Scottish Court of Session Decisions

The leading petitioners in this case were the trustees of the late William Birkmyre, merchant, Port-Glasgow. The petitioners desired the authority of the Court to enter into a long lease with the Corporation of Port-Glasgow, by which certain subjects belonging to the trust were to be held by the Corporation for a period of 999 years for the purposes of the Corporation gas-works; the lease to be registered in terms of the Registration of Leases (Scotland) Act 1857 (20 and 21 Vict. cap. 26). The petition was presented under section 3 of the Trusts (Scotland) Act of 1867 (30 and 31 Vict. cap. 97), by which the Court are empowered to grant authority to the trustees to grant long leases “on being satisfied that the same is expedient for the execution of the trust, and not inconsistent with the intention thereof.”

The trust-deed directed that after the death of the truster's widow, who was to have a liferent of the subjects in question, the trustees were to enter upon the possession of the lands disponed, to realise the profits, and to divide and pay over the proceeds half-yearly among the truster's children as an alimentary fund. Upon the death of the last survivor of the children the trustees were directed “to sell and dispose of the whole lands and others above conveyed, and on realising the proceeds thereof, to divide the same, after deducting any expenses which may have been incurred in the management of the said trust, and in the sale of the said lands and others, equally among the lawful children then in life of” the truster's children. There was no power to grant long leases contained in the deed, nor any power of sale other than the above. The truster's widow was still alive, and she, along with all the other parties beneficially interested in the subjects so far as in existence, concurred in the petition; some of the grandchildren, however, were pupils or minors.

It appeared that the Corporation had already feued part of the adjacent ground for their gasworks; that they also possessed a part of the proposed subjects of the long lease under a lease for twenty-one years from 21st September 1863; and that they were prepared to give a rent of £110, with a duplicand every nineteenth year, instead of £78, 8s., which was the present rental of the entire subjects, including those already possessed by the Corporation.

The Lord Ordinary (Lee) found “that the proposed lease is inconsistent with the intention of the trusts referred to in the petition, and expressed in the trust-disposition and settlement;” and consequently refused the petition, adding this note—… . “It is always a delicate matter to authorise the anticipation of a period appointed for the sale of subjects in the neighbourhood of a place like Port-Glasgow; and the truster may have had very good reasons for providing, as he did, that the subjects should be retained during the lifetime of his children (subject to a power of granting leases for nineteen years), and should be sold on the death of the last survivor of them. The question is, Whether the granting at present of the proposed lease for 999 years would be consistent with the intention of the trust-deed, as regards the management and disposal of the property. And the Lord Ordinary feels bound to answer that question in the negative. The case seems to him to belong to the same class as that of Anderson, May 13, 1876, 3 R. 639.” … .

The petitioners reclaimed, and argued—The expediency of the proposed lease was clear, and the Lord Ordinary did not doubt it. His sole ground was that the lease was inconsistent with the purposes of the trust. But long leases were not prohibited, either expressly or by implication. It was not possible to extract a prohibition of a lease like that proposed, from the direction to sell at the expiry of the liferents. It was not a case in which the truster desired the subjects to be retained in forma specifics.

Authorities—Hay's Trustees, June 13, 1873, 11 M. 694; Anderson, May 13, 1876, 3 R. 639; Weir's Trustees, June 13, 1877, 4 R. 876; Downie, June 10, 1879, 6 R. 1013.