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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> White (As Executor And Trustee of the Will of Joseph Robson Deceased) v Matthys & Ors [2014] EWHC 295 (Ch) (31 January 2014)
URL: http://www.bailii.org/ew/cases/EWHC/Ch/2014/295.html
Cite as: [2014] WLR(D) 54, [2014] 1 Ch 470, [2014] WTLR 725, [2014] 1 CH 470, [2014] Ch 470, [2014] 2 WLR 1435, [2014] EWHC 295 (Ch)
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CHANCERY DIVISION
IN THE ESTATE OF JOSEPH ROBSON DECEASED
B e f o r e :
(sitting as a Deputy Judge of the High Court)
____________________
| MARC WHITE (as executor and trustee of the will of JOSEPH ROBSON DECEASED) |
Claimant |
|
| -and- |
||
| (1) JENNIFER MATTHYS (as trustee of the JOSEPH ROBSON WILL SETTLEMENT) (2) CLIVE JEFFERSON (as trustee of the JOSEPH ROBSON WILL SETTLEMENT and as representative of the BRITISH NATIONAL PARTY) (3) PATRICK HARRINGTON (as trustee of the JOSEPH ROBSON WILL SETTLEMENT) (4) JEREMY ROBSON (5) SIMON ROBSON (6) THE JUDGE LEARNED HAND FOUNDATION FOR CIVIL AND RELIGIOUS LIBERTIES |
Defendants |
____________________
Clive Jefferson (in person)
Philip Capon (instructed by Brethertons LLP) for the Fourth and Fifth Defendants
Hearing date: 11 December 2013
____________________
Crown Copyright ©
- In this Part 8 Claim, the Claimant seeks directions pursuant to CPR r. 64.2(a) as to how the estate of Joseph Robson ("the Deceased") should be distributed. The claim raises issues as to the proper construction and effect of the Political Parties Elections and Referendums Act 2000 ("the 2000 Act"). Part IV of the 2000 Act makes provision for the prohibition of foreign donations to registered political parties. The issues in the present case are, in summary, whether there has been a breach of that prohibition on the facts of this case and, if so, what consequences should follow. The political party to which these proceedings relate is the British National Party ("BNP") which, it is common ground, was a registered party for the purposes of the 2000 Act.
- At the trial of the Claim which took place before me, no party sought to cross examine the makers of the various witness statements. The background facts as appears from those witness statements were therefore not in dispute.
- The Deceased was bom on 4th July 1928 in Ashington, Northumberland, England. He subsequently married and had two sons, the Fourth and Fifth Defendants. Their parents divorced in the 1970s. The Deceased bought 19 Willow Tree Crescent, Lutterworth, Leicestershire ("the Property") in about 1987 or 1988. In 1992, when he retired, the Deceased sold the Property and moved to Spain, living first at an address in Torrevieja and latterly in Orihuela, both situated near Alicante. The Fourth Defendant also moved to Spain between 2000 and 2003 when he ran an estate agency business with his father. After the Fourth Defendant returned to England in 2003, he was regularly in touch with his father and at one point in about 2008-9, discussed the possibility of his father moving back to England, but his father did not do so. So far as the Fourth and Fifth Defendants are aware, the Deceased did not own any property in England after he moved to Spain in 1992.
- The Deceased executed a will dated 30th March 1995 by which he left his Spanish estate to the Fourth Defendant. The value of this estate has turned out to be of the order of £1200.
- The Deceased also executed a will dated 29th November 2006 ("the 2006 Will") under which he appointed the Claimant to act as his executor and trustee and, by Clause 7, left his residuary estate outside Spain to the BNP.
- The Deceased died on 21st March 2010, aged 81. The Claimant took out a grant of probate on 8 November 2010. According to estate accounts dated 8 December 2011, the net estate was worth approximately £366,000, of which the main asset worth approximately £365,000 comprised various holdings with Close International Asset Management Fund Ltd, Jersey, and the only Spanish asset was a bank account worth £135. No distribution of the estate has yet been made by the Claimant.
- On 23 July 2010, the solicitors acting for the Fourth and Fifth Defendants wrote to the Claimant's then solicitors contending that the residuary gift in the 2006 Will in favour of the BNP failed because the Deceased was not registered on an electoral register in the 5 years before his death and hence was not a permissible donor for the purposes of the 2000 Act, and that the residuary gift accordingly passed on intestacy to them.
- On 12th September 2011 three bequest trustees of the BNP (namely Nicholas Griffin - the Chairman of the BNP, the Second Defendant - the Treasurer of the BNP, and Adam Walker - a member of the National Executive of the BNP), executed a Deed of Variation which sought to vary the 2006 Will by gifting the residuary estate under the 2006 Will to the Trustees of the Joseph Robson Will Settlement ("the Settlement"). The Trustees of the Settlement comprised Nicholas Griffin, the Second Defendant and the Third Defendant, who according to his witness statements has never been a member of the BNP but does work as a Local Assistant to Nicholas Griffin. It appears from the terms of the Settlement (which were attached to the Deed of Variation) that it was formed for the purpose of receiving the gift under the Deed of Variation. By a later Deed of Appointment dated 20 November 2012, Nicholas Griffin retired as a trustee and the First Defendant, his daughter, was appointed to act as a trustee in his place
- By Clause 1 of the Deed of Variation, it was provided that the three bequest trustees of the BNP "hereby vary clause 7 of the [2006 Will] so that the Deceased's Residuary Estate is instead gifted to and is held by the Trustees of [the Settlement] and on the terms of that Settlement which are set out in the Schedule to this Deed...". By Clause 2 the Trustees of the Settlement accepted the gift made by clause 1 and upon the terms there stated. By Clause 3, it was provided that, if the gift to the Settlement failed, the Residuary Estate was gifted to the Sixth Defendant, the Judge Learned Hand Foundation, a Northern Irish Charity. Clause 4 provided that if the gifts to the Settlement or the Sixth Defendant failed, the Deed would be void and of no effect ab initio.
- The Settlement, which was attached to the Deed of Variation, defines the "Trust Fund" as meaning the Residuary Estate of the Deceased under the 2006 Will, all accretions thereto, and monies investments and property paid or transferred to the Trustees of the Settlement and accepted by them as additions to the Trust Fund. The Settlement and the trusts created under it are described as "charitable". The objects of the trusts "so far and so far only as the same are legally charitable" are set in out in Clause 5 which is widely drafted.
- By a letter dated 18 October 2011, whose contents were adopted by the First to Third Defendants as part of their submissions, solicitors for the bequest trustees of the BNP responded to the question posed by the Claimant which was identified as being: "Can a political party legally enter into a variation of the will of the [Deceased] which is legally effective and binding on all?". At page 3 of that letter the solicitors for the BNP assert:
- The present proceedings were commenced by a claim form issued on 17th January 2013. By these proceedings, the Claimant seeks directions enabling him to make distributions of the Deceased's estate. The First to Third Defendants and the BNP say that the residuary estate should be distributed to them. The Fourth and Fifth Defendants say that the gift to the BNP fails and that the residuary estate passes as on an intestacy, ie to them.
- The claim came before Mr Justice Morgan at a directions hearing on 25th July 2013. The Claimant's application for a prospective costs order was granted at that hearing. Directions were also given for trial, including an order that notice of the claim should be served on the Sixth Defendant pursuant to CPR r.19.8A. The Second Defendant was also appointed to represent the BNP in this action pursuant to CPR r.19.6.
- Notice of the claim was served on the Sixth Defendant and Mr Kerr, its trustee, filed an Acknowledgement of Service indicating an intention to defend the claim and served a witness statement. In the event, the Sixth Defendant did not attend and was not represented at the hearing before me.
- At the hearing, the Claimant was represented by Mr Troup and the Fourth and Fifth Defendants were represented by Mr Capon. The First to Third Defendants were initially represented by Robert Grierson of Counsel but in the course of his submissions before me his instructions were withdrawn whereupon further submissions were addressed to me in person by Mr Harrington, the Third Defendant, including adopting Mr Grierson's skeleton arguments. Mr Harrington told me that he had the authority of the First Defendant to address me on her behalf. Mr Harrington's submissions were adopted in person by Mr Jefferson, the Second Defendant.
- The legislative history of the 2000 Act is helpfully set out in Lord Phillips' judgment in R (Electoral Commission) v. Westminster Magistrates Court [2011] 1 AC 496 ("the Westminster Magistrates Court case"), in particular at paragraphs 17-24. In summary, the origin of the 2000 Act was the Labour Party's 1997 election manifesto commitment to ban the foreign funding of political parties. That led to the 5th Report of the Committee on Standards in Public Life entitled "The Funding of Political Parties in the United Kingdom" published in October 1998 ("the Neill Report"). The Neill Report in turn led to a Government White Paper presented to Parliament in July 1999 ("the White Paper") to which was annexed a draft bill which formed the basis of the 2000 Act.
- I was shown extracts from the Neill Report and the White Paper. I need to treat the extracts to which I have been referred with caution since I note that the relevant provisions of the 2000 Act as enacted have changed from the equivalent provisions in the draft bill which was attached to the White Paper (which itself contained changes from the recommendations in the Neill Report). I therefore start by considering the relevant provisions as enacted in the 2000 Act (as amended), which are contained in Part IV (Control of Donations to Registered Parties and their members etc).
- For the purposes of Part IV of the 2002 Act, "donation'' in relation to a registered party is defined as meaning "any gift to the party of money or other property" (s 50(2)(a) (a number of other matters falling within the definition of donation are also listed, including the provision otherwise than on commercial terms of any property, services or facilities for the use or benefit of the party). The reference to "gift" includes "bequest" (s 50(8)); and "bequest" includes "any form of testamentary disposition" (s 160(1)). The reference to "property" includes "any description of property" (s 160(1)).
- The operative provisions relevant to the present case to which these definitions apply are contained in Chapter II of Part IV (Restrictions of Donations to Registered Parties) under the heading "Permissible donations". The provisions which are relevant to the present case are as follows.
- Section 54 (Permissible donors) contains the prohibition on foreign donations to political parties. It provides:
- Section 56 (Acceptance or return of donations: general) contains provisions which seek to give effect to, and enforce, the prohibition. It provides:
- Sections 58 60 contain provisions concerning the forfeiture of certain donations. Section 58 (Forfeiture of donations made by impermissible or unidentifiable donors) provides:
- Under the heading "Evasion of restrictions on donations", section 61 (Offences concerned with evasion of restrictions on donations) provides:
- Prospective amendments to ss.54 and 56 of the 2000 Act have been made by ss.9 and 10 of the Political Parties and Elections Act 2009, but not yet been brought into force.
- The first general issue which arises is whether in the circumstances described above there has been a breach of the prohibition contained in section 54 of the 2000 Act. For the purpose of determining that issue, it is necessary to answer the following questions:
- In order for the Deceased to qualify as a "permissible donor" for the purposes of Section 54, he must have been registered in an electoral register at any time within the period of 5 years ending with the date of his death ie between 21st March 2005 and 21st March 2010.
- The definition of "permissible donor" in section 54 of the 2002 Act as enacted represents a departure from the recommendations of the Neill Report. The latter had recommended that political parties should be able to accept donations both from those who were registered to vote and from those who were entitled to register to vote. The White Paper (at paras 4.5 - 4.6) explains that the Government had decided that entitlement to register would not qualify an individual as a permissible source. The reasons given are that checking whether a particular donor appears on the electoral register is both "conclusive and simple to administer", unlike the task of ascertaining whether a donor was entitled to vote, and the point is made that anyone who is entitled to vote could secure the necessary registration before the donation was made.
- It would seem that checking whether a donor appears on the electoral register is, at least in the case of a deceased donor, not as straightforward as is suggested in the White Paper. I was told that there is no centralised register. In about June 2011, solicitors for the Claimant instructed an entity called "Title Research" to carry out a search to ascertain whether or not the Deceased was registered in an electoral register. The results of that search show that the Deceased was registered in the electoral register until 1992 which recorded that he was residing at the Property. He was not found to have been listed on the electoral register after that date. Whilst the results of those searches show that the Deceased was not on the electoral register for the Property after that date, it would seem that searches of electoral registers can only be made for a known address and it is not possible to do a general search for a name at any address. Further searches undertaken by Title Research to ascertain an address (other than the Property) for a person with the same name as the Deceased and having his date of birth did not identify a different address, but these searches are inconclusive.
- The Fourth and Fifth Defendants, in support of their contention that the Deceased was not a permissible donor, rely also on the evidence of the Fourth Defendant that the Deceased sold the Property when he went to Spain in 1992, and as far as they are aware, thereafter owned no other property in the UK and did not return to live in the UK prior to his death.
- The First to Third Defendants accept that there is doubt whether the Deceased is a permissible donor. I was told that some checks had been carried out to ascertain whether he was on the electoral register but that these were not complete. In particular members of the Deceased's family other than the Fourth and Fifth Defendants had not been contacted to ascertain whether Mr Robson was registered on an electoral register for an address other than the Property. As far as enquiries by the BNP are concerned, it is said that the obligation under section 56(1) of the 2002 Act to investigate has not arisen because no donation has been "received" (a question I consider later) and that is why enquiries have not been completed. The BNP also assert that if the Deceased had not registered as an overseas voter he could have done so at any time until 2007 under section 1 of the Representation of the People Act 1985 (as amended) and reserve their position on bringing a negligence claim against the Claimant as the Deceased's solicitor by reason of his failure so to advise the Deceased.
- I am clearly satisfied, on a balance of probabilities, that the Deceased was not a permissible donor. Whilst I accept that the matters relied on by the Fourth and Fifth Defendants are not conclusive, they all point to this finding. The question of whether or not the Deceased was a permissible donor was raised at the outset of these proceedings (and indeed in correspondence before they were issued). Had the First to Third Defendants and the BNP been able to adduce evidence that the Deceased had been registered to vote I would have expected them to have done so not least because that would have been a complete answer in their favour to the matters raised in these proceedings. Their investigations to date have not revealed anything which might suggest that the Deceased was a permissible donor and there has been ample opportunity for them to investigate further and adduce evidence to such effect indeed much longer than the 30 day period for investigation stipulated in s 56 of the 1999 Act.
- Furthermore, and significantly, since the evidence is clear that the Deceased was not resident in the United Kingdom at any period after 1992, the effect of section 1 of the Representation of the People Act 1985 (as amended) is that he could only have been entitled to vote as an overseas voter by being registered on the electoral register for the address of the Property. The searches that have been carried out establish that he was not so registered. Since the Deceased owned no other property in the United Kingdom after 1992 and never came back to live there, the possibility that he was registered on the electoral register for a different address in the United Kingdom is, at best, highly unlikely.
- On the basis that the Deceased was not a permissible donor, the question then arises whether the prohibition in S 54 applies on the facts of the present case. The statutory prohibition is in terms that a "donation received by a registered party must not be accepted by the party if the person by whom the donation would be made is not, at the time of its receipt by the party, a permissible donor". As argued before me, this raises the following questions on the facts of the present case: (i) Was there a "donation" by the Deceased? (ii) Was it "received" and/or "accepted" by the BNP?
- Mr Grierson submitted that the 2000 Act should be construed narrowly. I accept that, because Chapter II of Part IV of the Act contains penal provisions, it falls to be construed strictly, in accordance with the principle against doubtful penalisation (see Bennion (5th Ed), Statutory Interpretation Pt XVII, section 271) and in particular that clear words are required before a person is to be penalised.
- On the facts, I find that there was a "donation" as defined in s 50 of the 2000 Act. The gift of the residuary estate in the 2006 will was a gift in the form of a bequest or other form of testamentary disposition. It was also a gift of "property" in the form of a chose in action, namely the right to have the estate duly administered (see Marshall v Kerr [1995] 1 AC 148 at 158 per Lord Templeman), and more specifically in the case of a residuary legatee "a composite right to have the estate properly administered and to have the residue if any paid to him as and when the administration is complete" (see Re Hemming Deceased [2008] EWHC 2731 (Ch) (at para.51). The two cases show that such a chose in action is transmissible. The chose in action was a valuable right in view of the realisations in the Deceased's estate. Given the broad definition for the purposes of section 50 ("any description of property"), such a chose in action constitutes "property".
- Mr Grierson relied on Marshall v Kerr to support an argument that the chose in action in question was not one that could be disposed of by the Deceased and therefore did not constitute "a gift of property". But, even assuming that the chose in action could not be disposed of by the Deceased, that does not lead to the conclusion sought to be drawn by Mr Grierson. The chose in action was still "property" the subject of the gift to the BNP under the 2006 Will.
- Mr Grierson also submitted that the 2002 Act should be construed narrowly and "should not be construed to prevent political parties from re-directing gifts from impermissible donors to third parties including in particular charities". Insofar as this submission is directed to chooses in action, in my view there can be no justification for generally excluding a chose in action in favour of a registered party from the definition of "property". To do so would involve a departure from the wide but clear definition of "property". Further, if Mr Grierson's submission were correct, a registered party could assign a chose in action (eg by indorsing a cheque) for value without contravening the prohibition contained in the 2000 Act, which would, at the least, be a surprising consequence and contrary to the purpose and terms of the 2000 Act, which I address further later in this judgment.
- The question then arises whether the gift of property under the 2006 Will - the chose in action as described above - was "received" or "accepted" for the purposes of section 54.
- Counsel for the Claimant and the Fourth and Fourth Defendant suggested that the terms of sections 54 and 56 of the 2000 Act appear more suited to gifts made by living donors, rather than by testamentary disposition in the sense that no special provision is made to address the inevitable circumstance of there being a delay between the giving of the gift on the death of the donor and the distribution of the estate. It is true that no such special provision is made and that this in particular gives rise to some difficulty in saying when the gift conferred by the will - the chose in action described above - is "received" by the beneficiary under the will. But the issue as to when a chose in action is "received" or "accepted" apply equally to a gift made by a living donor in the form of other chooses in action eg an assignment to a registered party of a debt which is still outstanding, or a cheque made out by the donor in favour of the party. The fact that chooses in action may be represented by a piece of paper (eg a cheque) may make notions of "receipt" and "acceptance" easier to ascertain on the facts. I return to this aspect below.
- Even in the case of tangible gifts, I can see that there may be difficulties in ascertaining when they have been "received" as opposed to "accepted". Examples are the provision of services and facilities (eg the provision of paid employees' time and free use of computer equipment and facilities) which can fall within the definition of "donation" for the purposes of section 50.
- These considerations, which may well arise in future cases, cause me to be cautious about elaborating unnecessarily on the notions of "receipt" and "acceptance" in sections 54 and 56.
- For the purposes of this case, I shall focus first on the notion of "acceptance". It seems clear that acceptance of donations by political parties from those who are not permissible sources is the primary mischief to which Chapter II of Part IV of the 2000 Act is directed. This is reflected in the following passages in the judgments of the Supreme Court in Westminster Magistrates Court:
- The focus of the First to Third Defendants' argument, as developed by Mr Grierson and adopted by Mr Harrington and Mr Jefferson, was that there had been no "receipt" of any gift by the Deceased at the time the Deed of Variation because the Claimant had not by then (or since) made any distribution. Without receipt, so Mr Grierson submitted, there cannot be "acceptance". He submitted that "the implied acceptance of the gift by the BNP by the Deed of Variation, without any receipt of the gift by the BNP, for the purpose of redirecting it to the [Settlement] is not prohibited."
- I agree with Mr Grierson to the extent that, by virtue of the wording of section 54, he submitted that there cannot be "acceptance" of a gift without "receipt". Nevertheless it seems to me clear that in the circumstances of this case, the gift by the Deceased of property in the sense described earlier in this judgment was "accepted" by the BNP for the purposes of section 54 when the Deed of Variation was executed. By entering into the Deed of Variation, the Bequest Trustees of the BNP were exercising their powers under Clause 8.15 of the BNP constitution to exercise the rights the BNP had as the beneficiary of the bequest under the 2006 Will. In transferring or assigning those rights to the trustees of the Settlement, the bequest trustees, on behalf of the BNP, unequivocally assumed ownership of the rights. Clause 1 of the Deed of Variation makes it clear that Clause 7 of the 2006 Will was varied by the bequest trustees so that the residuary estate which had been gifted under the will to the BNP was "instead gifted" to the trustees of the Settlement. It seems to me to be an inescapable conclusion that the BNP, through the bequest trustees, had accepted the gift and were passing it over.
- The question of when the BNP "received" the gift for the purposes of sections 54 and 56 is more problematic. Mr Capon submitted that this occurred on the death of the Deceased when the BNP's rights in respect of the Deceased's residuary estate took effect. I do not think that this can be right having regard to the scheme of Part II of Chapter IV of the 2000 Act. If the submission were correct, its effect would be to trigger the duty to investigate under s 56(1), and might give rise to an obligation to return the donation under s 56(2) or a deemed acceptance of the donation under s 56(5) and the commission of an offence under s 56(3) all at a time when the BNP might be unaware of the gift made under the will. Whatever the meaning of "received" it cannot bear the meaning primarily contended for by Mr Capon. In the alternative Mr Capon contended that the donation was received by the BNP on the grant of probate, which he says would have been communicated to the BNP (although there was no evidence to such effect).
- It is unnecessary for me on the facts of the present case to seek to embark on an analysis of what is meant by a donation being "received" under sections 54 and 56. It seems to me clear that there cannot be an acceptance of a donation unless it has been received. The terms of those sections presuppose that there has been a receipt before acceptance. As I have mentioned earlier, it may be difficult to ascertain when a particular form of donation (eg the provision of services or facilities) is "received" as opposed to "accepted". Similar difficulties may arise in relation to chooses in action. But I do consider it clear that when a donation has been accepted by a positive act assuming ownership, as in the present case, it must have been received at the latest by the time of acceptance. For the purposes of the present case, it is sufficient for me to dispose of the issues on the footing that the gift under the 2006 Will was received by the BNP at the time it was accepted by the execution of the Deed of Variation, and I so find. Whether or not the gift had been "received" by the BNP at an earlier date (and the consequent ramifications of the provisions in section 56) is not an issue I need to decide.
- It follows that I find that the gift to the BNP under the 2006 Will was a donation which was received and accepted by the BNP by entering into the Deed of Variation in contravention of the prohibition set out in s 54(1)(a).
- The First to Third Defendants and the BNP submitted that, if I were to find that there had been a breach of the prohibition, I should nevertheless direct the Claimant to distribute the estate to the First to Third Defendants, with whatever consequences that might follow. In particular it was submitted that it should be left to the Electoral Commission to decide whether or not to bring proceedings for forfeiture under section 58 and that it would be unfair if I were to direct a distribution to the Fourth and Fifth Defendant thereby depriving the BNP of a possible defence to an application against the BNP for forfeiture under section 58, in the form of an invitation to the magistrate's court to exercise the discretion to order forfeiture of a lesser sum, in accordance with the decision of the Supreme Court in Westminster Magistrates Court. It was pointed out that if an application under section 58 was successful, the amounts forfeited would go to the Crown and that was an additional reason why the Fourth and Fifth Defendants should not receive a distribution.
- The Westminster Magistrates Court case concerned the Magistrates Court's discretionary power under s.58 of the Act to order forfeiture of a sum equal to a donation accepted from an impermissible donor. The key issue was whether the Magistrates Court had power to order forfeiture of a sum less than the value of the donation. The Supreme Court held by a 4:3 majority (Lord Rodger, Lord Walker and Lord Brown dissenting) that the Court did have such a power. The judgments of the majority did nevertheless suggest that that the discretion to order forfeiture of a lesser sum only arose in certain circumstances (see in particular Lord Phillips at paras 47 - 49; Lord Kerr para 118) and it may be that the enthusiasm with which Mr Harrington embraced this decision is not justified, but I proceed on the basis that it would be open to the BNP to argue for forfeiture of a lesser sum than the value of the donation.
- I consider that that the consequences of a breach of the prohibition are not confined to the possibility of an application for forfeiture under section 58.
- The circumstances of this case are unusual in that, by reason of the inevitable delay caused by the administration of the Deceased's estate, nothing has yet been paid out. That will not normally be the case where there has been a donation.
- I consider that the key to answering the issue as to the consequences of a breach of the prohibition in this case lies in the submission made by Mr Capon to the effect that by the Deed of Variation, the First to Third Defendants as trustees of the Settlement had assigned to them such rights as the BNP had under Clause 7 of the 2006 Will. The First to Third Defendants acquired no better rights than the BNP had. I accept that submission.
- As explained earlier in this judgement, the rights which the BNP had, and which they assigned to the First to Third Defendants, was the right to have the Deceased's estate duly administered. On the footing that Deceased was an impermissible donor, was that an enforceable right in the circumstances of this case? I find that the BNP could not have enforced that right. Enforcement of the right would involve giving effect to a donation made in breach of the prohibition in s 54.
- This conclusion is fortified by the provisions of section 61 of the 2000 Act, which create an offence where a person "... .knowingly does any act in furtherance of an arrangement which facilitates or is likely to facilitate... the making of donations to a registered party by any person or body other than a permissible donor." When considering the rights which the BNP had immediately before the assignment, could it have required the Claimant to give effect to Clause 7 of the 2006 Will without contravening this provision? Since the Deceased was not a permissible donor (and assuming that this was known to the Claimant), the answer would have been no. The Claimant would similarly have been at risk in those circumstances if he had voluntarily sought to give effect to Clause 7 of the Will. The BNP's rights today (which have been assigned to the First to Third Defendants) are no different - but in the light of my earlier findings the parties are now to be taken as knowing that the Deceased was not a permissible donor.
- Accordingly, I find that it would be wrong for me to direct the Claimant to make a distribution of the Deceased's residuary estate to the First to Third Defendants. Other than the argument based on section 58, no relevant argument was addressed to me by the First to Third Defendants or the BNP why, if I were to decline to make such I direction, I should do anything other than direct the Claimant to distribute the residuary estate to the Fourth and Fifth Defendants as the beneficiaries of the Deceased's estate on intestacy. Accordingly, I make that direction in favour of the Fourth and Fifth Defendants.
Richard Sheldon QC:
Introduction
Background
"The constitution of the [BNP] provides the Bequest Trustees are empowered to give a valid receipt for any gift. See Clause 8.12The constitution of the [BNP] provides that the Bequest Trustees are empowered to deal with any rights, powers, privileges or interests of the [BNP] may have as beneficiary arising out of a will. See Clause 8.15 Accordingly at common law in respect of the [Deceased] and the [BNP] there is a valid assignment of a chose in action by Bequest Trustees."
The letter goes on to contend that Deed of Variation did not contravene the provisions of the 2000 Act. I will need to deal with the legal argument by reference to the 2000 Act in that letter when I come to consider the rival submissions.
The proceedings
The 2000 Act
54. - (1) A donation received by a registered party must not be accepted by the party if-(a) the person by whom the donation would be made is not, at the time of its receipt by the party, a permissible donor; ...(2) For the purposes of this Part the following are permissible donors-
(a) an individual registered in an electoral register;...(4) In relation to a donation in the form of a bequest subsection (2)(a) shall be read as referring to an individual who was, at any time within the period of five years ending with the date of his death, registered in an electoral register
(8) In this section "electoral register" means any of the following-
(a) a register of parliamentary or local government electors maintained under section 9 of the Representation of the People Act 1983;..
56. - (1) Where(a) a donation is received by a registered party, and(b) it is not immediately decided that the party should (for whatever reason) refuse the donation,all reasonable steps must be taken forthwith by or on behalf of the party to verify (or, so far as any of the following is not apparent, ascertain) the identity of the donor, whether he is a permissible donor, and (if that appears to be the case) all such details in respect of him as are required by virtue of paragraph 2 or 2A of Schedule 6 to be given in respect of the donor of a recordable donation.
[Schedule 6 paragraph 2 identifies the details to be given in donation reports: in the case of a donation in the form of a bequest, such details include the full name of the person who made the bequest, his address at the time of his death, or if he was not then registered in an electoral register at that address, the last address at which he was so registered during the period of five years ending with the date of his death.]
(2) If a registered party receives a donation which it is prohibited from accepting by virtue of section 54(1), or which it is decided that the party should for any other reason refuse, then-
(a) ....the donation, or a payment of an equivalent amount, must be sent back to the person who made the donation or any person appearing to be acting on his behalf,...within the period of 30 days beginning with the date when the donation is received by the party.
(3) Where-
(a) subsection (2)(a) applies in relation to a donation, and(b) the donation is not dealt with in accordance with that provision,the party and the treasurer of the party are each guilty of an offence.
(3A) Where a party or its treasurer is charged with an offence under subsection (3), it shall be a defence to prove that -
(a) all reasonable steps were taken by or in behalf of the party to verify (or ascertain) whether the donor was a permissible donor, and(b) as a result, the treasurer believed the donor to be a permissible donor....(5) For the purposes of this Part a donation received by a registered party shall be taken to have been accepted by the party unless-
(a) the steps mentioned in paragraph (a) .... of subsection (2) are taken in relation to the donation within the period of 30 days mentioned in that subsection; and(b) a record can be produced of the receipt of the donation and-(i) of the return of the donation, or the equivalent amount, as mentioned in subsection (2)(a)....(6) Where a donation is received by a registered party in the form of an amount paid into any account held by the party with a financial institution, it shall be taken for the purposes of this Part to have been received by the party at the time when the party is notified in the usual way of the payment into the account.
58. - (1) This section applies to any donation received by a registered party(a) which, by virtue of section 54(l)(a) or (b), the party are prohibited from accepting, but(b) which has been accepted by the party.(2) The court [ie in relation to England and Wales, a magistrates court] may, on an application made by the Commission, order the forfeiture by the party of an amount equal to the value of the donation.(3) The standard of proof in proceedings on an application under this section shall be that applicable to civil proceedings.
61. - (1) A person commits an offence if he-(a) knowingly enters into, or(b) knowingly does any act in furtherance of,any arrangement which facilitates or is likely to facilitate, whether by means of any concealment or disguise or otherwise, the making of donations to a registered party by any person or body other than a permissible donor.
Has there been a donation by a foreign donor in breach of the prohibition in section 54?
(a) Was the Deceased a "permissible donor"?(b) Has a donation been "received" and "accepted" by the BNP contrary' to Section 54?
Was the Deceased a "permissible donor"?
Has a donation been "received" and "accepted" by the BNP contrary to Section 54?
"The primary object is to prevent donations to political parties from foreign sources."
(Lord Phillips at para 25)"Nothing could be clearer than the language used by Parliament and nothing could be clearer that the intention behind the language: political parties were not to accept donations from any individual who was not registered in an electoral register." (Lord Rodger at para. 5 8)
"The underlying aim of the legislation remained to eliminate inappropriate "foreign" donations." (Lord Mance at para 103)
"The central purpose of the legislation was to prohibit donations from those who did not have a stake in this country." (Lord Kerr at para 111)
What are the consequences of the breach of the prohibition on the facts of the present case?