Scottish Court of Session Decisions

In February 1915 Mrs Johan Mills Balharrie or Livie, with consent of her husband David Brown Livie, boatbuilder, Dundee, and the said David Brown Livie, pursuers, brought an action against Thomas Milne and others, the trustees acting under the trust-disposition and settlement, dated 29th April 1881, and relative codicils of the late John Mills, manufacturer, Dundee, and relative deeds of assumption and conveyance, defenders, concluding, inter alia, for declarator “that the bequest or gift of the whole free residue of the trust estate, heritable and moveable, real and personal, of the said deceased John Mills, expressed and contained in his said trust-disposition and settlement, particularly the tenth article or purpose thereof, has failed and lapsed, and that the whole free residue of the said trust estate has fallen into intestacy.” The summons also contained conclusions for declarator that the pursuer was entitled to succeed to a portion of the residue, that the trustees were bound to denude themselves of the residue and pay over a portion to the pursuer, and for accounting and payment.

The late John Mills died on 16th March 1889. The female pursuer and Mrs Mary Stewart or Ness, wife of James Ness, Dundee, who along with her husband James Ness was during the course of the proceedings sisted as a pursuer, were nieces of the testator and claimed to be his next-of-kin and heirs in mobilibus.

The tenth article of the trust-disposition and settlement was as follows:—“With regard to the whole free residue of my trust estate, heritable and moveable, real and personal, it is my wish that it shall be devoted to the erection and maintenance in my

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native town of Dundee or suburbs thereof of a building of an ornamental description on a suitable site for the reception and use of a telescope or telescopes with all necessary appliances, appurtenances, and accomodation for astronomical observations as well as for viewing terrestrial objects, also a microscope or microscopes and any other scientific instruments the use of all which would afford to the community an opportunity of observing to an extent not generally within their reach the wonders and beauty of the works of God in creation and would in so doing yield them rational and innocent entertainment of the highest kind. For the accomplishment of these objects I hereby grant to my trustees full power to take all measures which to them may seem proper and expedient for the acquisition by purchase or otherwise of a permanent site suitable for the purposes before mentioned, and for otherwise carrying my said wish regarding the disposal of the residue of my trust estate into full effect. It is likewise my wish and intention that the foresaid building and other premises and the said instruments shall be under the charge of a proper keeper by whom they shall be shown to visitors on payment of a small fee to be fixed by my trustees or other trust managers of this bequest for the time being and that on such days (excepting Sundays) and at such hours and subject to such further regulations as my trustees or other trustees for the time being may think proper. Further although I desire that the said instruments shall be of the best description I at the same time recommend my trustees so to regulate their expenditure for providing accommodation therefor and for the oversight thereof as will if at all possible ensure that the annual proceeds of the remaining funds of this bequest shall with the fees of admission and any casual income from donations or otherwise suffice to defray the expense of superintendence of maintaining the premises and instruments in good order, providing a sinking fund for improving or replacing the same when this shall be considered requisite, and admit of the purchase of other instruments as before referred to without encroaching on the remaining capital of the trust. And if the assumption of ex officio trustees into the management shall be considered likely to give greater permanency to this special bequest I in addition to the general power of assumption of new trustees hereinbefore conferred upon my trustees do hereby authorise my trustees for the time being whenever they may think this proper and expedient to assume into the trust management of this special bequest persons holding public offices in Dundee and their successors ex officio and that either along with or in succession to the trustees on this bequest for the time being. I likewise provide and declare that if my trustees shall consider that the said free residue of my trust estate at the time when it shall become available will be insufficient for implementing my said wish regarding the application thereof I authorise them to hold and keep invested the whole or part of the said residue and accumlate the free income thereof with the capital for such length of time not exceeding in all twenty-one years after the date of my death as they shall consider will create an amount of funds sufficient for fulfilment of my said wish without contracting debt upon the special trust. Further without prejudice to the powers hereinbefore conferred upon my trustees in relation to the disposal of the said residue of my estate and without interfering with the exercise of their own judgment respecting the same I suggest that it might be advisable for them to make if possible an arrangement with the proper authorities or trustees of one of the most frequented of the public parks in Dundee in which a suitable permanent site for the building and other accommodation above mentioned might be obtained and in the event of such an arrangement being effected I hereby authorise my trustees to erect the said building and other necessary accommodation on such site to place and fit up in said building and premises the instruments with their appliances and appurtenance above mentioned and to commit the same and the future management of this special trust to the said public authorities or trustees of such park expressly for fulfilment of the said special trust in all time thereafter, as also to pay or transfer to such public authorities or trustees in trust as aforesaid the free balance of the special trust funds to be administered by them for the uses and purposes above specified in accordance with the powers and directions given by me to my said trustees.”

The parties averred, inter alia—“(Cond. 5) The trustees acting from time to time under the said settlement and codicils entered upon the management of the truster's estate and have realised the same. They have paid the truster's debts and funeral expenses, the annuities and legacies before mentioned, and have collected and accumulated the income of the estate. Notwithstanding that the period of twenty-one years, to which the defenders' power of accumulating income was limited, expired on or about 16th March 1910 they have since continued to accumulate the income and they stand possessed of the whole residue of the truster's estate.… (Cond. 6) The total amount of said residue and accumulations is now about 7000 or thereby. The defenders and their predecessors in office have from time to time since the death of the truster obtained expert advice from astronomers, architects, and others in regard to the practicability of carrying out the truster's intentions as expressed and contained in his said trust-disposition and settlement, particularly the tenth article or purpose thereof, and as to the sufficiency for that purpose of the funds constituting the residue of the truster's estate available therefor. The pursuers believe and aver that the defenders have all along been advised, and are well aware that it was impossible for them to execute the purpose of the bequest of said residue either as at 16th March 1910 or since. The pursuers believe and aver that the defenders have

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therefore from time to time been in communication with the Town Council of Dundee with a view to obtaining from said Town Council the free grant of a site for the observatory contemplated under said tenth article or purpose of the truster's settlement, and with a view to the Town Council or a committee thereof taking over from the defenders the management of the trust after the erection, completion, and equipment of the said observatory so as to relieve the defenders of the financial burden thereof, but the Town Council have not granted to the defenders any site or accepted any of the burdens which the future management of the trust by the Town Council would impose upon them. The defenders have no site for said observatory and no arrangements for the erection, equipment, and maintenance thereof. The truster's intentions and directions in that respect as expressed in the said tenth article or purpose of his settlement have not been carried out and the defenders are unable to carry them out.… ( Ans. 6) Admitted that the defenders and their predecessors in office have from time to time obtained expert advice and tentatively plans were prepared. … Admitted that with the view of leaving as large a sum as possible for the erection and equipment of the building contemplated by the truster the defenders entered into negotiations with the Town Council of Dundee with the object of obtaining a free grant of a site for the erection of the said building. Quoad ultra denied. Explained that the said negotiations are still going on.… Explained further that the funds in the hands of the defenders, which amount with accumulations of income to the sum of £6676, 4s. 7d. or thereby, exclusive of a claim against the female pursuer in respect of the expenses of the former action raised by her amounting to £35, 12s. 6d. or thereby, are sufficient for the purpose of carrying out the purposes of the truster, even on the assumption that the negotiations with the Town Council fail and that the defenders have to acquire a site on which to erect the said building, and the defenders propose and intend to execute the trust according to its terms. (Cond. 7) As at 16th March 1910, when said period of twenty-one years expired, it was owing to the inadequacy of the funds bequeathed for the purpose an impossibility for the defenders to acquire a site and erect, equip, and maintain said observatory in accordance with the truster's intentions and directions as expressed in his settlement. Since then the cost of a suitable site and of labour, materials, and upkeep has risen so greatly that notwithstanding said accumulations of income it is still impossible for the defenders to execute the purpose of the bequest. The cost of same would be £12,000 or thereby. ( Ans. 7) Denied.”

The pursuers pleaded, inter alia—“1. In respect the bequest of residue contained in the truster's settlement, particularly the tenth article or purpose thereof libelled on record, has failed through impossibility of performance as condescended upon, the pursuers are entitled to decree in terms of the first and one or other alternative of the second and third declaratory conclusions of the summons. … 4. Separatim. The continued accumulation of income since the expiry of twenty-one years from the testator's death being incompetent and illegal, and said accumulations not having been authorised or disposed of by his settlement, the income so accumulated falls into intestacy, and the pursuer's share thereof should be paid over to her as craved.”

The defenders pleaded, inter alia—“4. The pursuers' averments being irrelevant and insufficient to support the conclusions of the summons the action should be dismissed. 7. The free residue of the said trust estate not having fallen into intestacy the defenders ought to be assoilzied.”

On 20th July 1915 the Lord Ordinary ( Anderson) dismissed the action so far as at the instance of the original pursuers and continued the cause as insisted in at the instance of Mrs Ness in order that the defenders might have a further opportunity of carrying into effect the tenth purpose of the trust-disposition and settlement. The defenders having thereupon lodged a proposed scheme for proceeding with the work on the termination of the war, and the pursuers having lodged answers thereto, the Lord Ordinary on 4th November 1915 sisted the cause in hoc statu. The cause having thereafter fallen asleep, it was awakened and the sist recalled on 16th November 1920. The defenders again lodged a minute which stated the amount of the funds then in their hands, and a scheme, prepared with a view to the change in conditions since the case had been sisted, by Mr James Thomson, city engineer, Dundee, in accordance with which they proposed to carry out the testator's intentions, but with regard to which Mr Thomson suggested that in view of the high costs then prevailing further delay was advisable. The pursuers lodged answers contending that it was impossible for the defenders, with the funds stated, to carry the scheme into effect as proposed and submitting that, as the twenty-one years within which the purposes were to be given effect to had long since expired, the bequest should be declared to have lapsed. On 17th June 1922 the Lord Ordinary repelled the fourth plea-in-law for the pursuers and again sisted the cause in hoc statu to enable the defenders to proceed with the proposed scheme.

Opinion.—“I refer to my former opinions dated 20th July and 4th November 1915. The present situation is similar to that which existed in November 1915, except in these two circumstances, (1) that the defenders have now in hand a larger fund whereby to carry out the trust purposes, and (2) that in consequence a fresh scheme has been suggested by Mr Thomson, the city engineer of Dundee. I therefore propose to issue an interlocutor in terms similar to that of 4th November 1915, save as to the matter of expenses.

The duties of the defenders with reference to the trust purpose in question are (1) to acquire a site; (2) to erect thereon a building of an ‘ornamental description’—

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there being no other trust directions as to the size, style, or cost of the building; (3) to place in said building one or more telescopes and one or more microscopes, the number and cost of these instruments being left entirely to the defenders' discretion, and the terms of the trust deed indicating that the said instruments are not to be provided for purposes of scientific research but merely for the amusement and edification of the community; and (4) to make provision for the superintendence and maintenance of said building and instruments.

By the latest scheme suggested by the defenders it is proposed (1) to erect a building at a cost of £3250 (the sum suggested in 1915 being £5500); (2) to provide scientific instruments at a cost of £1500 (the sum suggested in 1915 being £500) and (3) to set aside for the expenses of superintendence and maintenance the sum of £3750 (the sum suggested in 1915 being £1000). The defenders have lodged a minute setting forth these new proposals. The pursuers have lodged answers to said minute in which the foresaid proposals are criticised and alleged to be impracticable.

The pursuers' counsel moved alternatively ( a) for decree de plano in terms of the first declaratory conclusion of the summons, or ( b) for an allowance of proof to enable her to establish by evidence that the defenders' scheme was impracticable.

I am not prepared to grant either motion.”

The plain answer to the pursuers' criticisms of the proposed scheme is that all details have been left by the truster to the unfettered descretion of the trustees. In the absence, therefore, of any averment or suggestion that the proposals of the defenders, or any of them, are extravagant or absurd, I can neither hold de plano that these proposals show that there is impossibility of performance, nor can I allow the pursuers to lead evidence in an attempt to establish this proposition. I am unable to figure any evidence which would induce a court of law to interfere with the site acquired by the defenders, or to decide that an ornamential building could not be erected for £3250, that £1500 was insufficient to purchase a telescope and a microscope, or that the revenue of £3750 was insufficient for the expenses of superintending and maintaining the proposed establishment.

I shall therefore sist the cause in hoc statu as I did on 4th November 1915, to enable the defenders to proceed with the proposed scheme.

The defenders, in my opinion, would be justified in delaying the execution of the scheme, as suggested by the engineer, for a reasonable time, to await the fall in cost which is anticipated,

One other point was debated and can be determined at this stage, that, namely, raised by the pursuers' fourth plea-in-law. The pursuers thereby claim a share of the income of the residue accumulated after 1910, the year when the provisions of the Thellusson Act made further accumulations illegal. This claim by the pursuers is, in my opinion, not well founded. The income of a fund affected by the terms of the Thellusson Act goes, after the expiry of twenty-one years, to ‘such person or persons as would have been entitled thereto if such accumulation had not been directed.’ In the present case, where the whole residue has been validly disposed of, the residuary legatees, that is, the defenders, as trustees, would have been entitled to the income of the residue if no accumulation had been directed. The defenders therefore, and not the pursuers, take the revenue which has been earned after 1910. (See Lindsay's Trustees, 1911 S.C. 584.)

I shall therefore repel the pursuers' fourth plea-in-law.”

The pursuers reclaimed, and argued—Sisting the cause was not the appropriate procedure. The time had passed for granting further delay. In the circumstances the pursuers were now entitled to decree. The residue accumulated at the end of the twenty-one years was insufficient then, and was so now, for carrying the bequest into effect. The bequest had therefore lapsed owing to impossibility of performance— Marquis of Bute's Trustees v. Marquis of Bute, 1904, 7 F. 49, 42 S.L.R. 66; Burgess's Trustees v. Crawford, 1912 SC 387, per Lord President at p. 394, 49 S.L.R. 294; In re Packe, [1918] 1 Ch. 437; Lindsay's Trustees, 1911 S.C. 584, 48 S.L.R. 470. In any event the next-of-kin were entitled to the accumulations since the expiry of the period of twenty-one years.

Argued for the defenders—There was nothing to prevent the defenders, who were the persons entitled to the residue, from accumulating beyond the period of twenty-one years— Ogilvie's Trustees v. Kirk-Session of Dundee, 1846, 8 D. 1229. All that had been done here was to save while steps were being taken to carry out the purpose. This was a lawful proceeding even where the Thellusson Act applied— Lindsay's Trustees ( cit.) The testator had never intended that his trustees should be limited to a period of twenty-one years after his death for carrying out his purpose, but had given them a very wide discretion. The time for testing the practicability of the bequest was the date when the twenty-one years expired, but the pursuers had no relevant averments regarding that time. It was not sufficient merely to say the bequest was then impracticable. Further, the intention of the testator was to make the trustees the judges of the nature of the building required.

On 20th July 1922 the Court recalled the interlocutor reclaimed against and allowed the defenders to lodge a minute setting out (1) the amount of money in their hands available for the tenth purpose of the settlement at 16th March 1910, and (2) how they could with these funds have given effect to the direction contained in the settlement, with all necessary details.

The opinion of the Court was delivered by