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Jersey Unreported Judgments |
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You are here: BAILII >> Databases >> Jersey Unreported Judgments >> Representation of Equiom Trust (CI) Limited re Estate of the late Constantin Mattas [2024] JRC 068 (01 March 2024) URL: http://www.bailii.org/je/cases/UR/2024/2024_068.html Cite as: [2024] JRC 68, [2024] JRC 068 |
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Before : |
Sir Michael Birt, Commissioner, sitting alone. |
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Between |
Equiom Trust (C.I.) Limited |
Representor |
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And |
(1) Jean-Pierre Mattas |
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(2) Philippe Mattas |
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(3) The Government of Greece |
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(4) HM Attorney General |
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And |
(5) Advocate Richard Arthur Falle and John Bisson (in their capacity as the Joint Executors of the Will of the late Aréty Racadji ) |
Respondents |
IN THE MATTER OF EQUIOM TRUST (C.I.) LIMITED
AND IN THE MATTER OF THE ESTATE OF THE LATE CONSTANTIN MATTAS
AND IN THE MATTER OF ARTICLE 2 (1) OF THE PROBATE (JERSEY) LAW 1998 (AS AMENDED)
AND IN THE MATTER OF ARTICLES 11, 47 (3) and 51 OF THE TRUSTS (JERSEY) LAW 1984 (AS AMENDED)
Advocate S. J. Williams for the Representor.
Advocate R. D. J. Holden for the First Respondent.
Advocate A. Kistler for the Second Respondent.
Advocate S. J. Alexander for the Third Respondent.
Advocate S. A. Meiklejohn for the Fourth Respondent.
The Fifth Respondents were excused attendance.
judgment
the commissioner:
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Headings |
Paragraphs |
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Introduction |
1-2 |
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Background |
3-9 |
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The issues |
10-11 |
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Preliminary points |
12-17 |
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(i) Is the Bequest a trust? |
18-33 |
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Conclusion |
34-36 |
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(ii) Validity of the Trust assuming not charitable |
37 |
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(a) Certainty of beneficiaries |
38-64 |
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(b) Indefinite duration |
65-94 |
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(c) Administrative unworkability |
95-98 |
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(d) State immunity |
99-109 |
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(iii) Is the Trust a valid charitable trust? |
110-142 |
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(iv) Can the charitable aspects be saved or severed? |
143-162 |
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(a) Does category (d) of Coxen exist? |
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(i) The cases |
163-183 |
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(ii) The Nephews' submissions |
184-185 |
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(iii) Conclusion |
186-202 |
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(b) Does the Trust fall within category (d)? |
203-205 |
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(c) Can the family trust be quantified? |
206-207 |
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(i) The factual position |
208-216 |
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(ii) The submissions of the parties |
217-229 |
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(iii) Conclusions |
230-237 |
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Summary of conclusions |
238 |
commissioner
1. This judgment is a further instalment in the proceedings which have given rise to two judgments already, namely at [2022] JRC 237 and [2022] JRC 288 ("the December 2022 judgment"). On this occasion, the Court is sitting to determine whether the ultimate disposal of his residuary personal estate by the will of the late Constantin Mattas ("the Testator") is valid, or whether there is a partial intestacy. As this involves an issue of law, I am sitting without Jurats.
2. The arguments raised have covered a number of areas including whether a trust (as opposed to a gift) was created, certainty of objects, whether prior to the enactment of the Trust (Jersey) Law 1984, trusts of indefinite duration were permissible in Jersey law, sovereign immunity, the requirements for a charitable trust and the circumstances in which a charitable trust may be held valid despite the inclusion in the will of an invalid non-charitable provision.
3. The Testator died on 30 November 1979, domiciled and resident in Jersey. He was unmarried and had no children. Probate of the will with two codicils (together "the Will") was granted on 16 January 1980 to the Representor (it was then Lloyds Bank Trust Company (Channel Islands) Limited) as executor and trustee.
4. The key provision of the Will is set out in clause 11. It is lengthy and is not divided into any sub-clauses. For ease of reference, I have added some numbering in order to introduce sub-clauses. Amended only in that way - thus the punctuation is as in the original clause - clause 11 is as follows:
5. The first codicil introduced a pecuniary legacy of £1,000 and the second codicil increased the sum referred to in clause 11(ii)(b) from £3,500 to £5,200 but these changes are not relevant for present purposes. The key provisions are those contained in clause 11(vi) and (vii), to which I shall refer as "the Bequest".
6. In the events which have happened, the residuary estate is presently held pursuant to the latter part of clause 11(iv). Thus, the income is paid in equal shares to the two nephews, Jean-Pierre Mattas and Philippe Mattas ("the Nephews"), for their lives. They are aged 88 and 86 respectively. Between them, they have four surviving children and seven surviving grandchildren. The children vary in age from 49 to 54 and the grandchildren from 8 to 32.
7. As discussed in the December 2022 judgment, an issue has arisen in relation to French taxation. In this connection, the Representor took advice from English chancery counsel, Mr Christopher Tidmarsh KC. He advised in June 2021 that the Bequest was invalid and that, on the death of each nephew, one half would fall to be dealt with on intestacy. In summary, his key conclusions were that:
(i) the terms of the Bequest displayed the requisite intention to create a trust;
(ii) unless it was a charitable trust, the trust was invalid because of a lack of certainty as to its objects ('intelligent and promising young men') and, if Jersey law was the same as English law, because of the indefinite duration of the trust; and
(iii) it was not a valid charitable trust because it was not exclusively charitable by reason of the priority given to the children and grandchildren of the two nephews.
8. It was following receipt of the opinion from Mr Tidmarsh that the Representor issued the current Representation which, amongst other things, seeks a ruling as to the validity of the Bequest.
9. If the Bequest is held to be invalid, there will be an intestacy in respect of the residuary estate after the death of the Nephews. In that event, as at present advised - although there are certain investigations still to be carried out which may alter the position - one half of the residuary estate will be paid to the estate of the Testator's deceased sister, Arety, and her will provides that her residuary estate is to be paid to the Government of Greece absolutely with an expressed wish that the monies be applied towards charitable objects, namely the supply of food to and the maintenance of the needy children of Greece. The other half will pass equally to the two Nephews as the only children of the Testator's deceased brother.
10. It seems to me that, in accordance with the way in which the parties have framed their submissions, the following key issues arise for consideration:
(i) Does clause 11(vi) and (vii) create a trust?
(ii) If so, is the trust (assuming for these purposes it is not a charitable trust) invalid because of (a) lack of certainty of beneficiaries, or (b) its indefinite duration?
(iii) If otherwise invalid, is it nevertheless a valid charitable trust?
(iv) If it is not a valid charitable trust, can the charitable aspects be saved or severed?
11. I shall consider each of these issues in turn, but should first mention two preliminary points.
12. The first relates to the approach to interpretation of a will. The principles in this respect are well established and were conveniently summarised by the Court of Appeal in In re Amy [2000] JLR 237 at 243 per Southwell JA as follows:
There is no extrinsic evidence in this case or evidence about the surrounding circumstances at the time of the Will.
13. As to when there is ambiguity, the Royal Court in In re Amy at [2000] JLR 80 at 99 said:
14. The parties also agreed that the Court's approach was helpfully summarised in In Re Internine Trust [2005] JLR 236 at [62] and that applying that summary to the present case led to the following statement of principle:
(i) The aim is to establish the presumed intention of the testator from the words used.
(ii) Words must, however, be construed against the factual matrix existing at the time when the document was executed.
(iii) The circumstances relevant and admissible for this purpose are those that must be taken to have been known to the testator at the time and include 'absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man'.
(iv) That said, evidence of subjective intention, drafts and other matters extrinsic to the document in question is inadmissible.
(v) The Bequest has to be read in the context of the document as a whole.
(vi) Words should as far as possible be given their ordinary meaning.
(vii) However, this last precept may have to give way if consideration of the document as a whole, having regard to the principles set out above or common sense, points to a different conclusion.
15. The second preliminary point relates to the relevance of the Trusts (Jersey) Law 1984 ("the 1984 Law"). Article 58 provides that, subject to Article 59, the 1984 Law shall apply to trusts constituted or created either before or after the commencement of the 1984 Law. However, Article 59(1)(c) provides:
16. As the Will was executed and came into effect before 1984, it is therefore common ground that the validity of the Bequest must be determined without reference to the 1984 Law.
17. With that introduction, I turn to consider each of the issues in turn.
18. As mentioned above, the Tidmarsh opinion concluded that the Testator intended to create a trust. Paragraph 8 of the opinion is in the following terms:
19. It was common ground that Jersey law is to like effect. Thus, in Re Malabry Investments Limited (1982) JJ 117 at 120, Crill, DB, quoted with approval the following extract from In Re Cayford Limited [1975] 1 WLR 279 at 282:
20. The Attorney General and the Nephews submit that the Tidmarsh opinion is correct and that the Bequest was intended to create a trust. However, Advocate Alexander, on behalf of the Greek Government, submits that it was not so intended.
21. His primary submission, as set out in his skeleton argument, is that the Bequest is an outright gift to the Greek Government coupled with a wish that the Greek Government should thereafter settle (i.e. create) the Prêt d'Honneur Trust. He submits that clause 11(i)-(v) creates a primary trust in the hands of the Testator's executor and trustee and that the assets thereafter no longer belong to the residuary estate. Payment to the Greek Government absolutely terminates the primary trust and the Greek Government is then to be the settlor of the Prêt d'Honneur Trust. In creating the Prêt d'Honneur Trust, the Greek Government can cure the uncertainties (if any) as to the class of beneficiaries.
22. In supplemental submissions filed after the other parties had filed their reply submissions, the Greek Government submitted that an alternative analysis was that the Bequest constituted an absolute gift to the Greek Government, but with a condition subsequent that the Government establish the Prêt d'Honneur Trust.
23. In connection with this supplemental submission, Advocate Alexander referred to two authorities. The first was Sifton v Sifton [1938] AC 656. The facts of that case were that a testator by his will bequeathed his estate to his executors upon trust to pay "to or for my said daughter a sum sufficient in their judgment to maintain her suitably until she is forty years of age, after which the whole income of the estate shall be paid to her annually. The payments to my said daughter shall be made only so long as she shall continue to reside in Canada". The Privy Council held that this was a gift subject to a condition subsequent and that, as the reference to residing in Canada was too uncertain, the condition subsequent failed for uncertainty with the result that it had no effect and the daughter took the bequest free from the condition.
24. The second was In Re Porter [1975] N.I. 157, where the testator bequeathed his business to his brother subject to the brother paying £4,000 to his executors and trustees within six months of the testator's death. The will further provided that should the brother not pay the sum of £4,000 within six months or 'make satisfactory arrangements within that period for payment of such sum', then the bequest of the business was revoked and fell into residue. The £4,000 was never paid. The court held that the bequest to the brother was a gift subject to a condition subsequent, but that the condition was void for uncertainty as there was no indication as to what arrangements, made within six months of the testator's death for payment of the £4,000 at a later date, would be satisfactory and what would not. The brother therefore took the gift free from the condition imposing forfeiture but burdened with the obligation to pay £4,000 to the executors.
25. Turning to the cases mentioned in the Tidmarsh opinion, in Re Williams [1897] 2 Ch 12, the testator gave his residuary estate to his wife "...absolutely in the fullest confidence that she will carry out my wishes in the following particulars namely.....". The wishes which the testator then expressed related to how the wife should deal with certain insurance policies. Romer J noted that the testator had left the residuary estate to his wife 'absolutely' and held that this showed that he intended her to have absolute dominion over the property - to do as she thought fit with it. The remaining words were an expression of his wishes which did not impose a trust or a condition. His decision was upheld by a majority of the Court of Appeal. In passing, Lindley LJ said at 18:
26. In Bird v Harris (1869-70) L.R. Eq 204, the testator left his entire estate to two named individuals 'in and for the consideration of paying over' the income to his wife during her life. He then appointed the two individuals as executors. There was no devise or bequest of the reversion. An issue arose as to whether there had been a bequest of the reversionary interest to the two named executors. The court held that there was not and that there was a trust, with the reversionary interest undisposed of, so it passed as on intestacy. In passing, the judge said that the words 'in and for the consideration of' meant the same as 'for the purpose of'. Accordingly, the clear implication from the judgment was that wording such as 'for the purpose of' is likely to impose a trust.
27. In Attorney General v Wax Chandlers' Co (1873) L.R. 6.H.L1, the testator bequeathed certain houses to the Wax Chandlers of the City of London 'for this intent and purpose and upon this condition', namely that they should distribute annually £8 as described in the will and use the rest of the income for the reparation of the said houses. The will also provided that if the Wax Chandlers should leave any of these things undone, the property was to go over to the testator's next of kin. The question arose as to whether surplus income not required for reparation of the houses belonged beneficially to the Wax Chandlers. The House of Lords held that the wording was such that it imposed a trust and accordingly none of the income belonged to the Wax Chandlers beneficially.
28. In Vucicevic v Aleksic [2017] EWHC 2335 (Ch), the testator left a home made holographic will, the relevant part of which read:
29. The question arose as to whether this was a gift outright to the Serbian Orthodox Church or whether it was a gift to be held on charitable trust by the Church for the benefit of people in need in Kosovo, especially children.
30. At [24], Judge Matthews said this:
31. The judge went on to say that the testator was seeking to control what happened after his death and had expressed the gift to be for the benefit of people in need, especially children, rather than for the purposes of the Serbian church generally. Having considered the matter, the judge held that the wording of the will constituted a trust which, in the circumstances, was a charitable trust.
32. The sole Jersey case to which I was referred in this connection is Re The Don Benest [1989] JLR 330. In that case, the testatrix left land to the Connétable and Procureurs du Bien Public of the Parish of St Clement "for and on behalf of the 'pauvres honteux'" and expressed 'the desire' that the bequest be known as the Don Benest in memory of her late father, that the income be applied to assist such 'pauvres honteux' in the Parish of St Clement, who were not otherwise in receipt of parish relief, and that a statement of account of the income and expenditure of the Don Benest be prepared annually and approved by a committee of certain officers of the parish.
33. It was contended by the parish that this did not constitute a trust and that accordingly any surplus income after payment to 'pauvres honteux' belonged to the parish generally. The court disagreed and held that, although precatory words ("desire") had been used which would not prima facie create a trust, there were good reasons nevertheless for concluding that a trust had been created. Thus, the devise was made 'for and behalf of the pauvres honteux', which was a phrase pointing strongly in favour of a trust, and it did not matter that the word 'trust' was not used; the reference to a separate name for the bequest indicated an intention that the fund should constitute a separate entity on trust to assist the 'pauvres honteux' and not be part of the parish's general funds; and the desire for separate accounts was again evidence of the testatrix's intention that the funds were not to be merged into the parish's general funds.
34. In my judgment, the wording of the Bequest, when read in the context of the Will as a whole, was intended to create a trust. I would summarise my reasons as follows:
(i) I cannot interpret the Bequest as containing any intention that the funds should belong beneficially to the Greek Government. On the contrary, the clear intention is that the funds can be applied only for the provision of further education to the beneficiaries comprising 'intelligent and promising young men' and the children and grandchildren of the Nephews.
(ii) The wording is very different from clauses 3, 4 and 5 of the Will, where, when an absolute gift is intended, the word 'absolutely' is used. It is also different from clauses 8-10 where, although the word 'absolutely' is not used, it is abundantly clear that the relevant gift is made to the recipient beneficially to deal with as he or she wishes.
(iii) The wording is also very different from that in Re Williams where the residuary estate was given to the wife 'absolutely'. There is no mention of the Greek Government receiving the Bequest 'absolutely'.
(iv) The fact that a trust is intended is supported by the fact that the Bequest is referred to as a Prêt d'Honneur Trust. Furthermore, the Prêt d'Honneur Trust is given a name, namely 'The Dr. Constantin Mattas Scholarship Fund', the income of which is to be used to provide the stipulated benefits. In The Don Benest, the use of a separate name for the fund suggested to the court that the assets were to be kept separate from those of the parish, and in my view the same is true here. The assets are not to form part of the Greek Government's general assets, but are to constitute a separate fund which can only be used to benefit the beneficiaries described in the Bequest in the manner described in the Bequest.
(v) The Bequest must be used 'for the purpose of' creating a Prêt d'Honneur Trust. As stated in Bird v Harris, the expression 'for the purpose of' is certainly indicative (although not conclusive) of the existence of a trust. If one considers clause 11 as a whole and omitting unnecessary wording, it provides at clause 11(v)-(vii) that after the death of a Nephew the Trust Fund is to be held '...upon further trust to accumulate the income as aforesaid and upon the death of the survivor...to hold the capital and income of both parcels...to pay the same to the Greek Government in Athens...and this for the purpose of creating a Prêt d'Honneur Trust'. In my judgment, this wording is very much the language of obligation and direction rather than the language of desire or wishes.
(vi) Similarly, the wording in relation to the Nephews' children and grandchildren is clearly indicative of an obligation or direction, with its reference to their being 'entitled' and having 'priority' to such further education. Furthermore, the entitlement of the children and grandchildren is expressed as a proviso ("provided always...") to the provision concerning the other beneficiaries. That is wording suggesting a legally binding provision rather than a mere expression of wishes.
(vii) I acknowledge Advocate Alexander's argument that the Bequest refers to the payment to the Greek Government being 'for the purposes of creating a Prêt d'Honneur Trust' and later on to 'the Prêt d'Honneur Trust to be created by the Greek Government'. The argument runs that this suggests that the trust is to be created by the Greek Government as settlor. But, in my view, when read in context, that is not consistent with the overall meaning of the clause. In my judgment, the natural meaning of the words is that the Greek Government is to be the trustee of the Prêt d'Honneur Trust which, as a factual matter, is established (or created) by transfer of the assets to the Greek Government pursuant to the Bequest.
(viii) I am also unable to interpret the Bequest as being a gift to the Greek Government with a condition subsequent, as Advocate Alexander submitted in his secondary argument. In both Sifton and Porter, it is abundantly clear that the gift was a beneficial gift to the recipient (of capital to the brother in Porter, and of income to the daughter in Sifton). The brother and the daughter were free to use the capital or income, as the case may be, as they thought fit, provided there was compliance with the condition subsequent. That is wholly different from the present case. The Bequest is not intended to belong to the Greek Government beneficially, even if it complies with the alleged condition subsequent; the funds may only be used by the Greek Government to apply the income for the stated purpose of further education for certain stipulated beneficiaries. That is the language of an intention to create a trust rather than a beneficial gift with a condition subsequent. Advocate Alexander argued that there was some indirect benefit to the Greek Government because it would save its own money to the extent that the Bequest paid for the further education of intelligent and promising young men rather than the Greek Government having to do so, as well as the general benefit for Greece in such young men being further educated. However, that is something completely different from saying that the Bequest belongs to the Greek Government beneficially.
(ix) Advocate Alexander further submits that, whereas the word 'trust' is used regularly in clauses 11(i)-(v), the word is not used in clause 11(vi) and (vii) and that shows that there is a different intention as compared with the rest of clause 11. However, as stated earlier, no specific wording is required to create a trust and there is certainly no need to use the word 'trust'. For the reasons already given, when read as a whole, I can only interpret the Bequest as showing an intention to impose a trust obligation on the Greek Government rather than a beneficial gift to the Greek Government combined either with a mere expression of wishes or a condition subsequent.
35. For these reasons, I reject the Greek Government's submission that the Bequest constitutes a gift with merely an expression of wishes or a gift subject to a condition subsequent. I find that the intention of the Testator as derived from the wording of the Bequest was to establish a trust for the benefit of those described in the Bequest. I shall accordingly, where appropriate, hereafter refer to the Pret d'Honneur Trust established by the Bequest as "the Trust".
36. I should add that, on instructions, Advocate Alexander stated that, even if his argument was accepted (so that the Bequest was an absolute gift to the Greek Government), the Government would honour the wishes of the Testator (or the condition subsequent) and would establish the Prêt d'Honneur Trust as set out in the Bequest. I of course accept that assurance but it cannot alter or be in any way relevant to the true construction of the Bequest.
37. The Nephews submit that, if the Bequest is a trust, and assuming for the moment that it is not a charitable trust, the Trust is invalid on four grounds; (a) that there is a lack of certainty as to the class of beneficiaries; (b) it is of indefinite duration; (c) it is administratively unworkable; and (d) it is invalid because the trustee is a sovereign state which has sovereign immunity.
38. Ignoring for present purposes the subsequent statutory introduction of purpose trusts, it is well established - and not disputed in this case - that for a non-charitable trust to be valid under English law, there must be certainty of objects, i.e. certainty as to who can benefit from the trust. The test as to whether there is sufficient certainty in relation to beneficiaries was authoritatively established by the House of Lords in McPhail v Doulton [1971] AC 424, where it was held that a trust is valid if it can be said with certainty that any given individual is or is not a member of the class of beneficiaries. This is equally the position in Jersey law; see Re Exeter Settlement [2010] JLR 169 at [17] where the Court said:
39. The class of beneficiaries in the Bequest is expressed to be 'intelligent and promising young men of Orthodox Greek Church religious belief born in Greece of Greek nationals also of Orthodox Church religious persuasion'. It follows that, in order for the Trust to be valid, it must be capable of being said with certainty whether any given individual is or is not:
(i) 'intelligent'
(ii) 'promising'
(iii) 'young'
(iv) 'a man'
(v) 'of Orthodox Greek Church religious belief'; and
(vi) 'born in Greece of Greek nationals also of Orthodox Church religious persuasion'.
40. There is clearly no conceptual difficulty in deciding whether an individual is a man or was born in Greece of Greek nationals. I also consider that the category of being of Orthodox Greek religious belief (or persuasion) is sufficiently certain. As Theobald on Wills (19th Ed) states at 33-018, 'there is a modern judicial tendency not to invalidate religious conditions on the basis of uncertainty'. See for example Re Tuck's Settlement Trusts [1978] Ch 49. I consider that there is no conceptual difficulty in ascertaining whether any given individual is or is not of Orthodox Greek religious belief (or persuasion). It follows that there is no conceptual uncertainty in relation to categories (iv)-(vi) of the preceding paragraph.
41. Advocate Meiklejohn, on behalf of the Attorney General, submitted that categories (i)-(iii) of paragraph 39 above are to be distinguished from those at (iv)-(vi), because whereas those latter three categories are qualifications for membership of the class of beneficiaries, the expressions 'intelligent', 'promising' and 'young' are merely criteria for being selected from within the class to benefit from the Trust rather than qualifications for membership of the class.
42. I cannot accept this argument. There is nothing in the terms of the Will which suggests any distinction in this respect between the various criteria mentioned in the Bequest. The Bequest creates a class which is described as 'intelligent and promising young men of Orthodox Greek Church religious belief born in Greece of Greek Nationals also of Orthodox Church religious persuasion'. In my judgment, it is clear that all of the above criteria carry the same weight and are used to describe and limit the class of persons who may benefit from the Trust.
43. Turning to the criteria listed at (i)-(iii) of paragraph 39 above, I propose to consider first the expression 'young' as this is the category which causes the most difficulty.
44. The Nephews submit that it is too uncertain. At what point does a person cease to be 'young' for the purposes of the Trust? There is no objective criteria by which the Greek Government (or indeed the Court) can determine whether a person is or is not 'young'. Whilst one can accept that, given that the Trust is for the purposes of further university education (i.e. post-graduate study), a person can no doubt be considered young if under the age of 25, at what point beyond that age does he cease to be young?
45. Advocate Alexander, on the other hand, submits that, when read in context, the word 'young' is sufficiently clear. The fact that any grant will be for further university education and that there is a requirement that the beneficiary undertake to practice his profession for at least ten years after qualifying, effectively imposes an upper age limit. At paragraph 51 of his skeleton argument, Advocate Alexander submitted that the upper age limit was simply that the individual had to be below the Greek retirement age.
46. Notwithstanding the fact that a court will strive to give effect to a testator's intention and not to invalidate a trust on the grounds of uncertainty of object, I find myself in agreement with Mr Tidmarsh's opinion where he concludes at paragraph 26 that the word 'young' remains vague and imprecise and it is not possible to say at what age an individual stops being 'young'. Opinions may differ on whether, for example, a 35 year old is 'young'.
47. During the hearing, I raised with Advocate Alexander the question of what the upper limit of 'young' would be in the context of the Trust. He submitted that, on the assumption of a normal retirement age of 65 and given the requirement for an undertaking to practise a recipient's profession for 10 years after qualification, anything up to the age of 55 should be considered as 'young' for the purposes of the Trust. It is to be noted that this response was rather different from paragraph 51 of his skeleton argument (see paragraph 45 above), which shows that even the Greek Government was having difficulty in formulating what was meant by 'young'.
48. In my judgment, to describe a 55 year old as 'young' merely because he wishes to undertake further university education and is willing to undertake to practise his profession for 10 years is not a proper use of the word 'young'. I do not think that such a person can properly be described as 'young', particularly when read in conjunction with the requirement for the individual to be 'promising', which looks to the future.
49. It is important to recall the purpose of the requirement for certainty. It is that not only must a trustee know whether it can properly bestow a benefit on an individual as falling within the class of beneficiaries but, equally importantly, the Court must be able to decide whether or not payment to a particular individual falls within the terms of the trust and therefore is, or is not, a breach of trust. That is why the test for validity is expressed as being that it can be said with certainty that any given individual is or is not a member of the class. If the Greek Government were to decide to benefit a 30 year old, a 35 year old, a 45 year old or a 55 year old, I do not see how the Court could determine with certainty which, if any, of these was a member of the class as defined, i.e. a 'young' man. Indeed, the discussion with Advocate Alexander referred to above shows that it is not really possible to ascertain with any certainty what the Testator meant by 'young' and supports my view that it is uncertain when a person would be 'young' so as to fall within the defined class of beneficiaries of the Trust.
50. In the circumstances, it is not strictly necessary for me to decide whether the terms 'intelligent' and 'promising' are sufficiently certain for trust purposes. The Nephews submit that both expressions suffer from the same defect as 'young', in that they are too imprecise. Views may differ about whether a particular individual is 'intelligent' or 'promising' and there are no objective criteria specified in the Trust to assist in resolving any uncertainty.
51. Advocate Alexander placed reliance on certain dicta in the case of Public Trustee v Butler [2012] EWHC 858 (Ch), which case was also referred to in the Tidmarsh opinion.
52. In Butler, the testator provided at clause 6 of his will:
53. It transpired that there was no list and accordingly the court held at [14] that the provision failed for uncertainty because it could not be said of any individual, albeit a relative or descendant of the testator's brothers and sisters, that he/she was or was not a member of the relevant class because the essential ingredient of his or her name being on the list could not be satisfied.
54. In the circumstances, it was not necessary for the Chancellor to reach a conclusion on whether 'promising' was also uncertain as a defining characteristic. However, he expressed an obiter view as follows at [15]:
55. I have to say that, with all respect to the Chancellor, I do not find his reasoning convincing. The expression 'promising' is fine for an exercise of selection from within a defined class. That is the equivalent of the exercise undertaken by schools and universities (referred to by the Chancellor) who select 'promising' candidates from a class consisting of all those who have applied. However, the expression in the Will is a criteria which defines the class of beneficiaries. As the Chancellor said, opinions may differ on whether A or B is promising and, to my mind, it is difficult to see how in these circumstances it can be a satisfactory defining characteristic of a class. How is the Court to decide whether a trustee has acted in breach of trust by making a distribution to a particular individual? I accept that the word 'promising' is used in the context of further education, but I do not see that this assists. Because the only benefit available under the Trust is the provision of further university education, it is not disputed by any of the parties that the class is by definition restricted to individuals who have already been to university. The word 'promising' must be taken to add something to the characteristic of having already attended a university. It cannot therefore be consistent with the wording used by the Testator to say that all those who have already been to university can be taken as being 'promising'. All in all, I do not consider that, even when read in the context of the Bequest, the concept of whether an individual is 'promising' is sufficiently certain. I do not think that it can be said with certainty that any given individual is or is not promising.
56. I would reach a similar conclusion for similar reasons in relation to the expression 'intelligent'. Whilst there will no doubt be unanimity that Einstein was intelligent and would fall within the class, it is impossible to know where the limit would be drawn when descending from such elevated heights. It is again an expression which is inherently vague upon which different people will have perfectly valid different views. It is not sufficiently certain to define a class of beneficiaries.
57. Finally, Advocate Alexander submitted that, even if there was uncertainty as to the class of beneficiaries, the Greek Government could cure any such uncertainty because of the wording in the Bequest which states that it may employ the income of the Trust "in such manner as the Greek Government shall see fit". I cannot accept this submission. The discretion conferred by the above wording is limited to exactly how the income is to be applied within the constraints fixed by the Bequest. The discretion cannot be used to alter, expand or 'cure' the definition of the beneficiaries. The Greek Government may only apply income in its discretion for the beneficiaries as defined in the Bequest and that definition, for the reasons I have given, is too uncertain.
58. In its supplemental submissions, the Greek Government submitted that, if its primary case that the Bequest did not constitute a trust was rejected, the Bequest constituted an executory trust rather than an executed trust. A convenient summary of the position in relation to executory trusts is to be found in Lewin on Trusts, 20th edition, as follows:
59. Further passages of assistance in Lewin are as follows:
And at 7-091 the following appears:
60. The authority given in Lewin in support of the emphasised passages in 7-003 and 7-091 is Pengelly v Pengelly [2008] Ch 375. In that case, the testator left one-third of his residuary estate to his trustees upon discretionary trusts for 'a class of beneficiaries as they shall decide, such class to include...my children, my grandchildren and their...spouses and widows and widowers. Such settlement shall be established by a deed executed by my trustees'.
61. The claimant executors accepted that the provision had not created an immediate discretionary trust but asserted that it created a valid executory trust. If that was not so, they sought rectification by inserting the word 'only' after the word 'include' so as to restrict the class of beneficiaries to children, grandchildren, their spouses, widows and widowers. The judge's decision is conveniently summarised in the headnote which reads:
The judge went on to allow rectification and held that, as rectified, the provision in the will was effective to create an executory discretionary trust.
62. Advocate Alexander submitted that the thrust of the various extracts from Lewin is that the threshold for certainty of objects in the case of an executory trust is lower than in the case of an executed trust. I cannot accept that argument. No specific authority was drawn to my attention which supported that proposition and Pengelly is against him. While certain aspects of an executory trust can be clarified or fleshed out when the further trust deed is executed, that does not apply to the identification of the class of beneficiaries; otherwise it is leaving the trustees to determine the selection of who may benefit from the trust created by the will and, as set out in the extract from the headnote quoted above and in Re Flavel's Will Trusts [1969] 1 WLR, 444 at 446, a testator cannot leave his trustees to make his will for him. This is also the position under Jersey law; see Meaker v Picot [1972] JJ 2161 at 2164. Snell's Equity (34th ed) also suggests that the further instrument is confined to defining the beneficiaries' interests in the trust property rather than defining the class of beneficiaries when it states at 21-031:
63. Accordingly, even if the Trust were to be considered as an executory trust rather than an executed trust, my decision in relation to the lack of certainty of the class of beneficiaries in this case would be the same and the Trust would still be invalid. It is not therefore necessary to determine whether the Trust is an executed trust or an executory trust, but on balance I consider that it is an executed trust. As Lewin states in the emphasised passage in 7-003 above, a trust is executory only where it contemplates, expressly or by implication, the execution of some further instrument to effect the intentions which it evinces. There is certainly no express mention of any further trust document in the Bequest and I do not consider that there is any necessary implication that the Testator contemplated the execution of such further deed by the Greek Government. The Bequest is very specific about the nature and purpose of benefits which may be conferred and no further detail is required. The lack of specific administrative provisions is not uncommon in older trusts and does not mean that the trust is executory rather than executed.
64. In summary, I do not think it assists the Greek Government even if the Trust is considered as an executory trust rather than an executed trust.
65. The Trust contains no provision for the vesting of the capital in any of the eligible beneficiaries. The income from the capital is to be used for an indefinite period to provide the stipulated benefits. The Tidmarsh opinion stated that under English law, the Trust would be void unless charitable because its indefinite duration breached the rule against inalienability. It is common ground between the parties that the Tidmarsh opinion is correct in this respect and that, if not a charitable trust, the Trust would be void if governed by English law because of its indefinite duration.
66. However, it is of course governed by Jersey law, having been created in the will of a person who died domiciled in Jersey. The question therefore arises as to whether the indefinite duration of the Trust means that it is also void under Jersey law.
67. Apart from the Attorney General, the parties did not address this point to any extent in their submissions either before or during the hearing. I therefore asked the parties to provide written submissions on this issue following the hearing. They have done so and I am most grateful for the very helpful supplementary submissions which have been filed.
68. Strictly speaking, it is not necessary for me to address the issue as I have already held that, if the Trust is not a valid charitable trust, it is void for lack of certainty of objects. However, in case I am wrong on that point and in deference to the work which the parties have put into their supplementary submissions, I propose to express my conclusion despite the fact that the position is now governed by statute and the question is therefore unlikely in practice to occur again. As originally enacted, the 1984 Law provided that trusts could last for one hundred years but, as a result of an amendment introduced by the Trusts (Amendment No 4) (Jersey) Law 2006, Article 15 now provides that a trust may continue in existence for an unlimited period. However, for the reasons set out earlier, the provisions of the 1984 Law cannot affect the validity of the Trust and the question of whether it is void or not must be considered by reference to the law of Jersey as it was prior to 1984.
69. The starting point is the decision of the Privy Council in Investec Trust (Guernsey) Ltd v Glenalla Properties Ltd [2018] UKPC 7 and in particular the observation of Lord Hodge at [57] in the following terms:
70. The effect of the decision in Investec was summarised by Logan Martin JA in the Court of Appeal in Rawlinson & Hunter Trustees SA v Chiddicks, 2019(1) JLR 87 (being the name under which the Halabi case referred to in the next paragraph was reported in the Court of Appeal) at [131] as follows:
71. This approach in Investec was endorsed by the Privy Council in the subsequent case of Halabi v Equity Trust (Jersey) Limited [2022] UKPC 36 where at [55] Lord Richards and Sir Nicholas Patten said this:
72. There was some discussion in the submissions as to whether the rule against trusts of indefinite duration is properly to be regarded as a rule of English trust law (and therefore fall in within the principle described in Investec and Halabi) or whether it is a more general rule of English property law.
73. I accept that the origins of the rule are to be found in the general principle of English law which sought to regulate dispositions purporting to fetter the future alienation of property and that this was not applied solely in the trust context. I agree with the submission made on behalf of Philippe that the rationale for such restrictions lies in considerations of public policy. These considerations were conveniently summarised in Stanley v Leigh (1732) 2 P Wms 686 as:
74. For present purposes (I ignore the rule in respect of excessive accumulations as I do not consider it relevant to this case), there are two relevant rules of English law which are directed towards restricting the fettering of any future alienability. The first is the rule against perpetuities (strictly so called) which provides that an interest in property is void if it may vest outside the perpetuity period, which is lives in being plus 21 years (see the Report of the English Law Commission 'The Rules Against Perpetuities and Excessive Accumulations' (1998) at paragraph 1.7).
75. The second is the rule against perpetual (or indefinite) trusts. This is conveniently described in paragraph 1.14 of the above Report under the heading 'The rule against inalienability' in the following terms:
76. The separate nature of the rule against inalienability (or perpetual trusts) and the rule against perpetuities is helpfully described in Theobald On Wills (19th ed) at 35-072 in the following terms:
77. In my judgment, whilst the underlying public policy reasons for the rule against perpetual trusts and the rule against perpetuities were of application to property interests generally, the rule against perpetual trusts is firmly established as a principle of English trust law and that is supported by the concluding observation of the Law Commission in the emphasised passage in paragraph 75 above, and by the fact that the rule in terms prohibits perpetual (or indefinite) trusts.
78. I therefore consider that the rule against perpetual or indefinite trusts (i.e. trusts lasting longer than lives in being plus 21 years), as part of English trust law, falls within the principle expounded by the Privy Council in Investec and Halabi. It follows that the rule is part of Jersey law unless it conflicts with Jersey customary law. Accordingly I turn to consider whether that is the case.
79. It is common ground that this issue (i.e. whether Jersey law requires the duration of non-charitable trusts to be limited to lives in being plus 21 years) has not arisen for decision previously. Advocate Alexander and the Attorney General place some reliance on a comment in Matthews and Sowden, the Jersey Law of Trusts (3rd ed) where at paragraph 15.4 they state: "Before 1984 Jersey had no rules at all relating to future interests and duration of trusts". However, when read in context, I do not consider that the authors were stating that the rules against perpetuity and perpetual trusts did not apply; they were simply recording (accurately) that there was nothing in Jersey law on the topic one way or the other.
80. In order to ascertain what Jersey law would have been had the issue ever arisen, one must start by looking at the civil law, albeit that the civil law did not have the concept of trusts. In this connection I have been much assisted by paragraphs 2.6 - 2.29 of Matthews and Sowden together with an article by M Pock, 'The Rule Against Perpetuities - A Comparison of Some Common Law and Civil Law Jurisdictions, St John's Law Review, Vol 35 (1960) No 1' and a further article by Sir Morris Amos KC, 'Perpetuities in French Law', 'Journal of Comparative Legislation and International Law Vol 16, No 1 (1934) PP18-24' which were referred to by Advocate Kistler in his supplementary submissions.
81. Civil law jurisdictions have also set their face against property becoming inalienable and have taken steps to counter mechanisms whereby testators have sought to achieve this. As Matthews and Sowden point out at paragraph 15.2, in Roman law the wealthy used fideicommissa or substitutions to render property inalienable and so preserve it in the family. Justinian therefore forbade them beyond the fourth generation and Charles IX of France in 1560 forbade them beyond the second degree. Under the Code Civil substitutions created in wills are prohibited (see article 896).
82. A substitution is, of course, not a trust. It is the successor to the Roman law fideicommissum and is described by Matthews and Sowden in the following terms at paragraph 2.16:
83. Consistently with the objection to property becoming inalienable, civil law jurisdictions have tended to place restrictions on the ability to create substitutions by will. Thus, having surveyed a number of such jurisdictions, Pock states at page 82:
84. Although the ability to make wills of immovable property was only introduced in Jersey by the Loi (1851) sur Les Testaments d'Immeubles, Article 6 of that Law provided that substitutions were prohibited in the following terms:
In translation -
85. Thus, Jersey public policy at that time was clearly consistent with the Code Civil in France and with other civil law jurisdictions in restricting the ability by will to render property inalienable by way of substitutions in respect of immovable property.
86. The position in relation to wills of movable estate is conveniently summarised in Matthews and Sowden at paragraphs 2.26 to 2.28 and I can do no better than set them out in full:
Thus, as set out in the above passage, Jersey customary law did not permit substitutions to be created in a will of movable estate.
87. In summary, it is clear that the customary law of Jersey, in common with other civil law jurisdictions (including France) and the common law itself, set its face against structures which would render property inalienable other than for a limited period and would strike down wills which infringed this principle.
88. In those circumstances, although trusts were previously unknown and only gradually introduced in more recent times, I regard it as highly unlikely that the customary law of Jersey would have allowed an indefinite trust of movables created by will. I consider that Jersey law would have regarded such a trust as invalid. To allow such a trust would be wholly inconsistent with the approach which the customary law of Normandy and Jersey (as well as other civil law jurisdictions) had taken in connection with the inalienability of property (both movable and immovable). Putting it at its lowest and reverting to the statement of the Privy Council in Investec, there is nothing in the customary law of Jersey which conflicts with the rule of English trust law which prohibits trusts of indefinite duration (other than charitable trusts).
89. Advocate Alexander placed some reliance on the Guernsey case of Re Tardif, which was decided by the Royal Court of Guernsey on 9 May 1953. The judgment itself was not before me, but I was provided with a case note prepared by the firm of Ozannes (although the date of the note is not clear) and also with a case note in issue 13 (1992) of the Guernsey Law Journal. Fortunately, the two accounts appear to be broadly consistent. As described on page 30 of the Guernsey Law Review, the facts of the case were that the deceased's will of real property contained a devise "en fin et perpétuité d'héritage", but subject to the condition that the real property subject to the devise be not alienated "avant la troisième generation". The devisee petitioned the Royal Court to declare the condition void on one or more of the following grounds:
(i) the condition was repugnant to the estate to which it was annexed;
(ii) the condition was contrary to public policy;
(iii) the condition was void for uncertainty.
90. The Royal Court held that the condition was void on grounds (i) and (iii). In relation to the ground (i), a restriction on alienation was repugnant to the estate created by the words 'en fin et perpétuité d'héritage' being the greatest estate in real property known to Guernsey law, in that it purported to restrict that right of alienation which was an essential element of such an estate. As to ground (iii), the condition was void for uncertainty as it was impossible to determine whom the deceased intended should become entitled to the property freed from the restraint on alienation.
91. In relation to ground (ii), the Guernsey Law Review summarised the Court's decision as:
92. The Ozannes' case note summarised the Court's decision on ground (ii) in the following terms:
93. I am unable to derive any assistance from this case. One simply does not know what authorities and arguments were put before the Royal Court. Furthermore, the case did not involve a trust and it is quite clear that the Royal Court was not specifically considering whether the English rule against perpetual trusts was or was not part of Guernsey law. When set against the matters I have described earlier in relation to the approach of civil law jurisdictions, I do not consider that any weight can be placed on Re Tardif in connection with the issue at present before me.
94. For the reasons given above, I hold that Jersey customary law is not inconsistent with the English rule against trusts of indefinite duration (i.e. trusts lasting longer than lives in being plus 21 years). Accordingly, applying Investec and Halabi, the English rule forms part of the Jersey law of trusts as it existed before 1984. It follows that, unless the Trust is a valid charitable trust, not only is it void for uncertainty of objects but it is also void as being in breach of the rule prohibiting trusts of indefinite duration. This finding applies not only to the Trust as a whole, but also to the trust for children and grandchildren if considered separately. That is because, although that trust will terminate upon the death of the last surviving grandchild of the Nephews, that will not necessarily occur before the expiry of lives in being as at the date of the Testator's death plus 21 years. In theory, either Nephew could still have another child who could in turn have children well into the future. Thus, the trust for the children and grandchildren is invalid when considered on its own.
95. Even where the definition of a class is conceptually certain, a trust will fail if it would be administratively unworkable. The trust would be void where the meaning of the words used is clear but the definition of beneficiaries is so hopelessly wide as not to form anything like a class; see Lewin 5-051 relying on McPhail (supra) per Lord Wilberforce at 457.
96. Advocate Kistler submitted that the Trust would be administratively unworkable. A convenient summary of his submissions is at paragraph 52 of his skeleton argument where he raised the following points:
(i) Given that the Trust only authorised the payment of income to beneficiaries, steps would have to be taken to ensure that the capital was appropriately invested so as to generate a meaningful income.
(ii) As there was no express power to accumulate income, the Greek Government would need to take steps to ensure that the Trust was suitably advertised to potential beneficiaries.
(iii) The Greek Government would need to devise a procedure for inviting applications, verifying the eligibility of the beneficiaries, gauging the level of financial support required, obtaining the requisite undertakings with regard to both living and practising their profession in Greece and agreeing to repay the sums loaned, and ensuring that any funds paid to duly-selected beneficiaries were indeed used for the purposes intended. This would pose logistical difficulties given the need for the Greek Government to have oversight over the activities of potentially a large number of beneficiaries in England, France, Germany, Italy and the former members of the USSR (in which countries it would of course not have jurisdiction).
(iv) The Greek Government would additionally need to keep in close contact with all of the children and grandchildren of the Nephews in order to ensure that sufficient income was always retained in the event that any of them wished to pursue further education.
(v) Upon completion of the beneficiaries' education, the Greek Government would need to ensure that such beneficiaries remained resident in Greece and practising their profession for a period of ten years and ensure that the sums provided to them were repaid. In appropriate cases, the Greek Government would also need to consider if it should exercise its discretion to extend the repayment term to twelve years. It would also need to take enforcement steps against beneficiaries who failed to repay the funds loaned to them within the ten or twelve year period.
97. Advocate Meiklejohn, on behalf of the Attorney General, submitted that none of these difficulties were insurmountable and the Trust was administratively workable.
98. On the hypothesis that the Trust is otherwise valid, I do not consider that it would be administratively unworkable. On that hypothesis, it would set out the criteria for who was to benefit from the Trust and would therefore differ from the sort of case where there is an enormously wide class with no indication of who should benefit. As to the practical issues raised by Advocate Kistler, I see no reason why the Greek Government would not be able to address them satisfactorily. They could no doubt arrange for advertising, outreach to universities and other measures to draw the attention of potential candidates for benefit to the existence of the Trust and could set up an administrative team to deal with issues of selection, conferring benefit, ensuring that the funds are used for a specified purpose and obtaining repayment in due course. As Hayton, Matthews and Mitchell, Law of Trusts and Trustees state at 8.76, 'in practice it seems from McPhail v Doulton, Re Demley and Re Gestetner that the court will be loath to inhibit the flexibility of widely drafted discretionary trusts by holding them void for administrative unworkability'. I would endorse this sentiment and would only wish to hold a trust void for administrative unworkability if driven to that conclusion. In this case, I have no difficulty in concluding that it should be perfectly possible for the Greek Government to administer the Trust in accordance with the terms set out in the Will if it is a valid trust.
99. While some of the parties addressed this issue under the heading 'administrative unworkability', I think it preferable to deal with it separately.
100. In essence, the argument put forward on behalf of the Nephews is that, although the Greek Government has submitted to the present proceedings, it has not submitted to any future proceedings in relation to the Trust. It would therefore be able to claim state immunity in respect of, for example, any future claim against it for breach of trust. In those circumstances, the Trust would be unenforceable against its trustee. They relied on the dictum of Millett LJ in Armitage v Nurse [1998] Ch 241 at 253 where he said:
101. Advocate Holden accepted that he could find no specific authority which dealt with the issue of where a state is a trustee and whether this means that the trust is void, but he relied upon this dictum of Millett LJ in support of the proposition that, if the rights cannot be enforced against the trustee, the trust is invalid.
102. I would reject this argument on three grounds.
103. The first relates to the question of submission. I agree that the Greek Government has so far only submitted to the present proceedings. However, during the course of oral submissions, Advocate Alexander confirmed that the Greek Government would be willing to undertake not to claim state immunity in respect of any future proceedings relating to the Trust. In those circumstances, the issue would not arise and the beneficiaries would be able to enforce their rights against the Trustee. It would therefore be highly unsatisfactory to declare the Trust void on the ground of lack of enforceability in circumstances where the Greek Government is willing to give such an undertaking so that the Trust will be enforceable.
104. The second ground relates to whether state immunity could in fact apply to proceedings in relation to the Trust. Advocate Holden relied on certain observations in the case of Rahimtoola v Nizam of Hyderabad [1958] AC 379, a decision of the House of Lords. For example, Lord Reid said at 401:
105. However, that case preceded the development of the restrictive theory of state immunity and also the enactment of the State Immunity Act 1978 ("the Act"), which has effect in Jersey pursuant to the State Immunity (Jersey) Order 1985.
106. The relevant provisions of the Act, as it applies in Jersey, are as follows:
107. Although I have not heard detailed argument, I consider that the Greek Government would not be entering into its trusteeship and carrying out its activities as trustee 'in the exercise of sovereign authority'. It has been appointed as a result of the Will, not by the exercise of sovereign authority, and it would be carrying out its activities as trustee in the same way as any other trustee. The activities which it undertakes as trustee could be undertaken by any corporate trustee and would not involve the exercise of sovereign authority. I would therefore be of the opinion, as at present advised, that because of the terms of section 3(1)(a) of the Act, the Greek Government could not claim sovereign immunity in respect of any action against it for breach of trust in relation to the Trust. It follows that the Trust could be enforced against its trustee.
108. Thirdly, even if I am wrong in relation to my second ground, I am not persuaded that the mere fact that the trustee is a sovereign state is sufficient to invalidate the Trust from the outset. Quite apart from the undertaking to submit referred to earlier, it cannot be known at this stage whether, in any given case, the Greek Government would claim immunity. If it did not claim immunity, the Trust could be enforced in the usual way and there would be no difficulty. I do not consider that the mere possibility that the Greek Government might claim sovereign immunity in future is sufficient grounds to declare the Trust invalid. Indeed, as Advocate Alexander said in the course of oral argument, the Greek Government might well wish to see a professional corporate trustee appointed as trustee, in which event any supposed difficulty would disappear. I do not consider it right to declare the whole Trust invalid simply because there may be circumstances in future where, if it remains as trustee, the Greek Government may claim state immunity. Even if such a situation were to arise, the beneficiaries would still have the rights conferred by the law of trusts and the Greek Government would be subject to the duties imposed by such law even if they could not be enforced. I do not think that Millett LJ had such a situation in mind when he expressed himself as he did in the passage referred to above from Armitage.
109. In summary therefore, I uphold the submissions of the Nephews in relation to certainty of objects and indefinite duration, but reject their remaining arguments. Accordingly, if I am wrong on the certainty point and the indefinite duration point, the Trust would be a valid non-charitable trust.
110. There is no requirement for certainty of objects in relation to a charitable trust and such trusts can also last indefinitely. Accordingly, if the Trust is a valid charitable trust, the concerns over certainty of objects and indefinite duration discussed above disappear. The Greek Government submitted that the Trust is indeed a valid charitable trust but this was disputed by the Nephews, and the Attorney General accepted that the Trust as a whole was unlikely to be upheld as a valid charitable trust (paragraphs 36 and 37 of his skeleton).
111. Before turning to consider the various arguments raised, I should deal with a preliminary point, namely whether the provisions of the Charities (Jersey) Law 2014 ("the Charities Law") are applicable. In his skeleton argument, Jean-Pierre placed some reliance upon Article 5(2) of the Charities Law, which provides that an otherwise charitable trust does not meet the charity test described in Article 5(1) of that Law if its trustee is or is controlled by a Minister or any equivalent in another jurisdiction. It was submitted that the Greek Government is clearly the equivalent of a Minister and that accordingly, pursuant to Article 5(2), the Trust cannot be charitable as it cannot meet the charity test described in Article 5(1).
112. The Attorney General submitted that the Charities Law is of no application and, during the course of the hearing, this was ultimately conceded by counsel for both Nephews. That is because the charity test described in Article 5(1) is relevant only for the purpose of deciding whether a trust (or other entity) can be registered as a charity under the Charities Law. Registration confers certain advantages, but a charity (including a charitable trust) does not have to register. It is the customary law which determines whether a trust is a charitable trust and it remains a charitable trust even if for any reason (such as having a trustee which is the foreign equivalent of a Minister) it decides not to register or it cannot be registered as a charity under the Charities Law. It was therefore ultimately not disputed that the Charities Law is not relevant to the issues which fall for decision in this case.
113. In order to be a valid charitable trust under customary law, a trust must be:
(i) for exclusively charitable purposes; and
(ii) for the public benefit, which means that it must benefit the community or a section of the community. See Re Greville Bathe Fund [2013] (2) JLR 402 at [20].
114. It is common ground between the parties that the Trust is for the advancement of education and that this is a charitable purpose. It is further common ground that, to the extent that the Trust is for the beneficiaries described in clause 11(vi) of the Will (to which class I shall refer for convenience as 'young Greek men'), it is for a section of the community and accordingly fulfils the requirement for public benefit so as to amount to a charitable purpose. Accordingly, viewed on its own, the trust for the further education of young Greek men in clause 11(vii) is a valid charitable trust.
115. The difficulty arises because the trust in clause 11(vi) is made subject to the proviso in clause 11(vii), which provides that, in the provision of further education, the children and grandchildren of the Nephews will be entitled to priority. It is well-established that, to be a section of the community for these purposes, the class of beneficiaries must not be dependent upon their relationship to a particular individual. In Oppenheim v Tobacco Securities Trust Co Limited [1951] AC 297, Lord Simonds summarised the position as follows. At 305 he said:
And at 306:
116. In Oppenheim, the class of beneficiaries eligible for the provision of benefits for education was confined to children of employees or former employees of a particular company or its subsidiaries. Although the number of potential beneficiaries was very substantial because of the size of the company, the House of Lords held that, because the nexus between them was employment by particular employers, the trust did not satisfy the test of public benefit requisite to establish it as a charitable trust. The principle established in Oppenheim was held to be equally applicable as a matter of Jersey law in Re Greville Bathe Fund.
117. It follows that, if it stood on its own, the trust to provide further education for the children and grandchildren of the Nephews would not be a charitable trust as it would not be for the benefit of a section of the community. The question which arises in this case is whether the existence in the Bequest of the provision for the Nephews' children and grandchildren means that the Trust as a whole cannot be regarded as a charitable trust notwithstanding that the remaining portion of the Trust (i.e. that for young Greek men) satisfies the requirements for a charitable trust.
118. I was referred to a number of decisions which touch upon this problem.
119. In Re Koettgen's Will Trusts [1954] Ch 252, the testatrix bequeathed her residuary estate on trust for the commercial education of British born subjects whose means were insufficient to obtain such education at their own expense. There was also a direction in the will that the trustee should give preference to employees of a particular company and to their families although this preference was limited to a maximum of 75% of the income of the trust in any year.
120. It was argued on behalf of the beneficiary who would take into default that, as to 75%, the trust was primarily for the benefit of the employees and their families and it was only if there were insufficient members of that preferred class in any one year that the public could come in as beneficiaries under the trust.
121. Upjohn J accepted that there was 'much force' in this argument, but construed the relevant clause rather differently. He held that the primary class consisted of British born subjects who could not pay for commercial education themselves. This was a wide class which satisfied the requirement for public benefit. It was only when making a selection from within that primary class that preference was to be given to particular members of the class, namely employees of the company and their families. He held that the question of the public nature of the trust fell to be considered at the stage when the primary class of eligible persons was ascertained and that that primary class was of a sufficiently public nature. The direction that, when selecting from within that primary class, the trustees were to give preference to the employees of the company and their families did not affect the validity of the primary trust, it being quite uncertain whether such preferred persons would in any year exhaust 75% of the income.
122. As can be seen, it was critical to his decision that the preferred class was simply a sub-set of the primary class of beneficiaries such that the preference only came into play when the trustees were deciding who to select for benefit from within the primary class.
123. According to the Tidmarsh opinion, Koettgen has not been followed in any other English case and has been the subject of some doubt and/or criticism as follows.
124. In Caffoor v Commissioner of Income Tax, Colombo [1961] AC 584, the trust deed provided that, after the death of the grantor, the income was to be applied by the board of trustees in their discretion for all or any of a number of purposes which included the education, instruction or training in England or elsewhere abroad of deserving youths of the Islamic Faith. The trust deed went on to provide at clause (2)(b) "the recipients of the benefits...shall be selected by the board from the following classes of persons and in the following order:- (i) male descendants along either the male or female line of the grantor or of any of his brothers or sisters failing whom" youths of the Islamic faith born of Muslim parents of the Ceylon Moorish Community permanently resident in Colombo or elsewhere in Ceylon. The question arose as to whether the income of the trust was exempt from income tax as being a charitable trust. At 603, Lord Radcliffe, giving the judgment of the Privy Council, said as follows:
125. Lord Radcliffe went on to comment on Koettgen in the following terms at 603-604:
126. As can be seen, whilst expressing some doubt about the decision in Koettgen, the Privy Council did not ultimately disapprove it, but distinguished it on the basis that in Koettgen the direction was to give preference to the preferred class out of a wide primary class whereas in Caffoor, the Privy Council held that the wording created a primary trust in favour of the family.
127. In Inland Revenue Commissioners v Educational Grants Association Limited [1967] Ch 123, the taxpayer company (the Association) was established for the advancement of education in general terms. It was promoted by a director of MB Limited, the council of management were all connected with MB Limited and the income of the Association consisted primarily of monies received from MB Limited. Between 76% and 85% of the income in the relevant years was applied for children of persons connected with MB Limited. The question arose as to whether the Association could properly claim exemption from income tax on the grounds that the income was applied for charitable purposes only. The court was therefore concerned with how the income had in fact been applied, not how it might be applied in future.
128. Pennycuick J held that, to the extent that income had been applied for the benefit of persons connected with MB Limited, it was not for the public benefit and accordingly the claim for exemption failed. In this respect, he followed Oppenheim.
129. In the circumstances it was not necessary for him to consider whether Koettgen had been correctly decided but, having referred to it and to Lord Radcliffe's judgment in Caffoor, he said the following at [143]:
130. Tudor on Charities (10th ed) summarises the position as follows at 2-072:
131. To like effect is the commentary in Picarda, Law and Practice Relating to Charities (4th Ed) at 79 where, having described Koettgen as a 'somewhat puzzling case', the author goes on to say:
132. I share the concerns expressed by Pennycuick J, Tudor and Picarda as to whether Koettgen was correctly decided. I would additionally refer to the observation of Lord Browne-Wilkinson speaking for the Privy Council in Attorney General of the Cayman Islands v Wahr-Hansen [2001] 1 AC 75 at 81E:
133. Where a trust provides that preference or priority is to be given to members of the settlor's family over general members of a section of the public, it is quite hard to see how such benefits can be regarded as charitable given the decision in Oppenheim. If that is right, property could be applied for purposes other than charitable purposes and, in accordance with the observation of Lord Browne-Wilkinson, the trust should fail. Certainly if Koettgen is followed, there is scope for settlors to seek to benefit their families by means of a trust masquerading as a charitable trust, with all the tax and other advantages which that can bring.
134. However, I do not need to go that far. In my judgment, Koettgen is to be distinguished from the present case. As mentioned above, it was critical to Upjohn J's decision in that case that there was one class of beneficiaries, namely British born subjects who could not afford the relevant education. That class formed a section of the public. The preferred beneficiaries also had to be British born subjects who could not afford the relevant education. Thus the judge was able to hold that the class of beneficiaries as a whole formed a section of the public and the fact that, when selecting from within that class, preference was directed to be given to employees of a particular company and their families did not alter the fact that the class of beneficiaries constituted a section of the public.
135. The situation here is very different. The preferred beneficiaries (namely the children and grandchildren of the Nephews) do not have to fall within the primary class. The primary class consists of "intelligent and promising young men of Orthodox Greek church religious belief born in Greece of Greek nationals also of Orthodox Church religious persuasion". The children and grandchildren of the Nephews do not have to meet any of these requirements in order to obtain benefits. Thus they do not have to be born in Greece of Greek Nationals, or be of Orthodox Greek Church religious belief, or be male, or be intelligent, promising or young. Their right to benefit is conferred solely by their relationship to the Testator (through the Nephews), not by membership of the primary class. They do not form a sub-set of the primary class. As they do not have to form part of the primary class, they cannot be considered as a section of the community and their inclusion therefore falls foul of the principle established in Oppenheim.
136. Advocate Alexander submits that, given that there are only seven grandchildren and four children (with the latter probably being past the age when they would wish to seek further university education) of the Nephews, their inclusion is not a practical issue. Furthermore, he relies on Lord Radcliffe's comment in Caffoor quoted above to the effect that the Privy Council contemplated the possibility that some kind of preference in selection would not cause a trust to lose its charitable status or public character. However, that observation was made in the context of the preferred class being a sub-set of the wider class.
137. That is not the situation here and accordingly I find that the Trust as a whole cannot be considered as a valid charitable trust because, insofar as monies may be applied for the education of the children and grandchildren of the Nephews (and they are entitled to priority over any young Greek men) such monies would not be applied for charitable purposes because the children and grandchildren do not form a section of the community. As Lord Browne-Wilkinson said in the passage from Wahr-Hansen quoted above and as this Court said in Greville Bathe, a trust must be exclusively charitable if it is to be classed as a charitable trust. The fact that the non-charitable objects may be comparatively few in number cannot affect this principle.
138. I should add that in his skeleton argument, Advocate Meiklejohn on behalf of the Attorney General, referred to three Commonwealth cases which he submitted were similar to Koettgen. These were Herbert v Cyr [1944] 2 D.L.R. 374, a case in the New Brunswick Supreme Court, and two Australian cases, namely Permanent Trustee Co of N.S.W Limited v Presbyterian Church (N.S.W) Property Trust [1946] 64 W.N.N.S.W. 8 and Public Trustee v Young [1980] 24 S.A.S.R. 407.
139. In Herbert v Cyr, the testatrix left the residue of her estate for "the education of poor boys and girls of merit - my relatives to have preference". The Court held that this was a valid charitable trust.
140. In Permanent Trustee Co of N.S.W., the testator left the residue of his estate upon trust to provide scholarships to students and intending students of any primary or secondary school in New South Wales, with preference to be given to descendants of the testator's father and others. This was also held to constitute a valid charitable trust.
141. Finally, in Public Trustee v Young, the testator bequeathed the residue of his estate to the Public Trustee for the income to be used to provide one or more scholarships to a named School of Mining with preference being given to employees of a named company. The Court held that, on its true construction, the clause in the will was a general trust for educational purposes in favour of the School and that the preference was simply an administrative direction to the trustee that, all other things being equal, eligible and willing employees from the company should get preference, but not otherwise. It was held to be a valid charitable trust.
142. It seems to me that all three of these cases could be subject to similar criticisms as have been levelled at the decision in Koettgen. However, they are also to be distinguished. On my reading, in all three cases, as in Koettgen, the members of the preferred class were simply a sub-set of the primary class which was eligible for educational benefit and the primary class was a section of the community. As in Koettgen, the cases therefore differed from the present case where the children and grandchildren of the Nephews are not a sub-set of the primary class and have no connection with the primary class in that they do not have to fulfil any of the criteria which define the primary class. Accordingly, even if the above three cases are accepted as being correctly decided, I do not consider that they assist the argument of the Greek Government in this case.
143. The starting position must be that, as the Trust is not for exclusively charitable purposes, it must fail as a whole. As Lord Browne-Wilkinson said in the passage quoted above from Wahr-Hansen at 81E:
144. Thus in Meaker v Picot, having held that the trust was not a valid charitable trust because monies could be applied for non-charitable purposes, the court held that the whole gift failed for uncertainty.
145. Similarly, Lord Radcliffe in Caffoor said this at 602:
146. However, the Attorney General and the Greek Government submit that this is not an inevitable result where invalid non-charitable purposes are mixed up with charitable purposes. I accept that one is faced with that situation here. The trust in relation to the children and grandchildren of the Nephews is a trust of indefinite duration as it is not limited to lives in being plus 21 years. Not being charitable, it is therefore void. On the other hand, the trust for young Greek men is, when viewed on its own, a valid charitable trust. The Attorney General and the Greek Government submit that in this situation the Court may in some circumstances uphold a trust to the extent that it is for charitable purposes.
147. The 11th edition of Tudor summarises the position in the following terms at 6-012:
148. Taking first the situation described in the last sentence of the quotation in the preceding paragraph, an example is to be found in Re Wright's Will Trusts, 29 July 1982, (unreported) [1982] Lexis Citation 1509. In that case, the testatrix left the residue of her estate for her trustees to apply the same at their absolute discretion for people and institutions who had 'helped' her and her husband including, amongst others, seven named charities. The Court held that the trust for those who had helped her and her husband was void for uncertainty. It was then submitted to the Court of Appeal that there were in fact two classes, namely those who had helped the testatrix or her husband on the one hand and the named charities on the other and accordingly the trust could be divided into a valid part and an invalid part. The Court of Appeal rejected that submission. In doing so, Fox LJ observed as follows:
149. To like effect is the decision of the House of Lords in Chichester Diocesan Fund v Simpson [1944] AC 341, where the testator, by his will, directed his executors to apply the residue of his estate "for such charitable institution or institutions or other charitable or benevolent object or objects in England" as they should in their absolute discretion select. The House of Lords held that a benevolent object was not necessarily a charitable object and that accordingly the entire bequest failed; see also the decision in Meaker v Picot (supra).
150. I do not consider that the present falls within this category. There is no general discretion to apply the whole fund or its income to the non-charitable purposes. The discretion of the trustee is limited to providing educational benefits for the children and grandchildren of the Nephews, with everything else being for charitable purposes in the form of the education of young Greek men.
151. I turn therefore to consider next the first situation described in the passage from Tudor cited at paragraph 147 above, namely where the void and charitable objects rank pari passu so that the gift may be capable of being apportioned between them.
152. Tudor at 6-012 describes the approach in this first situation in the following terms:
153. I was referred to two cases in support of this proposition, namely Hoare v Osborne (1865-66) L.R. 1 Eq. 585 and Re Clarke [1923] 2 Ch 407.
154. In Hoare v Osborne, the testatrix bequeathed £600 upon trust to apply the income in keeping in good repair (i) a monument in a named church; (ii) a vault in which her mother was interred; and (iii) an ornamental window in the church, with any surplus being applied for specific charitable purposes. The Court held that (i) and (iii) were charitable purposes, but that (ii) was not. Having reached this decision, the judge, Sir R T Kindersley, VC, said at 588:
Thus one-third fell into residue, with the remaining two-thirds being upheld.
155. In Re Clarke, the testator gave his residuary estate to (a) indefinite charitable objects, (b) and (c) two named charities, and (d) such indefinite charitable and non-charitable objects as his executor should think fit; and directed that the residue should be divided amongst (a), (b), (c) and (d) in such shares and proportions as his executor should determine. Romer J held that (d) was invalid and the question then arose as to whether the entire gift was void or only (d). The judge held that this was not a case where the executors in exercise of their discretion could apply the whole fund to non-charitable objects and that accordingly that part which was to be devoted to charity should be upheld. He held that the power of appointment was invalid and that accordingly the property was vested in all four objects or sets of objects. Applying the principle that equality is equity and following Hoare v Osborne, he held that the estate was held equally for the four objects. The estate therefore passed as to one-quarter to each of the three valid objects and on intestacy in respect of (d) which was invalid.
156. I do not consider that the present case falls within Tudor's first situation. Under the terms of the Trust, the income is not to be applied in such a way that neither part of the income is residuary upon the other. On the contrary, preference is to be given to children or grandchildren of the Nephews and only thereafter is the income to be applied for young Greek men. It therefore falls within either the second or third situations as described in Tudor.
157. Turning to the second and third situations (as described in the extract quoted at paragraph 147 above), Tudor states as follows at 6-014:
158. The passage from the judgment of Jenkins J in Re Coxen referred to by Tudor is as follows:
As can be seen, Jenkins J is dealing with the second and third situations described in Tudor, albeit that he summarises the position in four propositions.
159. It seems to me that the present case is of the type summarised by Jenkins J in that the income is to be applied preferentially for the children and grandchildren of the Nephews and subject thereto, for the young Greek men. The Court therefore needs to consider whether the void gift to the non-charitable purpose (i.e. the further education of the children and grandchildren) can be quantified and/or whether the Trust falls within (d) of Jenkins J's categorisation. For ease of reference I shall hereafter sometimes refer to the non-charitable provision for the children and grandchildren as "the family trust". Furthermore, when I refer simply to, for example, "category (a)", it is a reference to the relevant category from the categorisation of Jenkins J in Coxen quoted at paragraph 158 above.
160. The evidence and submissions before the Court at the original hearing did not really address these issues. Accordingly, on 15 June 2023, I circulated a draft judgment substantially in the terms of paragraphs 1 to 159 above together with a direction that the Representor should file an affidavit addressing the issue of quantification of the amount needed for the non-charitable family trust and that the parties subsequently file supplementary submissions dealing with the remaining issues.
161. Mr Stephen Le Seelleur of the Representor has filed a detailed affidavit on the topic of quantification and the parties have filed supplementary submissions on the remaining issues. These submissions are very detailed and I have found them extremely helpful. I am most grateful for the assistance given by the parties.
162. I think it is convenient to consider the remaining issues in the following order given the nature of the parties' supplementary submissions:
(a) Does the general exception referred to in category (d) of Coxen in fact exist?
(b) If so, does the Trust fall within category (d)?
(c) If the answer to either of the above questions is no, is the amount needed for the void non-charitable family trust capable of quantification so that the Trust can take effect for young Greek men with regard to the amount not needed for the family trust?
163. In their supplementary submissions, the Nephews contend that category (d) does not exist and that the only exception to the principles set out in categories (a) and (b) of Coxen is that of the tomb cases described in category (c). As a secondary submission, they say that, even if category (d) does exist, the terms of the Trust do not fall within it. Conversely, the Greek Government and the Attorney General submit that category (d) is correct and that, properly construed, the Trust falls within it. It is of course the case that all the textbooks and cases referred to are dealing with English law and accordingly, having resolved the argument between the Nephews on the one hand and the Attorney General and the Greek Government on the other, I must decide whether Jersey law is to like effect.
164. Advocate Meiklejohn, on behalf of the Attorney General, takes a preliminary point. He notes that Coxen was referred to by him in his original submissions and that, prior to the supplementary submissions, no party had queried the existence of category (d). Furthermore, the direction which I issued on 15 June (see paragraph 160 above) had assumed the existence of category (d). It was therefore now too late, he submitted, for the Nephews to seek to challenge the correctness of Coxen in relation to category (d).
165. The argument raised by the Nephews has indeed come late in the day but I have concluded that they should be permitted to take the point. It is a question of pure law and so does not affect the production of evidence in any way. Furthermore, following the direction which I issued, the Nephews filed their supplementary submissions first. Accordingly, it was known by the other parties that the Nephews were taking the point and the other parties have all had full opportunity to respond, and have indeed done so in some detail. Accordingly, I see no prejudice to the other parties in allowing the point to be argued.
166. The parties have referred me to what appear to be all the relevant cases in this area and I have carefully read them all. However, I do not think it is necessary to refer to them all in this judgment or to descend into the facts of most of the cases, although this was helpfully done in the parties' submissions.
167. I think that the simplest way of addressing this first issue is to start with a brief summary of how the cases had developed prior to the decision in Coxen.
168. For our purposes, the story begins with Chapman v Brown (1801) 6 Ves Jun 404 where the testatrix left the residue of her estate to her executors for the purpose of building or purchasing a chapel, with any surplus to be used to pay £20 per annum to a minister with any surplus thereafter being applied for general charitable purposes. The first two purposes were held to be void but of course the trust for general charitable purposes was, when viewed on its own, valid. The Master of the Rolls held that, if it could be ascertained how much would have been employed by the executors for the first two purposes, the charitable bequest would have been valid as to the remainder. However, he found it impossible to ascertain how much would have been required for the first two purposes and therefore how much was to be held on the residuary charitable trust. In the absence of any certainty as to subject matter, that bequest had to fail as well as the first two and accordingly the whole residuary estate passed on intestacy.
169. In Mitford v Reynolds (1841) 1 Ph 185, the testator directed his executors to build a monument for him and three relatives, with the remainder being held for purposes which the Court held to be charitable. On the assumption that the bequest for the monument was void, the Lord Chancellor applied the principle of Chapman v Brown but concluded that, on the facts of this case, the amount necessary for the monument was capable of being quantified on inquiry by the Master and accordingly did not hold that the charitable bequest failed.
170. As can be seen, categories (a) and (b) of Coxen reflect the principle established by Chapman v Brown and applied in subsequent cases, including AG v Hinxman (1820) 2 Jac & W 270; Fowler v Fowler (1864) 33 Beav 614; Re Taylor (1888) 58 LT 538 and Re Porter [1925] 1 Ch 746.
171. The first case of a series which have led to the establishment of the exception in category (c) of Coxen concerning tomb cases was Fisk v Attorney General (1867) LR 4 Eq 521. In that case, the testatrix gave £1,000 to the rector and church wardens of a parish and their successors upon trust to apply such of the income therefrom as should from time to time be necessary to keep her family grave in repair and to pay or divide the residue of such income once a year to or amongst the aged poor of the parish. The latter was a valid charitable trust but provision for the family grave was void.
172. Wood V-C considered Chapman v Brown but held at 524 that, on the proper construction of the will, there was a gift to the rector and church wardens of the whole of the fund subject only to a gift of a portion for a purpose which had failed. They were therefore entitled to the whole fund free of the void charge. He went on to say at 527 that, if the proper construction had been that the gift of the residue of the fund had been exclusive of the amount required for the repair of the grave, this would have been a case where the amount required for the void purpose could have been ascertained, so that the rest of the £1,000 would be held on the charitable trust for the poor, but that the better construction was that the whole gift was taken by the rector and church wardens.
173. Following the decision in Fisk, there was a line of cases which have given rise to the tomb exception described in category (c) of Coxen. Those I have been referred to (in chronological order) are Hunter v Bullock (1872) LR 14 Eq 45; Dawson v Small (1874) LR 18 Eq 521; Re Williams (1877) 5 LR Ch 735; Re Birkett (1878) 9 Ch D 576; Re Vaughan (1886) 33 Ch D 187; and Re Rogerson [1901] 1 Ch 715.
174. It is clear that the tomb cases have come to be regarded as a special exception based upon the trust for repair of a grave being regarded only as an honorary trust - see for example Dawson v Small at 118; Re Rogerson at 719 and Tudor at 6-015 (quoted above at para 157). Nevertheless, that is not the basis upon which Fisk itself was decided. As I read the judgment in that case (summarised at paragraph 172 above), this was an example of category (d). In other words the gift was construed by the Vice-Chancellor as providing that the whole fund was given to the charitable purpose subject only to payments for the void purpose, namely maintaining the grave. In view of the invalidity of the grave maintenance provision, the whole gift was held for the charitable purpose. There is no suggestion in the judgment of a special exception for cases concerning graves; the fact that the invalid prior gift was for the maintenance of a grave rather than for some other purpose was not relevant to the Vice-Chancellor's decision.
175. A case which did not involve prior provision for the maintenance of a grave is the Irish case of Kelly v Attorney General (1917) 1 IR 183. The facts of that case were that the testator bequeathed certain lands to his trustees on trust to apply the income of the lands for the erection of a parish chapel and parish house on a specified part of the lands. Once the chapel and house had been built, the rest of the land was to be held upon trust to pay half the income to the parish priest for the saying of masses and the other half to be divided annually amongst the poor of the parish. These last two purposes were both held to be charitable purposes.
176. Following the death of the testator it was established that there was no need to erect a parish chapel or parochial house as there was already a parish chapel and parochial house in the immediate neighbourhood. Most significantly, as a result of this, the bishop refused to give permission for the erection of a chapel or parochial house on the specified part of the land. It followed that the trust in respect of the chapel and the parochial house could not be fulfilled.
177. It was contended on behalf of the heirs of law that it was impossible to say how much would have been needed for that purpose and accordingly it was impossible to say what was left for the charitable purposes. Accordingly, following Chapman v Brown, the whole gift failed and the value of the lands (which had been sold by then) all passed on intestacy. The Attorney General submitted that the whole fund should be devoted to the charitable trust, i.e. half to the parish priest for the celebration of masses and half for the poor of the parish.
178. O'Connor MR introduced his consideration of Chapman v Brown in the following terms at 189:
179. Having discussed the argument based on Chapman v Brown, O'Connor MR went on to say at 190:
Accordingly, he held that the whole fund was held upon the final charitable trusts.
180. This was the state of the authorities when the 5th edition of Tudor was published in 1929, which was the edition referred to by Jenkins J in Coxen. The relevant text was as follows at 61-62:
Footnote (n) refers to Kelly, footnote (o) refers to the cases listed at footnote (p) and footnote (p) lists a number of cases, all of which were tomb cases.
181. I turn now to Coxen. In that case, the testator left the residue of his estate to the Court of Aldermen upon trust (i) to apply £100 per annum for a dinner for the Court of Aldermen, (ii) to pay one guinea to each Alderman who attended a committee meeting in connection with the trust, and (iii) to apply the balance for specified charitable purposes. The issue before the court was whether the trusts at (i) and (ii) were charitable trusts and, if not, what the consequences were.
182. Having stated the facts and key submissions, Jenkins J began his judgment with the passage quoted at paragraph 158 above. He then considered the possible consequences if the trusts at (i) and (ii) were invalid and said as follows at 754:
Thus the judge was saying that, if the trusts at (i) and (ii) were invalid, this was a case falling within category (d). However, he went on to hold that the trusts at (i) and (ii) were valid. It follows that his observations in the passage quoted at paragraph 158 above were obiter.
183. Despite that, the passage from Coxen (including category (d)) has been treated in subsequent editions of Tudor (see paragraph 157 above in respect of the 11th edition) as accurately stating the position under English law. Similarly, Jarman on Wills (8th edition, 1951), having quoted the passage from Coxen says at 487 in respect of category (d):
184. Advocate Holden and Advocate Kistler have each filed submissions. I shall for convenience refer simply to the submissions of the Nephews to encompass both sets of submissions.
185. The Nephews submit that Jenkins J was wrong to say that category (d) existed because there was no proper basis for him to do so. The true position is as set out in categories (a) and (b), based upon Chapman v Brown and the cases which followed it. The sole exception is that of the tomb cases as set out in category (c). I would summarise the grounds which they put forward in support of this submission as follows:
(i) None of the cases listed by Jenkins J at the conclusion of his summary of the four categories in fact supports the existence of category (d). They are all cases involving categories (a) or (b) or a tomb provision.
(ii) Apart from the listed cases, Jenkins J also referred to Tudor, 5th edition, in support of his four categories. However, the only non-tomb authority mentioned in Tudor in support of the principle which Jenkins J summarised as category (d) was Kelly at footnote (n). Kelly was not a satisfactory authority. There was no proper analysis or explanation of why the judge felt able to depart from the principles established in Chapman v Brown and succeeding cases. In any event it was an Irish case. It had not been adopted and followed in any English decision.
(iii) Thus there was no proper basis for the existence of category (d) either in the cases listed by Jenkins J or in the cases used by the 5th edition of Tudor to support the text which suggested the existence of category (d).
(iv) The tomb cases were described as a special rule and as something of an anomaly; see the observation of Burchett AJ in the Supreme Court of New South Wales in South Eastern Sydney Area Health Service v Wallace [2003] NSWSC 1061 at paragraph 1. Furthermore, in Re Porter (cited above), Eve J said at 750 that he did not think he should extend the application of tomb cases to something which was not a tomb (in that case a masonic temple). The suggestion that tomb cases should be narrowly confined as being something of an anomaly pointed against a general exception on the lines of category (d).
(v) If category (d) existed, there was no need for category (c) as all the category (c) cases would fall within the wider terms of category (d).
(vi) Although, as submitted by the Greek Government and the Attorney General, it was true that Jenkin J's summary had been referred to in a number of subsequent cases, this was merely in passing. There was no case where category (d) had specifically been followed and applied.
(vii) A general exception on the lines of category (d) would turn on fine, artificial and therefore undesirable distinctions as to the manner in which particular bequests are expressed and therefore whether the wording falls within category (d) or categories (a) and (b).
186. In my judgment, category (d) of Coxen should be regarded as an accurate statement of the position under English law. I would summarise my reasons for so concluding as follows.
187. First, although I accept that the sources relied upon by Jenkins J in formulating category (d) could be said to be somewhat slender, I do not think they are quite as slender as the Nephews suggest. It is true that the two key pillars of support were the text in the 5th edition of Tudor (quoted at paragraph 180 above) and the decision in Kelly. However, there were two matters which gave additional support to category (d).
188. In the first place, Jenkins J referred to Re Parnell [1943] 1 Ch 107 as one of the cases which supported his statement about the four categories. That was not a case which concerned charitable trusts. In that case the testatrix left the residue of her estate - defined as the 'residuary trust fund' - on income trusts as to various sums to certain of her relations for life and after their deaths as to the capital of each such trust for such relation's children. Her will then went on to provide that "As to all the remainder of the trust fund I direct that my said trustee shall stand possessed thereof for Harry Duncan Nourse". After the testatrix's death, one of the relations died without children. The issue was therefore whether the fund of £2,000 which had been left on trust for the relation and his children fell within "all the remainder of the residuary trust fund" so as to pass to Mr Nourse or did not do so and therefore fell into intestacy.
189. In this context, Uthwatt J said at 109 (omitting references):
The judge went on to hold that the correct construction of the will meant that the remainder included everything which it did not pass under the specific trust for the relation and accordingly formed part of the residue payable to the estate of Mr Nourse (who had died after the death of the testatrix). In my view, the principle described by Uthwatt J has some relevance to the circumstances which Jenkins J was considering in Coxen and gives some support by analogy to the existence of category (d). It is of note that Jarman is also of this view; see the extract quoted at paragraph 183 above.
190. Category (d) also derived some support from the decision in Fisk. As I have described earlier, although the exception for tomb cases has come to be regarded as based on specific matters such as the honorary nature of a trust to maintain a tomb, an analysis of the decision in Fisk, which was the foundation of the tomb cases, suggests that the judge was simply construing the will in that case in the manner summarised by Jenkins J in category (d) (see paragraph 174 above).
191. Secondly, whilst I accept that there is no subsequent English case in which category (d) has been specifically referred to and applied, it was applied by necessary implication in Re Norton's Will Trusts [1948] 2 All E R 842, a decision of Jenkins J himself only a matter of months after his judgment in Coxen. In that case the testator left £500 for purposes which the judge held to be charitable subject to a provision for the maintenance of a grave. Having held that the grave provision was invalid, the question arose as to whether this invalidated the gift to charity. The judge held that it did not in the following terms at 844:
192. Although no reference is made by Jenkins J to his decision in Coxen, the first reason which he gives for upholding the charitable object is expressed in the same terms as category (d). The fact that he then states that his conclusion can also be justified under the tomb cases makes it clear that he was in fact applying category (d) as one of his two alternative grounds for upholding the charitable bequest.
193. Thirdly, category (d) has been referred to in a number of cases with apparent acceptance that it correctly reflects the law. I have been referred to the following:
(i) In the Canadian case of Re Doering [1948] O.R. 923, the testator left his estate upon certain family trusts for a period and subject thereto on charitable trusts. An issue arose as to the validity of the family trust and the judge held that it was valid. It follows that the court was not concerned with the issue before this Court, namely an invalid non-charitable gift and a charitable trust. Accordingly, as Advocate Holden correctly submits, what the judge said about Coxen was obiter. Nevertheless, the judge expressed views which were entirely consistent with category (d). Thus on page 12 of the report which is before this Court, he said:
The clear inference from the judge's observations is that, if it had been necessary, he would have construed the will in that case in accordance with category (d).
(ii) As Advocate Holden emphasised, Wallace (referred to at paragraph 185(iv) above) was a tomb case, i.e. a provision for a tomb followed by a residual gift to charity. The judge held that the tomb provision was invalid and accordingly the question arose as to whether this affected the validity of the gift to charity. Having quoted the passage from Coxen at the outset of his judgment and noted that it was treated as representing the law in Jarman on Wills 8thedition and as being authoritative in Theobald on Wills (15th edition, 1993), the judge considered at [15] whether there was a problem by reason of categories (a) or (b) of Coxen. He went on to say:
He then went on at [16] to explain why the case fell within category (d) and expressly relied on Kelly and on the passage from Re Norton which I have quoted earlier. He then held at [17] that category (c), the tomb cases, was an alternative way of reaching the same conclusion. In short therefore, this was a case where category (d) was specifically applied as one of two alternative grounds for concluding that the whole amount, including what would have been required for maintenance of the tomb, passed to the charity.
(iii) Re Kung came before the Courts of Hong Kong at three levels, namely at first instance, the Court of Appeal and the Court of Final Appeal. The case involved the proper construction of a home made will made by the testatrix. The main issue was whether a charitable foundation took the residue absolutely or whether it took as trustee of a charitable trust subject to certain provisions set out in clauses 2, 3 and 4 of the will. The judge held that the foundation took as trustee and his decision was upheld by the Court of Appeal and the Court of Final Appeal. There was no suggestion that any of clauses 2, 3 and 4 was invalid and accordingly, as Advocate Holden correctly pointed out, the case was very different from the present one. However, I was referred to certain observations from the judgment of the Court of Appeal, reported at Re Kung (2014) 17 ITELR 662, where that Court was considering the issue of certainty of subject matter in the context of clause 4 not being a charitable provision. Having at [99] quoted the statement of Jenkins J in Coxen, the Court of Appeal went on to say this at [100] and [101]:
I accept that the observation of the Court of Appeal was obiter and not necessary for its decision. Indeed the Court of Final Appeal did not find it necessary to comment on what the Court of Appeal had said or to refer to Coxen. However, it is the case that if clause 4 had been invalid, the Court of Appeal would have applied category (d) and would have construed the will as providing that the whole fund would be held on the charitable trust. It does therefore provide some further indication that Coxen is regarded as accurately stating the law in this respect.
(iv) The final case where Coxen has been referred to is Plummer v Attorney General of New South Wales [2018] NSWSC 869, a decision of the Supreme Court of New South Wales. It was a factually complex case and it is not necessary to summarise the facts. The Court decided the case by reference to the various documents which constituted the various trusts which were the subject of dispute. However, the Court alluded to Coxen in the following terms:
Again, this observation was clearly obiter. Furthermore, as Advocate Holden pointed out, it was an observation made in the context of a statute which dealt with the position. Nevertheless, it can be said to be a further example of a court apparently having no difficulty in accepting the validity of category (d).
194. In short, category (d) has been referred to with apparent approval by courts in Canada, Australia and Hong Kong, including in recent times. Although, except for Wallace (where category (d) was one of two alternative grounds for the decision), the observations were obiter and not necessary for the decision at hand, the fact remains that in not one of these cases is there any suggestion of any question mark over the existence of category (d) or the accuracy of Jenkin J's formulation of the four categories.
195. Fourthly, leading textbooks refer to category (d) with apparent approval. I have already quoted the relevant part of Tudor (11th edition) (see paragraph 157 above) which clearly treats Coxen as being accurate. Jarman on Wills, 8th edition (1951) quotes the passage from Coxen at 485 and then goes on to consider each of the four categories in turn. Category (d) is described at 487 in the terms quoted at paragraph 183 above.
196. Halsbury, Laws of England Volume 8 deals with the matter as follows at page 92:
The observation in the final paragraph cites Kelly and a number of the grave cases in support.
197. Finally, according to paragraph 1 of the judgment in Wallace, Theobald on Wills (15th ed, 1993 at 471-472) also accepts the statement by Jenkins J as authoritative, although I have not been specifically referred to the relevant extract from Theobald.
198. Fourthly, I do not accept the Nephews' submission that the existence of category (d) would render category (c) superfluous as all grave cases would fall within category (d). As Advocate Meiklejohn pointed out on behalf of the Attorney General, category (c) does not depend on the form of the gift and whether it applies to the whole fund. The rationale for category (c) is said to be that a trust for the maintenance of a grave is purely honorary. Accordingly, category (c) does not require any particular language. Conversely, category (d) will only apply if the charitable gift can be properly construed as applying to the whole fund subject only to the payments required for the non-charitable purpose. As nothing is required for this purpose (as it is invalid), the whole passes to the charitable purposes. Whilst in many cases the facts will fall within both category (c) and (d) (as in Re Norton), this is not necessarily so. A provision for the maintenance of a grave falling within category (c) will not necessarily meet the constructional requirement described in category (d). That is why category (c) is described as a special rule.
199. Fifthly, I do not accept the submission that category (d) should be rejected as it will lead to decisions which turn on fine and artificial distinctions depending on the exact manner in which the will is expressed. The existence of category (d) will of course require a court to consider the exact terms of the will and some cases will be found to satisfy category (d) whereas others will not. However, it is part of a court's regular diet to construe statutes, contracts and documents such as wills and trust deeds. Different decisions can be reached depending on the exact terms in which the relevant provision is expressed. I see no reason why category (d) should prove particularly difficult so as to lead this Court to reject its existence despite its apparent acceptance in textbooks and in other jurisdictions since 1948.
200. In summary, whilst I accept that the pre-existing authority for category (d) could be described as somewhat slender, there was nevertheless some authority to justify it and it appears to have been accepted as accurate since then both in case law and in textbooks. It is of note that I have not been referred to a single case or textbook which questions the existence of category (d).
201. Accordingly, for the reasons which I have given, I accept that the statement by Jenkins J in Coxen is an accurate statement of the position under English law. None of the parties has suggested to me that Jersey law should differ from English law in this respect and I see no good reason to hold that it does. On the contrary, it seems to me that there is much to be said for category (d). Although he is discussing two charitable gifts rather than one charitable and one non-charitable provision, I find the sentiments expressed by O'Connor MR in Kelly (quoted at paragraph 178 above) persuasive. If on a proper construction, the testator is found to have intended that the whole fund should go for charitable purposes subject only to a prior non-charitable provision and such non-charitable provision is found to be invalid, why should the whole charitable gift fail and the estate pass to the testator's heirs at law on intestacy? This would not be consistent with the testator's intention.
202. Accordingly, even if I had found that category (d) did not exist under the law of England, I would nevertheless have held that Jersey law should apply it as being a proper and sensible approach which honours, so far as possible, the expressed intention of the testator.
203. The Nephews submit that, even if category (d) exists, the terms of the Bequest do not fall within it. On the contrary, they submit that this is a standard provision whereby the Will directs that assets are applied first and in priority to the trust for children and grandchildren and only thereafter for the further education of young Greek men. That is because the Bequest specifically provides that the children and grandchildren are entitled to priority. The Nephews submit that the Bequest therefore falls within category (a) or (b) depending on whether the amount required for the further education of the children and grandchildren is capable of quantification.
204. Despite this submission, I am of the clear view that, properly construed, the Bequest falls within category (d) (and the third situation as classified in Tudor). My reasons for reaching this conclusion are as follows:
(i) The relevant provision at clause 11(vi) and (vii) of the Will is set out in full at paragraph 4 above. It begins by saying that, upon the death of the last surviving Nephew, the whole fund is to be paid to the Greek Government for the purpose of creating a Pret d'Honneur trust known as the Dr Constantine Mattas Scholarship Fund and that the income of this fund is to be applied for the further education of young Greek men; in other words for a charitable purpose. This is the principal gift.
(ii) This provision is then made 'subject to the proviso' concerning the children and grandchildren. The proviso is set out at clause 11(vii) and begins by stating 'provided always' that the children and grandchildren should be '..entitled to priority to further education in the manner aforesaid...'. It seems to me that the natural construction of these two sub-paragraphs is that the fund is intended for the young Greek men (i.e. a charitable purpose) subject only to any amount that is required for the children and grandchildren.
(iii) It is not therefore a case, as in many of the authorities, where there is a trust to pay the income or capital for the invalid purpose with the 'remainder' or 'surplus' being held for the relevant charitable purpose. The Bequest starts by establishing the charitable trust for young Greek men but simply makes it subject to any priority payments for the children and grandchildren.
(iv) The Nephews place reliance on the fact that the children and grandchildren have priority. But, as can be seen from the opening words of the passage from Coxen (quoted at paragraph 158 above), all four categories in Jenkins J's formulation (including category (d)) are cases where "..a fund or the income thereof is directed to be applied primarily to purposes which are not charitable and as to the balance or residue to purposes which are charitable". The fact that the children and grandchildren have priority does not of itself assist in determining whether the provision of the Will falls within category (d) or category (a) or (b).
(v) The payments to the children and grandchildren will be finite in that there will come a time when they have all died or no longer wish to receive support for further education, yet the Trust for young Greek men will continue indefinitely. Indeed, it must have been within the reasonable contemplation of the Testator that there might be no children or grandchildren who wished to pursue post-graduate education, in which event there would be no call upon the income of the Trust for that purpose and the whole income would be devoted entirely to a charitable purpose, namely the further education of young Greek men.
(vi) Standing back, if I ask myself whether the intention of the Testator, as derived from the words he has used in the Will, is that the gift to the trust for young Greek men is a gift of the entire income subject to the payments thereout required to give effect to the provision for the children and grandchildren, I am in no doubt that it is. Given the invalidity of the provision for the children and grandchildren, this means that the entire fund and income is held on the trust for young Greek men.
(vii) I bear in mind the approach stated by Uthwatt J in Re Parnell at 110 that "If the words of the will are rationally capable of two constructions, and one of them results in an intestacy and the other does not, one should prefer the latter construction". I have not found it necessary to rely on that observation but, if I had been less clear as to the correct construction, it would be an additional reason to prefer the construction which I have adopted.
205. It follows that, the provision for the children and grandchildren being invalid for the reasons I have given, the whole fund (including any amount which might otherwise have been applied for the children and grandchildren), will on the death of the last surviving Nephew pass to the Greek Government for the income to be applied solely for the further education of young Greek men in accordance with the terms of clause 11(vi) but without being subject to the proviso in clause 11(vii).
206. In view of the conclusion which I have reached as to the applicability of category (d), it is not strictly necessary to consider this aspect. However, in case I am wrong in holding that category (d) exists and/or that it applies to the terms of the Will, I propose to consider this aspect briefly.
207. It is to be recalled that categories (a) and (b) provide that, where the amount applicable for the invalid non-charitable purpose can be quantified, the gift fails in respect of that amount but takes effect in favour of the charitable purpose as regards the balance. Conversely, where the amount applicable to the invalid non-charitable purpose cannot be quantified, then both the charitable and non-charitable trust fail because it cannot be said what part of the fund is held upon the charitable trust and accordingly there is no certainty of subject matter in relation to that trust.
208. As stated at paragraph 160 above, in order that the Court could consider this argument, the Representor was directed to provide evidence about the capital value and income of the trust fund, both for the date of death and at the present time and to obtain, so far as practicable, evidence of the costs of post-graduate university education, both at the present time and in 1979. The Representor has made commendable efforts to obtain this information and the parties have very properly acknowledged the lengths to which it has gone.
209. As to the capital value and income, the affidavit of Mr Le Seelleur states that the Executor prepared a statement as at 8 September 1981. It shows a capital value of the estate at that date of £2,321,516 together with a net income since the date of death which amounted to an annual income of £131,945. As at 30 November 2022 (the latest available accounts), the capital value was £26,865,868 and the net annual income was £487,833.
210. As to the cost of post-graduate education, the Representor has investigated such costs for courses starting in September 2023 at five universities in England (albeit that Cardiff is in Wales), namely Cambridge, Cardiff, Durham, Exeter and University College London. At each university, the Representor has investigated the cost of four post-graduate courses, namely an MSc in Civil Engineering, MSc in Economics, MA in Archaeology and LLM in Law (the terminology used at Cambridge differs other than for law). It has not obtained any information about the costs of post-graduate courses at universities in France, Germany, Italy or any of the countries previously forming part of the USSR.
211. There is considerable variation in the purely educational costs between the various courses at the same university. For example, the costs at Durham vary from £28,500 for civil engineering to £24,500 for economics, a difference of some £4,000 per annum.
212. There is also considerable variation in the educational costs as between the different universities. For example, in relation to civil engineering, the cost for international students at the five universities varied from £25,450 to £35,673, a difference of some £10,000. I should add that the Representor has produced figures both for home students and for international students but, given the Testator's background and lack of connection with the UK, it seems to me that the Court should proceed on the basis of the costs for international students.
213. It seems to me that the terms of the Trust are wide enough to enable the Greek Government to pay for maintenance costs of pursuing such further education as well as the purely educational fees. The Representor has helpfully produced information about maintenance costs for 2023. These also vary between universities, from the lowest annual figure of £9,300 to the highest figure of £16,522, a difference of some £7,000 per annum.
214. The Representor has prepared average costs across the different courses for each university and has then prepared an aggregate average figure for each university for the combined educational and maintenance costs. These vary from £31,562 to £50,216, a difference of some £18,654.
215. I acknowledge that the lowest figure is that of Cardiff, which is not in England if the Will is construed as limited to that country. However, I would be surprised if there were not other universities in England with a similar cost level. Even if one takes the figure for the least expensive of the English universities considered by the Representor (£35,647), there is still a variation of some £14,500 per annum below that of the highest figure.
216. It has not proved possible for the Representor to obtain information about the costs of post-graduate education at the above universities in 1979. Accordingly, the Representor has used the Bank of England's inflation figures in order to calculate the equivalent of each of the 2023 figures as at 1979. These calculations show that the average educational and maintenance costs for each university as at 1979 (i.e. the equivalent of the figures in the preceding two paragraphs) vary from £6,735 at the cheapest university (Cardiff) to £10,715 at the most expensive, i.e. a difference of some £3,940. If one takes the cheapest of the four English universities at £7,606, the difference is £3,109.
217. The Greek Government submits that the Court should take a broad view when deciding whether sufficient quantification is possible for the case to fall within category (a). Advocate Alexander sought to draw an analogy with the decision in Re Golay's Will Trusts [1965] 1 WLR 969 where the court held that a direction to pay a 'reasonable income' to a beneficiary was sufficiently certain to be enforceable as, if there were a dispute, the court would be able to determine what was a reasonable income. Thus, submitted Advocate Alexander, the Court in this case should take a broad view as to what might be required for the family trust, so there would be sufficient certainty of what was left for the trust for young Greek men.
218. Advocate Alexander accepted that, if the Court's task was to put a specific value in pounds sterling on the amount necessary to satisfy the non-charitable family trust in 1979, such an exercise would be difficult given the variables involved in such a calculation. However, he submitted that it was not necessary to consider matters as at the date of death when the Will came into effect. There was always going to be a long delay before the Trust itself came into effect because of the accumulation period of twenty years and then the life interest to the Nephews; indeed it has still not come into effect some forty-three years after the Testator's death. The trustee of the Trust did not need to consider certainty of subject-matter as at 1979; this would only become relevant when the Trust comes into effect following the death of the last surviving Nephew. At that stage, it would be simple to ascertain on inquiry whether any of the limited number of children or grandchildren would wish to pursue further education and in what circumstances.
219. Even assessing the position at the present time, it was reasonable to assume that no further grandchildren are likely to be born given the ages of the children (between 49 and 54), that none of the children will wish to pursue post-graduate education and that there is every chance that none of the seven grandchildren (aged between 8 and 32) will wish to pursue post-graduate education (as opposed to under-graduate education). Following inquiry of the class of beneficiaries as to their intentions, an amount can be set aside to reflect the maximum amount reasonably required. The balance would then be available for the charitable trust.
220. Alternatively, the Court should proceed on the basis of the sort of projections discussed by the Attorney General, which would provide sufficient certainty of subject-matter for the charitable trust to be valid.
221. On behalf of the Attorney General, Advocate Meiklejohn agreed with the submission of both Nephews that the time for judging the validity of the Trust is the date of the Testator's death in 1979, not the present time or as at the death of the last surviving Nephew. But he submitted that it is possible to quantify the maximum amount which could realistically be attributed to the non-charitable family trust by reference to sensible estimates or assumptions as at 1979 as follows:
(i) Each Nephew would have four children.
(ii) Each child of a Nephew would in turn have four children.
(iii) This gives a total of forty persons who would be eligible for benefit from the invalid family trust.
(iv) Given that the family trust (if valid) would not have come into effect until after the twenty year accumulation period and the death of the last surviving Nephew, the Nephews' children would be likely to be middle aged by the time the Trust came into effect and unlikely to seek further education. Furthermore, most graduates, even if of a suitable age, do not go on to post-graduate work and did not do so in 1979. Even if it is assumed that every one of the hypothetical forty potential beneficiaries would have gone to university, it is extremely unlikely that as many as 25% would have gone on to post-graduate work. On a generous assessment, if one assumed that 25% of the forty potential relatives would go on to post-graduate work, that would result in ten of the children and/or grandchildren possibly wishing to benefit from the invalid family trust.
(v) Taking the highest average cost (education fees and maintenance) for an international student in 1979 gives a figure of £10,715.65.
(vi) The cost for a one year post-graduate course for ten students at 1979 rates would therefore come to a total of £107,156.50.
(vii) Assuming an average of a two year post-graduate course, this would give the total cost for ten students of £214,313 at 1979 rates. This would therefore be the estimated maximum cost of fulfilling the invalid family trust.
(viii) The residuary estate as at date of death was £2,018,462.18 (the difference from the figure quoted at paragraph 203 above is because the Attorney General has taken the value of the net residuary estate as at the date of death, i.e. excluding income and capital gains between the date of death and the date of the accounts on 8 September 1981). From that had to be deducted tax, fees and administration expenses of £46,942.96 and legacies, bequests, annuity funds etc of £182,770.16, leaving a net residuary estate at death (excluding post-death income and profit on sales of shares since death) of £1,788,767.06.
(ix) The estimate of £214,313 for the total costs of fulfilling the invalid family trust represents just under 12% of the net residuary estate at date of death.
(x) On the assumption that the increase in the educational costs and maintenance would broadly correspond to the increase in the value of the residuary estate, the Court should apply the same percentage to the current value of the Trust as being the amount reasonably attributable to the invalid family trust, with the result that the remainder would be held upon the charitable trust for young Greek men.
222. Advocate Meiklejohn accepts that these figures can be varied by changing the assumptions. He also accepts that there is no data for universities in France, Germany, Italy or the former countries of the USSR, that the use of an inflation calculator necessarily results in approximate figures, and that there were many other universities in England in 1979 which no doubt offered other post-graduate courses than the four investigated by the Representor. Nevertheless, he submits that the estimate is generous to those interested in the family trust given that the figure of ten relatives who might be expected to benefit under that trust is a generous one, the estimate takes the highest figure for the annual cost of tuition and maintenance and there is an assumption that the whole of the educational maintenance costs of a beneficiary would be paid for rather than merely a contribution towards them. The Court could therefore properly find that no more than this sum would be required for the invalid family trust.
223. The Nephews submit that there are too many uncertainties. Thus the amount to be awarded to any child or grandchild is at the discretion of the trustee; in 1979 it would not be known (i) how long the Nephews would live (the Trust only taking effect after the death of the survivor), (ii) the number of children and grandchildren the Nephews would have, (iii) the number of them who would engage in further education, (iv) the number of them who would ask the trustee for payment towards their further education and the amount of income which would be available in the Trust.
224. There was similar uncertainty in relation to the costs. There was no evidence in relation to the costs of further university education in France, Germany, Italy or the former countries of the USSR; there were many other universities in England and many other courses where the costs would be different from the amounts before the Court; apart from fees and maintenance, there could well be further expenses in the provision of further education such as the purchase of equipment; and a child or grandchild might fail and then choose to re-take the course thereby requiring further funds.
225. All these uncertainties, submitted the Nephews, were to be contrasted with the few cases where the court had held that the invalid prior gift could be quantified. Thus in Mitford v Reynolds, the invalid bequest was to build a monument for a grave. The Lord Chancellor held that he could direct an inquiry as to the amount required because the exact location, size and nature of the monument were known, unlike in Chapman v Brown. Similarly, in Coxen, where the judge indicated that he would have ordered an inquiry if he had found the prior bequest to be invalid, it would clearly have been a simple matter to ascertain the amount required for members to be paid one guinea to attend a realistic number of meetings. There was no comparison, submitted the Nephews, with the extent of the uncertainties and assumptions in the present case.
226. The Representor acknowledges that there are undoubtedly many difficult points which would need to be resolved on any inquiry and expressed some sympathy with the submissions made on behalf of the Nephews in this respect. However, the Representor suggested that the Court could proceed on the basis of certain reasonable assumptions as at 1979, namely that there would be five children of the Nephews, that each of them would have two children, or alternatively three; that, based on public data, the peak number of children in education at any one time would likely be three and the peak number of grandchildren in post-graduate education at any one time would be six if there were two grandchildren per child and eight if there were three grandchildren per child; and finally that each child or grandchild would most likely be in post-graduate education between (and including) the ages of 21 and 25.
227. On these assumptions, the Representor prepared a table calculating what the maximum demand might be on the fund in any one year and expressing this as a percentage of the annual income of £130,061 in the period immediately following the Testator's death. The table assumes a figure for fees and maintenance of an international student of £8,646 (being the average of the five universities) as compared with the figure of £10,715 taken by the Attorney General. The resulting percentage of the fund's income is said to be 40% in the case of six grandchildren and 53% in the case of eight grandchildren.
228. As an alternative methodology, the Respondent prepared a second table aimed at showing the capital amount necessary to set aside in order to meet the funding demands for the children and grandchildren based upon the same assumptions, namely five children with either ten or fifteen grandchildren. In both cases it is assumed that those eligible would require five years of post-graduate funding. The resulting capital sum is expressed as a percentage of the value of the fund in 1981 of £2,321,516 (which is not the same as the figure taken by the Attorney General as at 1979). The resulting percentages are 28% for ten grandchildren and 37% for fifteen grandchildren.
229. The Representor does not suggest that these figures are definitive, but submits that there is sufficient likelihood of being able to quantify the amount required for the invalid family trust to justify the Court ordering an inquiry in order to determine the exact amount.
230. I accept the submission of the Attorney General, the Nephews and the Representor that the validity of the charitable part of the Trust must be considered as at 1979, when the Will took effect upon the death of the Testator. If support is needed for this proposition, I would quote from the judgment of Arnold J in Re St Andrews (Cheam) Lawn Tennis Club Trust [2012] 1 WLR 3487 at [51] where he said:
231. It follows that I reject the submission on behalf of the Greek Government that the validity is to be determined either by reference to the circumstances today or upon the death of the last surviving Nephew. It so happens that the query over validity was identified following the obtaining of the Tidmarsh opinion in June 2021 in connection with the French taxation issue. However, the issue could have arisen at any time since the date of death. On Mr Alexander's submission, the decision as to validity might vary depending on when the issue arose and therefore how much certainty (or uncertainty) there was in connection with the beneficiaries of the invalid family trust at that time. If the issue of validity had been raised at an early stage, it would not be open to a Court simply to defer a decision until, for example, the death of the last surviving Nephew.
232. Any court is disposed to uphold a charitable trust to the extent that it properly can. However, I have reluctantly come to the conclusion that, judged as at 1979, it cannot be ascertained with any certainty what sum would be required for the invalid family trust and therefore what sum would be subject to the trust for young Greek men.
233. There are just too many uncertainties. For example:
(i) How long would the Nephews live?
(ii) How many children and grandchildren would there be?
(iii) How many of these would wish to pursue post-graduate education?
(iv) Of those who did, which of the eligible countries would they choose?
(v) Having chosen a country, which university would they choose?
(vi) Having chosen a university, which course would they undertake?
234. Depending on the answer to each of these questions, the amount required would vary considerably. Furthermore, apart from the above variations, there would be variation from year to year in the amount of income required. In some years there would almost certainly be no call on the income because there would be no children or grandchildren pursuing post-graduate education. Conversely, in other years there might be several post-graduate students.
235. Although they have each attempted to be extremely helpful, the difficulties are illustrated by the submissions of the Attorney General and the Representor. Apart from any differences as to the value of the residuary estate as at 1979 (which could easily be resolved), they have each made different assumptions and have reached widely varying possibilities as to the amount (expressed as a percentage of the net residuary estate) required for the family trust because of these different assumptions. I do not consider any of their approaches to be unreasonable and there is much to be said for all of them. But it highlights that it is really not possible to determine with any certainty what amount would be required. I accept the Nephews' submission at paragraph 225 above that, in cases where the court has found that the amount required for the invalid prior gift could be quantified, there has been no comparison with the extent of the uncertainties and necessary assumptions in the present case.
236. Altogether there is just too much uncertainty to be able to reach a satisfactory conclusion. Nor do I think that an inquiry could achieve a result. The difficulty in this case does not lie in the mathematical calculations; it lies in the assumptions which have to be made in order to decide what calculations are necessary. In my judgment, it is not for an inquiry to determine such assumptions, this is a matter for the Court. In any event an inquiry would be in no better position than the Court to determine what assumptions should be made.
237. In summary, with reluctance, I have concluded that the amount required for the invalid family trust cannot be sufficiently quantified. Accordingly, if I am wrong in my conclusion as to the existence and applicability of category (d), I would hold that the Trust as a whole is invalid and the entire fund passes upon intestacy.
238. I would summarise my key conclusions as follows:
(i) The Bequest constitutes a trust.
(ii) If not charitable, the Trust is invalid (a) for want of certainty of objects and (b) because it is of indefinite duration. If the family trust is considered on its own, it has sufficiently certain objects but is void as being a trust of indefinite duration because it is not limited to lives in being plus 21 years.
(iii) The Trust as a whole is not a valid charitable trust because of the inclusion of the family trust.
(iv) Category (d) of Coxen applies with the result that, in view of the invalidity of the family trust, on the death of the last surviving Nephew, all the assets of the residuary estate will be held on the charitable trust for young Greek men in accordance with clause 11(vi) of the Will, but without being subject to the proviso contained at clause 11(vii).
(v) If the conclusion at (iv) is wrong, it is not possible to quantify how much is required for the family trust and accordingly the Trust as a whole is invalid and the whole fund passes on intestacy.
