993 Mr Phillips wrote to Donald telling him of the £62,596 provided by
Mrs Cameron for Jamie's school fees. He added:-
"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.
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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.
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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.
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On the 3rd November 1993 Donald's solicitors indicated
to Mr Phillips that Donald would query whether his brothers as attorneys
could lawfully have given money, as they had, to Jamie and whether they
had thereby abused the powers vested in them as Attorneys. They said that
they would probably take that point up with Counsel. Donald's solicitors
did go to Counsel and on the 10th November 1997 they received advice. Upon
an assumption by her that the Attorneys had acted within the 1985 Act Counsel
advised them, inter, alia, that there was no ademption of Donald's share.
Counsel had been advised of her instructing solicitors' doubts as to the
propriety of the advances in the light of the 1985 Act but she was not asked
to advise upon the point which was, no doubt, why she made the assumption
I have mentioned. The point was not taken further at that time. Counsel
suggested that the Executors should be required to distribute Mrs Cameron's
estate on the basis that there had been no ademption of Donald's share.
Although she was told of the inter vivos gifts to Hamish and for Alastair's
children, the question of ademption or not of their shares of residue was
not addressed. On the 12th November 1993 Donald's solicitors invited the
Executors to undertake that the distribution of the Estate would be on the
basis of no ademption of Donald's share.
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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.
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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.
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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.
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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.
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On the 21st February 1996 Mr Phillips, as one of the
Executors, issued the Originating Summons which is now before me; it raises
the question of whether Donald's share of his mother's residuary estate
was pro tanto adeemed by the two provisions for Jamie's education that I
have described, together amounting to £67,796. Affidavits were sworn on
all sides through 1997. The matter was set down for trial. It was due for
hearing on Monday 16th February 1998. Until the preceding Friday 13th no
point had been taken in the proceedings that the inter vivos gifts were
invalid exercises of the EPA. On that day Carnwarth J, on Donald's wishing
to add that point, adjourned the Originating Summons, vacated the hearing
of the 16th February and required Donald to serve a Counterclaim and affidavit
as to the then newly emerged argument. Directions were given and it was
ordered that the costs of Donald's application of the 13th February and
the costs thrown away should be paid in any event out of Donald's share
of the estate. On the 5th March 1998 Donald served his Points of Counterclaim
which raised the question of whether the inter vivos provisions were invalid
exercises of the EPA and, if they were not, the Points went on to raise
several consequential questions. A further order for costs was made against
Donald on the 6th August 1998. Replies and Defences to Counterclaim were
served and yet further affidavits were sworn and served from all sides.
2. THE QUESTIONS
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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
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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."
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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."
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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.
-
Donald was cross-examined and his evidence was at first
evasive, claiming that he did not get the opportunity to consider Jamie's
private education and that he and Helen had not been considering Jamie's
education as Jamie was still so very young when Helen and he were still
together. He did finally says that he had not told Iain that he wanted Jamie
to go to Charterhouse. I prefer Iain's unchallenged evidence that Donald
had said that he wanted Jamie to go to Charterhouse although I would equally
accept that it may well be that Donald later changed his mind without clearly
indicating that he had. At all events his evidence disclosed no objections,
principled or otherwise, to private education. He felt that he could not
say whether his mother would have wanted her only grandson to be privately
educated. There is some indirect evidence that Helen had been privately
educated. Although Donald doubted that, he was not in a position to say
that it was not the case. There is also indirect evidence that Jamie, in
his mother's view, had been miserable whilst at a State primary school.
Donald's evidence was that he wanted the best for Jamie.
-
I do not attach significance to the fact that Mrs Cameron
very probably did not see Jamie between 1984 and her death. I say only that
that was"very probably" the case as there was no evidence from Jamie or
his mother. More significantly, nor was there any evidence that it was Mrs
Cameron's or Jamie's wish or even the Attorneys' wish that Jamie should
not see his grandmother.
-
Putting myself as best I can, on the evidence, in the
mind of Mrs Cameron as it would have been in 1991 had she still retained
mental capacity, I see her recognising that her own four sons had been privately
educated. For Dr and Mrs Cameron to have chosen private education for all
four of their sons would seem to indicate a preference in Dr and Mrs Cameron
for that form of education; they presumably thought it best. Mrs Cameron
had seen the burden of the cost of her sons' education being borne or at
least eased by assistance from a grandparent. She herself had benefited
from family trusts. She would have seen Donald, as Jamie's father, to have
had no material objection to private education and wanting the best for
Jamie and she would have seen Jamie's mother to be at least claiming herself
to have been privately educated, to have been dubious about State education
for Jamie, apparently with some reason, and as preferring that he should
be privately educated. Helen was immensely grateful for the provision for
Jamie's private education. Had she been able to discuss the matter with
Mrs Cameron she would presumably have been enthusiastic in favour of Mrs
Cameron making such provision for Jamie.
-
If, as she had earlier commonly done, Mrs Cameron had
turned to Iain and Alastair for advice, they would, especially as Iain understood
Donald to want Jamie to go to Charterhouse, have been likely to have been
in favour of her making provision for Jamie's private education. On the
hypothesis described, Mrs Cameron would, in my view, have recognised that
making the provision that she did for Jamie's education did not endanger
in any way her own financial position and that it enabled Donald to honour
a legal or moral obligation to contribute to his son's upkeep, an obligation
which Donald himself was failing to respect. She would have seen also that
to the extent the money went for Jamie's education it could not be wasted
by Donald nor could be appropriated by Helen. She would have seen that such
provision reduced the likelihood of Donald being sued by Helen for Jamie's
upkeep.
-
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.
-
Despite the long use of the term"portion" in the law
the word, as Jarman on Wills states at p. 1138"... is not
a term of art. But it seems to be something which is given by the parent
to establish the child in life or make provision for him". That"or" is to
be noted. Small gifts have never been portions - Ravenscroft -v- Jones
(1863) 32 Beav 669; Watson and Watson (1864) 33 Beav 574 - but the word
has reference not merely to quantity; it has also a"qualitative significance"
- In Re Vaux [1939] 1 Ch 465 C.A.. Where the basic ingredients
of a possible portion are present the question of whether or not a gift
by will is in fact a portion depends to a great extent on the donor's intention
- In re George's Will Trusts [1949] 1 Ch 154 per Jenkins J - and
the same must be true where the portion is by provision 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 ...").
-
Whatever the position might sometimes have been thought
to be when very different attitudes to the ownership and the ability to
dispose of property were current before the Married Women's Property Act,
in my judgment the better view now is that it suffices for a gift to be
capable of being a portion that it is made by either parent for the
benefit of a child. There is no longer, if there ever was, a need for any
examination of which, if either, parent was able to or did assume any moral
or legal duty or office to make provision for the child. Where other circumstances
do not suggest that no portion was intended then where a substantial gift
is made by a parent to or for the benefit of his or her child it would now
instead, in my view, need to be proved that notwithstanding that the donor
was a parent he or she was not acting by reference"to the office and duty
of the parent to make provision for the child", to use Lord Eldon's phrase.
Put another way, so far as concerns portions both parents should nowadays
be taken to be in loco parentis unless the contrary is proved.
-
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.
-
As to that,
in the case of the provision for Hamish, the gift was directly
for the benefit of Mrs Cameron's child. As for the intention in the case
of Donald, the benefit to Donald could only be indirect in that he was not
the immediate recipient. Nonetheless the Attorneys conceived and intended
there to be benefit to him as his mother's child. Alastair saw the payment
to be of benefit to Donald. Hamish said that providing for Jamie's education
would have been his mother's way of fulfilling Donald's responsibilities.
Iain referred to Helen having indicated an intention to sue Donald for maintenance
and he took the view that if provision was made by Mrs Cameron for Jamie
that not only fulfilled Donald's legal and moral obligations to his son
but also prevented action against him by Helen. If I am right in attributing
the intentions of the Attorneys to Mrs Cameron then its seems to me unarguable
but that the provision for Jamie was made by Mrs Cameron in such a way as
to have included performance of the office or duty upon her as Donald's
parent to make a provision for Donald. I have no reason to think, mutatis
mutandis, that the gift to Alastair's children or to Hamish was otherwise.
-
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.
-
Because the notion of what is a portion is so loose
the Courts have been able to be flexible in applying the description to
various gifts. For example, a gift by will of a share of the testator's
residuary estate, although not taking effect until the testator's death
(by which time his children might need no establishing in life) may be a
portion and it can be so notwithstanding that at the time of the making
of the will the gift would have no ascertainable value. That view came to
be held despite earlier contrary authorities - Montefiore -v- Guedalla
(1859) 1 de GF & J 93. Even a gift on discretionary trusts amongst
a class of the testator's children and grandchildren, a gift which therefore
could, theoretically, be a gift from which children were entirely excluded,
cannot necessarily be regarded as not conferring a portion on a child if
the trustees in fact in their discretion make a disposition in that child's
favour - In Re Vaux supra at p.482 per Sir Wilfrid
Greene M.R.
-
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.
-
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.
-
So also in Chapman -v- Salt (1709) 2 Vern p. 646
it appears from the headnote, albeit to an unsatisfactorily short report,
that a gift by will to a married woman was adeemed by the later gift by
the testatrix of a note for the same sum to her husband. It had been objected
that the note was to one and the legacy to another but evidence was received
that the note was intended to satisfy the legacy.
-
In Lord Chichester -v- Coventry (1867) supra
Lord Romilly observed at p. 91:-
"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):-
-
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.
-
Miss Sandells argues that taking such a view in relation
to ademption would represent an extension of the rule against double portions
for which there is no authority. In that there is no reported case in which
an inter vivos gift to A's child for his education has been held to have
adeemed a gift to A in the will of A's parent I would have to agree with
her observation, just as she was constrained to agree that neither is there
any direct authority against such a view. Two points need to be made.
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.
-
Secondly, it is a rule which is"founded on good sense
and adapted to the ordinary transactions of mankind" - Pym -v- Lockyer
supra at p. 46. But such transactions change over time. The ways
in which parents in the 1990's might find it convenient to make substantial
provision for their children are not necessarily those or only those which
were used in earlier years. It might, for example, have once been thought
to be a trivial and unnecessary benefit for a child to have his or her children's
private education paid for by the grandparents. However, the relative costs
of things may change and I would expect that nowadays many a parent wishing
to have a child privately educated would see it as a very considerable benefit
to have that education provided by a grandparent. So also the grandparent
would be likely to see that as making a substantial provision for the benefit
for his child as well as being of benefit to his grandchild. Indeed, a whole
sector of the insurance industry has grown up to assist in the making of
such provisions.
-
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").
-
I would accept that such an escape from the requirements
of the Wills Act could easily be pressed too far. It is, perhaps, inherently
unlikely in the ordinary case where the testator remains of testamentary
capacity that his later inter vivos gift will be made with the intent of
being subversive of the will; he would instead simply revoke his will. But
if that were shown, or if it appeared in a case in which, as here, the inter
vivos gift was made not directly by the testator but on her behalf, that
it was made with such an intent, then I would expect Miss Sandells' objection
would prevail and would forestall any ademption. The objection could thus
prevail in some cases in which an inter vivos gift to B might otherwise
adeem a gift by will to A. There will be cases which are of simple revocation
and not ademption - Kirk -v- Eddowes supra at p. 521.
-
Whether that is the position in a particular case should,
in my view, depend on the very same considerations to which I have referred
in determining how different the two gifts can be and yet remain as regarded
as double portions. If, in the surrounding circumstances to which I earlier
referred, 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 intended
to include the substantial benefit of the very same person then, in my view,
that would normally of itself suffice to show that there was an anticipation
rather than a revocation of the will and the Wills Act point would thus
fail to stop ademption.
-
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.
-
These features together amount to an unusual collocation
of circumstances; I cannot think I am opening any floodgates in concluding,
as I do, that in these special circumstances both the gift by will and the
inter vivos gift are such that the law is properly able to recognise the
donor as likely to have regarded both gifts as making substantial provisions
both of which were intended to include the substantial benefit of the same
person, Donald. The differences between the two provisions are not so marked
that the notion that the later could have been intended as a substitute
for the former is effectively excluded, to use the language of Lord Chichester
-v- Coventry supra. In my judgment both gifts were portions in favour
of Donald and the rule against double portions thus applies. As there is
nothing to rebut it, it follows, in my judgment, that the inter vivos provision
I have described here pro tanto adeems the share of his mother's residuary
estate to which Donald would otherwise have been entitled.
-
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.
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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
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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
-
Accordingly, in answer to question 1 in the Originating
Summons, I answer that Donald's share of residue is adeemed by the inter
vivos provisions of £62,596 and £5,200 there described. As for the points
raised in para 1 of Donald's Points of Counterclaim, I answer that the inter
vivos gifts made in January and April 1991 by the Attorneys as Mrs Cameron's
attorneys under the registered EPA were made in valid exercise of that enduring
power. I say nothing as to the other matters in the counterclaim, which
are all predicated on the basis that there was no such valid exercise or
no such ademption.
