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27 February 2019

Court applies rule in Jones v Westcomb to gift on non-occurring contingency (Macintyre v Oliver)

This article was first published on Lexis®PSL Private Client analysis on 14 December 2018. Click for a free trial of Lexis®PSL.

Private Client analysis: The High Court decided that, applying the rule in Jones v Westcomb, a testatrix’s will, which provided that her residuary estate would go to her son and then, if he died childless, to her friend or, if the friend had predeceased the testatrix, to the friend’s daughter, meant that the residuary estate went to the friend’s daughter even though the son died without issue after the friend’s death and the friend had not predeceased the testatrix. The court also determined whether various charities were beneficiaries of the will of the testatrix’s husband (the testator).

Josh Lewison, barrister at Radcliffe Chambers, and Helen Fry, associate at BDB Pitmans, examine the court’s decision.

Macintyre and another v Oliver (as personal representative of the estate of Enid Simpson deceased) and others [2018] EWHC 3094 (Ch)

What are the practical implications of the judgment?

The important point in the judgment is that the court takes a lenient view of the effectiveness of gifts to charity and has a wide power of interpretation.

Each of the provisions of the testatrix and testator’s wills had some defect in the description of the recipient or in the defining words of the gift. However, the court was able to find that all of the gifts were valid.

It is also noteworthy that all of the problems—and therefore the litigation—could have been avoided if the draftsman had done some proper research into the identities of the recipients and had exercised more care in drafting the gifts and their purposes.

What was the background?

In her will, the testatrix had given a life interest in her residuary estate to her son. The remainder interest was left to his children. If he left no children, then the remainder interest was held for her friend, ‘but should she predecease me then on trust for [the friend’s daughter]’. The friend survived the testatrix but died before the latter’s son. The question was whether the gift to the friend took effect so as to pass to her daughter or whether it failed, so as to pass to the testatrix’s husband by intestacy.

The testator husband’s will had made three gifts of the residue of his estate. One-third was to go to a cottage hospital which no longer existed and another hospital. One-third was to go to a church. The final third was:

‘To be paid to the proper officer of St Bartholomew’s Hospital so that it can be used for the benefit of the Maternity Ward. First to continue the existing practice of distributing to each mother a verse card in memory of my late wife and secondly with any residue for the purchase of an item of general use in connection with the Children’s Unit such item to be purchased in memory of my late wife.’

The cottage hospital had long since ceased to exist, and although the relevant NHS trust had been contacted, it did not participate at all in the proceedings—the question for the court was whether that trust was the correct recipient.

The gift to the church was a misdescription which, in the event, was uncontroversial.

The more difficult gift was the gift to St Bartholomew’s because the hospital is not an entity in itself. The running of the hospital is a function of the fourth defendant, Barts Health NHS Trust. Furthermore, St Bartholomew’s no longer operates either a maternity ward or a children’s unit—it is now a specialist cancer and cardiac hospital. The court therefore had to determine who was the proper recipient of the husband’s gift, assuming it was valid, and then decide whether the closure of the maternity ward and children’s unit meant that the gift failed as it could no longer be carried out.

What did the court decide?

On the first question, the court decided that the testatrix’s gift was valid. The judge relied on the rule in Jones v Westcomb (1711) 24 ER 149 to the effect that where a testator provides for a gift to take effect on a specified event, the court can find that it takes effect on the happening of some other event instead if satisfied that that accords with the testator’s intentions. In Jones v Westcomb itself, the testator thought that his wife was pregnant. In his will, he left a life interest to his wife with remainder to the child, subject to the proviso that if the child died before reaching 21, one-third would go to the wife. The wife was not in fact pregnant and the court found that the testator must have intended that the wife should have the interest in those circumstances.

The court felt able to draw an inference from the slenderest evidence that the NHS trust responsible for operating the extant local hospital in the same area was the proper recipient of the gift to the cottage hospital, which no longer existed. That conclusion was based in part on the reasoning that applied to the gift to St Bartholomew’s.

On the questions affecting St Bartholomew’s, the court found that the relevant NHS trust was the proper recipient. A gift to an unincorporated association was a gift for its purposes. In the case of St Bartholomew’s, those purposes were discharged by the NHS trust. Turning to the gift, the court found that, on its true construction, it was an absolute gift for St Bartholomew’s. The words suggesting the purchase of verse cards and hospital equipment (‘so that it can be used for…’) were merely wishes and did not impose a trust. The judge also agreed with an alternative argument that the gift could be saved by the application of the rule in Lassence v Tierney [1843-60] All ER Rep 47. That rule is to the effect that where a gift is made with further conditions tacked onto it, but if the conditions fail, the gift survives as an outright gift. Here, the court was satisfied that if the provisions relating to the maternity ward and children’s unit failed, the gift took effect absolutely.

Josh Lewison and Helen Fry acted for the fourth defendant in this case, Barts Health NHS Trust.

Interviewed by Robert Matthews.

The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

 

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