Scottish Court of Session Decisions

Earl of Balfour, Viscount Traprain of Whittingehame for Declarator of Fee Simple Proprietorship [2002] ScotCS 103 (11th April, 2002)

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
Lord Cameron of Lochbroom Lord Macfadyen Lord Sutherland	P550/01 OPINION OF THE COURT delivered by LORD CAMERON OF LOCHBROOM in PETITION of THE RIGHT HONOURABLE GERALD ARTHUR JAMES, EARL OF BALFOUR, VISCOUNT TRAPRAIN OF WHITTINGEHAME Petitioner for Declarator of Fee Simple Proprietorship _______

 

Act: McNeill, Q.C.; Turcan Connell, W.S.

Alt: Agnew of Lochnaw, Q.C. (for 2^nd to 5^th Respondents) (Trustees); Anderson Strathern, W.S.

Alt: Moynihan, Q.C. (for 6^th Respondent) (Roderick Balfour); Brodies, W.S.

11 April 2002

1. This petition is brought under and in terms of section 48, alternatively section 47, of the Entail Amendment (Scotland) Act 1848, the Rutherfurd Act, at the instance of the fourth Earl of Balfour ("Lord Balfour"). The petitioner invites the court, in brief, to declare that he is entitled to be the fee simple proprietor of the lands and the barony of Whittingehame and others, being the whole subjects described in the notice of title in favour of the trustees acting under the trust disposition and settlement and two relative codicils of the Right Honourable Arthur James, the first Earl of Balfour, ("the truster") registered in the Books of Council and Session on 24 March 1930 and recorded in the Register of Sasines for the County of East Lothian on 29 October 1931 under exception of all subjects subsequently disponed by the trustees.
2. Answers to the petition have been lodged by the present trustees acting under the trust disposition and settlement and also by Roderick Francis Arthur Balfour ("Mr. Balfour"). In addition the court has been assisted by the report of Mr. Howie, Q.C., prepared in obedience to this court's interlocutor of 28 September 2001.
3. The truster died on 19 March 1930 leaving a trust disposition and settlement dated 1 January 1923 and relative codicils dated 20 December 1927 and 20 September 1929.
4. By the seventh purpose of his trust disposition and settlement the truster made provision for the rest and residue of his estate including the estate of Whittingehame and others to be held by his trustees and directed them to pay or apply the whole net revenue or income thereof "for behoof of the following series of heirs in their order successively each for his or her liferent use allenarly, videlicet:- My brother, the said Gerald William Balfour in liferent, whom failing the heir male of the body of the said Gerald William Balfour in liferent, whom failing, the heir male of the body of my brother Eustace James Anthony Balfour (now deceased), in liferent, whom failing the heir female of the bodies of each of my said brothers Gerald and Eustace in the order of their seniority, in liferent, excluding heirs portioners...". The truster then made further provision for the destination in liferent which it is unnecessary, for present purposes, to rehearse.
5. By his codicil dated 20 December 1927 the truster varied the seventh purpose in the following manner:

"I hereby cancel the nomination of my said brother Gerald as the first liferenter or heir ceded to the succession of the rest and residue of my whole means and estate as provided for "In the Seventh Place" in said Trust Disposition and Settlement, and I now instruct that in his place the heir male of his body shall be the person first entitled to succeed thereunder, and I wish to say that I have made this alteration to save my heirs as much estate duty as possible: and in all other respects I confirm the foregoing Trust Disposition and Settlement."

The codicil dated 20 September 1929 was concerned only with the appointment of a named individual to be one of the truster's literary executors. Parties before us were agreed that the appointment was to be regarded as an administrative direction which did not affect the prior deeds as the expression of the truster's testamentary intention with regard to the settlement of his estate mortis causa. We agree that this is correct having particular regard to what was said in Miller's Trs. v. Miller 1958 SC 125. Nothing in the codicil dated 20 September 1929 innovated upon the testamentary provisions in the two prior deeds in any way.

6. In terms of the directions set out in the two prior deeds, the trust disposition and settlement and the codicil dated 20 December 1927, the truster's residuary estate has since his death on 19 March 1930 been held for the following persons, firstly, for the third Earl of Balfour, the nephew of the truster and son of the second Earl ("Gerald"), who died on 27 December 1968 and, secondly, for Lord Balfour, son of the third Earl. It is to be noted that Gerald survived the truster and succeeded as the second Earl. While there was initially some doubt about the matter, it was common ground before us that Lord Balfour is in possession of the liferented estate as heir male of the body of Gerald and not, as appeared to be suggested at one time, as heir female of the body of Gerald.
7. Lord Balfour is of full age. He was born on 23 December 1925. He has no issue. There is doubt as to the person next entitled after Lord Balfour to receive and enjoy during life the annual income and produce of the residuary heritable estate presently held by the trustees. In the petition it is averred that the balance of opinion points to Mr. Balfour who is descended from the truster's youngest brother, Eustace James Anthony Balfour. Mr. Balfour has appeared in the process to oppose the prayer of the petition. The trustees have maintained a neutral position.
8. The issue between the parties concerns the meaning and effect, in the circumstances, of sections 47 and 48 of the Rutherfurd Act. These sections provide as follows:

"47. Where any land or estate in Scotland shall, by virtue of any trust disposition or settlement or other deed of trust whatsoever, dated on or after the first day of August one thousand eight hundred and forty-eight, be in the lawful possession, either directly or through any trustees for his behoof, of a party of full age born after the date of such trust disposition or settlement or other deed of trust, such party shall not be in any way affected by any prohibitions, conditions, restrictions, or limitations which may be contained in such trust disposition or settlement or other deed of trust, or by which the same or the interest of such party therein may bear to be qualified, such prohibitions, conditions restrictions, or limitations being of the nature of prohibitions, conditions, restrictions, or limitations of entail, or intended to regulate the succession of such party, or to limit, restrict, or abridge his possession or enjoyment of such land or estate in favour of any future heir; and such party shall be deemed and taken to be the fee simple proprietor of such land or estate, and it shall be lawful to such party to make application by way of summary petition to the Court of Session, setting forth the facts, and referring to this Act, and craving the court to pronounce an act and decree declaring him fee simple proprietor of such land or estate, and unaffected by any such conditions, provisions, restrictions, or limitations; and the court shall proceed in such petition as may be just, and shall have power to pronounce an act and decree declaring such party to be fee simple proprietor of such land or estate, and unaffected as aforesaid; and such act and decree may be recorded in the register of sasines, and being so recorded shall have all the operation and effect of the most formal and valid disposition to such party, and his heirs and assignees whomsoever, of such lands or estate, with infeftment thereon in favour of such party duly recorded: Provided always, that the rights of the superior of such lands or estate, and of all parties holding securities thereon, and all rights which are held independently of such trust disposition or settlement or other deed of trust, shall be as they are hereby reserved entire.

48. It shall be competent to grant an estate in Scotland limited to a liferent interest in favour only of a party in life at the date of such grant; and where any land or estate in Scotland shall, by virtue of any deed dated on or after the said first day of August one thousand eight hundred and forty-eight, be held in liferent by a party of full age born after the date of such deed, such party shall not be in any way affected by any prohibitions, conditions, restrictions, or limitations which may be contained in such deed, or by which the same or the interest of such party therein may bear to be qualified; and such party shall be deemed and taken to be the fee simple proprietor of such estate, and it shall be lawful to such party to obtain and record an act and decree of the Court of Session, in the like form and manner, and in the like terms, and with the like operation and effect, as is herein-before provided with reference to an act and decree of the said court in the case of deeds of trust: Provided always, that the rights of the superior of such lands or estate, and of all parties holding securities thereon, and all rights which shall be held independently of the deed by which such liferent is constituted, shall be as they are hereby reserved entire."

In particular, the issue concerns the meaning to be given to the phrase "the date of such trust disposition or settlement or other deed of trust" in the context of the present case, where Lord Balfour was born after the date of the trust disposition and settlement but before the date of the first codicil.

9. We record that all parties before us were agreed that the date of the deed for the purposes of sections 47 and 48 of the Rutherfurd Act was the date of execution of "the deed" and not the date of death of the truster in accordance with the decision in Lord Binning, Petitioner 1984 SLT 18. Accordingly parties were also agreed that there was, so far as this case was concerned, no difference in the result according to whether the present fell within the ambit of section 47 or that of section 48.
10. Likewise it was agreed between parties that in the normal case a will and a codicil are to be read, so far as possible, as forming one deed (see Candlish Henderson on Vesting pp. 17-18). Thus, where the expression of the testator's will is contained in several distinct writings, the whole must be read as one settlement. Accordingly, the heir cannot repudiate one of them or reduce it on the head of deathbed, without forfeiting the provisions in his favour contained in the other (see M'Laren on Wills and Succession para. 469: Black v. Watson (1841) 3 D 522).
11. For the petitioner, it was contended that since Lord Balfour was born after the date when the trust disposition and settlement was executed, he fell into the category of "a party of full age born after the date" of the deed "by virtue of " which he was in the lawful possession of the estate of Whittinghame. The entail had been established by the seventh purpose of that deed. It had set up a family scheme whereby with the nomination of Gerald a succession had been provided by reference to classes of persons identified by heirship derived from Gerald and other specified individuals who were related to the truster. The effect of the codicil had not displaced that scheme. All that it had done was to remove the personal nomination of Gerald while leaving the class of heirs of his body in place and making no change otherwise to the order of succession. This had been done in order to reduce estate duty liability. Thus the codicil did not lead to any substantive change in the trust settlement achieved by the seventh purpose. Lord Balfour had been placed in possession of the estate by the trustees as heir male of the body of Gerald in accordance with the succession set out in the deed dated 1 January 1923. That deed was the final expression of the truster's testamentary will so far as the estate given into the trustees' hands by the seventh purpose of that deed. Therefore the date of its execution was the date of the relevant deed for the purposes of both section 47 and section 48 of the Rutherfurd Act.
12. For Mr. Balfour, it was contended that on any view the final expression of the truster's testamentary intentions was to be found in the trust deed and settlement and the codicil dated 20 December 1927 taken together. The codicil had made a substantive alteration to the seventh purpose of the trust deed and settlement. The motive which gave rise to its execution was irrelevant. What had to be considered were the terms in which the truster had expressed himself. It was clear that he was issuing a new instruction to his trustees as to the person for whose behoof the trustees were to hold the residuary estate and who was to be first entitled to succeed to it under that purpose. The truster recognised that this was an "alteration" to the directions for succession contained in the seventh purpose of the trust disposition and settlement, while confirming that the remainder of the succession remained unaltered. This was not a case in which it could be maintained that the directions regarding the disposal of the residuary estate in the trust disposition and settlement had not been revoked or varied by any provisions contained in subsequent codicils. Reference was made to Miller's Trs and to the discussion in the report of Mr. Howie, Q.C., of the circumstances in the case of The Earl of Moray, Petitioner 1950 SC 281. In terms of the Rutherfurd Act Lord Balfour was in the lawful possession of the estate of Whittingehame and held that estate by virtue of the trust disposition and settlement as altered by the codicil dated 20 December 1927. The effect of the codicil upon the truster's settlement was wholly different from the exercise of a power of appointment by one to whom that power was delegated by a prior testamentary disposition. Reference was made to Muir's Trustees v. Williams 1943 SC (HL) 47 and Malcolm's Trs. v. Malcolm 1948 SC 616 :1950 SC (HL) 17. The date of the trust deed for the purposes of the Rutherfurd Act was 20 December 1927. Accordingly the petition fell to be dismissed.
13. In our opinion, the submissions for Mr. Balfour are well founded. The matter can be tested thus. Upon the death of the truster his trustees held the whole trust estate in terms of the trust disposition and settlement and the two relative codicils. In dealing with the residuary estate held by them in terms of the seventh purpose, the trustees were directed to hold it for behoof of the heir-male of Gerald, and not Gerald, by virtue of the trust disposition and settlement taken together with and as altered by the provision in the codicil of 20 December 1927 which appointed the heir-male of Gerald as the first person entitled to succeed to the liferent of the residuary estate. That is to say, the trust settlement by virtue of which the first liferenter came into possession of and thereafter held the liferented estate, was composed of the two deeds taken together. The date of the deed forming the trust settlement must be taken as the date when the later of the deeds was executed, namely 20 December 1927. That deed remained the trust settlement containing the directions to the trustees in determining the further destination of the residuary estate arising on the death of the first liferenter. Accordingly, since Lord Balfour was born before the date of the deed, he is not entitled to take advantage of the provisions of either section 47 or section 48 of the Rutherfurd Act.
14. For the foregoing reasons, we shall refuse the prayer of the petition.