Analysis
By an Indenture dated 6 March 1925 (“Indenture”), Charles Harrison (“Settlor”) settled property on his only child, Jeannette Harrison (“Life Tenant”). By Clause 18(ii), the Life Tenant was given a testamentary power of appointment in the event of dying without issue in favour of nephews of nieces of the Settlor and/or their issue subject to a proviso that the Trust Fund or the shares thereof should be retained by the Trustees on such trusts and with and subject to such powers and provisions as would for the time being be applicable to a share appropriated by them to the object or objects in question under the trusts in default of appointment. Clause 20 declared the trusts in default of appointment to the effect that the shares so appropriated and the sub-shares thereof and the shares of such sub-shares and the income thereof should be held by the Trustees upon the same trusts and with and subject to the same powers and provisions as declared in Clauses 10 to 17 of and concerning the original shares, sub-shares and shares of sub-shares as if such clauses were thereby repeated but giving to the said nephews and nieces of the Settlor such interests and powers in and over their respective shares as thereby given to the children of the Life Tenant in and over their respective shares and to the children, grandchildren and issue of such nephews and nieces such interests and powers in and over their respective shares, sub-shares and shares of sub-shares as thereby given to the children, grandchildren and issue of the children of the Life Tenant in and over their respective shares, sub-shares or shares of sub-shares. In the event, the Life Tenant died without issue. Before her death, the Indenture was varied by a scheme approved by Mr Justice Vaisey on 9 December 1953 (“Scheme”) to the effect, inter alia, that the assets comprising what was defined as the “Appointed Fund” should be divided into twenty-five equal parts, five of which (the “Disputed Share”) were allocated to the Settlor’s great-nephew, David Harrison, as if the Life Tenant had by her will appointed that the Appointed Fund be held in trust subject to a proviso that the said share should not vest absolutely in the said appointees but he held by the Trustees upon the trusts and with and subject to the powers and provisions affecting the same under Clause 18 of the Indenture. David Harrison himself died without issue and the question arose as to whether the Disputed Share accrued to the share held in trust for his brother, who had died leaving two children, or to the shares of all the children of the Settlor’s brother. The Trustees now applied for directions to determine this question.
Held (directing an accruer to the share of David Harrison’s brother):
The approach to the construction of the Indenture as varied by the Scheme was the same as for bilateral instruments like contracts though, as this was the case of a unilateral instrument, there was no relevant factual matrix to consider. Clause 20 of the Indenture incorporated by reference provisions that related to the Life Tenant and her issue such that a “share” referred to the interest of a child of the Life Tenant, a “sub-share” referred to the interest of a grandchild of the Life Tenant and a “share of a sub-share” referred to a great-grandchild of the Life Tenant. Thus, the purpose of the referential provision was to transpose the concepts of “shares” and “sub-shares” and “shares of sub-shares” from the children, grandchildren etc of the Life Tenant to the children, grandchildren etc of the Settlor’s brother in default of issue by the Life Tenant. It followed, therefore, that the issue of the nephews and nieces of the Settlor would be treated for the purposes of the trusts imposed over their interests as if they were the issue of children of the Life Tenant and, so far as a child of a nephew and niece was concerned, the interest that such an object held was that of a “sub-share”. The Disputed Share was a “sub-share” and, following the death of David Harrison without issue, the relevant accruer was that contained in Clause 16(i) of the Indenture. This accrued to the “sub-share” of his brother and, following his decease, fell to be distributed to his children.
JUDGMENT INTRODUCTION [1] By an indenture dated 6 March 1925 (the ‘Indenture’), Charles Harrison settled certain property (the ‘Fund’) on his daughter, Jeannette Harrison, on the terms and trusts set out in the Indenture. In order to avoid having to set out large portions of the Indenture in this Judgment, a copy of the Indenture …Continue reading "Public Trustee v Harrison [2018] WTLR 299"