United Kingdom House of Lords Decisions

Parliamentary Archives,
HL/PO/JU/4/3/1055










HOUSE OF LORDS

GREY and another

v.
COMMISSIONERS OF INLAND REVENUE

2nd November, 1959

Viscount Simonds

Lord Reid

Lord Radcliffe

Lord Cohen

Lord Keith of Avonholm




Viscount Simonds

my lords.

This appeal raises a question upon which there has been a difference of
opinion in the Courts below. It is whether certain instruments which were
presented for adjudication to stamp duty under section 13 of the Stamp Act,
1891, are or are not chargeable with ad valorem duty. The Court of Appeal
(Morris and Ormerod, L.J.J., Lord Evershed, M.R. dissenting) held that they
are so chargeable. Upjohn, J. had decided to the contrary.

The facts as stated in the Case Stated by the Commissioners of Inland
Revenue may be summarised as follows: —

1. The Appellants are trustees of six settlements each of which was
   made between a Mr. Hunter as settlor of the one part and the Appellants
   as trustees of the other part. Four of these settlements were respectively
   dated the 22nd July, 1949, and a fifth was dated the 9th August, 1949,
   and each settlement directed the Appellants to stand possessed of the
   property comprised therein upon the trusts thereby declared for the
   benefit of a named grandchild of Mr. Hunter and such other trusts as
   therein appearing. All the said five settlements are in similar form. The
   sixth settlement was dated the 1st May, 1950, and the Appellants were
   thereby directed to stand possessed of the property comprised therein
   upon the 'trusts thereby declared for the benefit of 'the then existing and
   future grandchildren therein specified of Mr. Hunter.

2. By an instrument of transfer dated the 1st February, 1955, Mr.
   Hunter transferred to the Appellants 18,000 ordinary shares of £1 each
   in Sun Engraving Company Limited (hereinafter called " the Company ")
   to be held by the Appellants as nominees for and to the order of Mr.
   Hunter.

3. At a meeting held on the 18th February, 1955, at the offices of the
   Company at which there were present Mr. Hunter and the Appellants
   and Mr. Graham Wyatt Williams, solicitor, Mr. Hunter orally and
   irrevocably directed the Appellants to divide the said 18,000 shares in
   the Company into six equal parcels of 3,000 shares each and to hold
   one of such parcels upon the trusts and with and subject to the powers
   and provisions respectively declared and contained in each of the said
   six settlements to the intent that such directions should result in the
   entire exclusion of Mr. Hunter from all further right, title and benefit
   to or in the said shares or any of them and the income thereof.

4. By six deeds of declaration of trust each dated the 25th March,
   1955, and executed by the Appellants and Mr. Hunter after reciting
   in each such deed that the Appellants were the holders of 3,000 ordinary
   shares in the Company and that on the 18th February, 1955,
   Mr. Hunter orally and irrevocably directed the Appellants to hold the
   said shares upon the trusts and subject to the powers and provisions
   in such one of the said settlements as was therein mentioned and that the
   Appellants had thereupon assented to and accepted the trusts reposed
   in them by the said direction and that the giving of the said direction
   on the said 18th February, 1955, and in manner aforesaid and the nature
   thereof were testified by the execution by Mr. Hunter of that deed it
   was witnessed and the Appellants thereby acknowledged and declared
   (in each of the said deeds) that they had been since 18th February, 1955,
   and were then holding 3,000 shares therein mentioned and the income
   thereof upon such trusts and with and subject to such powers and
   provisions as were in the relevant settlement declared and contained
   
   

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concerning the Trust Fund as therein defined to the intent that the
said shares should since the said 18th February, 1955, form an addition
to and be one fund with the said Trust Fund for all purposes.

These facts give rise to the plain question whether the oral directions
given by Mr. Hunter, which are recited in each of the instruments, were
effective or were, having regard to section 53 (1) (c) of the Law of Property
Act, 1925, wholly ineffective. In the former event the instruments would
not, and in the latter would, be chargeable with ad valorem duty.

Section 53 (1) (c) of the Act is as follows: —

" Subject to the provisions hereinafter contained with respect to the
" creation of interests in land by parol— .... (c) a disposition of an
" equitable interest or trust subsisting at the time of the disposition,
" must be in writing signed by the person disposing of the same, or toy
" his agent thereunto lawfully authorised in writing or by will."

Briefly, then, were the several oral directions given by Mr. Hunter disposi-
tions by him of the equitable interest in the shares held by the Appellants
as nominees for him?

If the word " disposition " is given its natural meaning, it cannot, I
think, be denied that a direction given by Mr. Hunter whereby the beneficial
interest in the shares theretofore vested in him became vested in another
or others is a disposition. But it is contended by the Appellants that the
word " disposition " is to be given a narrower meaning and (so far as
relates to inter vivos transactions) be read as if it were synonymous with
" grants and assignments " and that, given this meaning, it does not cover
such a direction as was given in this case. As I am clearly of the opinion,
which I understand to be shared by your Lordships, that there is no justi-
fication for giving the word " disposition" a narrower meaning than it
ordinarily bears, it will be unnecessary to discuss the interesting problem
that would otherwise arise. It was for this reason that your Lordships
did not think it necessary to hear learned counsel for the Appellants in reply
on this part of the case.

My Lords, the argument for narrowing the meaning of " disposition " was
that the Law of Property Act, 1925, was a consolidating Act, that among
the Acts which it consolidated was the Statute of Frauds (29 Car. 2 c. 3)
section 9, that that section enacted that " all grants and assignments of any
" trust or confidence shall likewise be in writing, signed by the party granting
" or assigning the same, or by such last will or devise, or else shall likewise
" be utterly void and of none effect", and that therefore the word
" disposition " in section 53 (1) (c) of the 1925 Act is to be given the same
meaning as would be given to " grants and assignments" in section 9
of the Statute of Frauds.

My Lords, the principles applicable to the construction of a consolidat-
ing Act are not in doubt. The presumption is that such an Act is not
intended to alter the law, but this prima facie view must yield to plain words
to the contrary, see Gilbert v. Gilbert and Boucher [1928] P. 1 per Scrutton, L.J.
at p. 8. If the Law of Property Act, 1925, was a typical consolidating Act,
the question would be whether the alteration from " grants and assignments "
to " disposition " changed tine law by enlarging the area of void transactions
—a question that might not be easy to answer. But the Act of 1925 cannot
be thus regarded. It was, it is true, a consolidating Act, but it was, with a
number of other Acts, the culmination of a body of legislation by which
a large part of the law of real and personal estate was profoundly altered.
The story opens with the Law of Property Act, 1922, the title of which
begins with the words: " An Act to assimilate and amend the law of Real
" and Personal Estate ". It in fact effected comprehensive changes in the
law. Section 191 (2) enacted that it should come into operation on the
1st January, 1925. But it did not, and was never intended to, come into
operation at all. In 1924 a second Act was passed. It was entitled:
" An Act to amend the Law of Property Act, 1922, and the enactments
" thereby affected, and to facilitate the consolidation of the law relating to
" conveyancing and property", and other matters. This Act, which was



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the result of a prolonged examination of the Law of Property Act, 1922,
by a committee presided over by the late Lord Romer, paved the way for
the 1925 Act. It was, as has already appeared, an Act amending an Act
which had itself radically changed the law. Section 3 is for our present
purpose the only relevant section. It provided that " The amendments and
" provisions, for facilitating the consolidation of the statute law relating
" to conveyancing and property, contained in the Third Schedule to this Act,
" shall have effect." This Schedule was in two parts, the first part being
entitled " Amendments " and the second part " Provisions Facilitating Con-
" solidation of the Law of Property and Conveyancing". The fifteenth
paragraph of the second part is, so far as is material, as follows: —

" 15. Sections one to (three and seven to nine of the Statute of Frauds
" shall take effect as if inserted in the principal Act and be read as
" follows ".

There then follow the provisions which are exactly reproduced in section 53
of the 1925 Act. It was provided by section 12 (3) that the Act should
come into operation on the 1st January, 1926. In the meantime the Law
of Property Act, 1925, was drafted embodying the alterations in the law
relating to conveyancing and property made by the Acts of 1922 and 1924.
It repealed the third section and the third Schedule of the 1924 Act and itself
came into force on the 1st January, 1926. I have only dealt in rough
outline with the complicated scheme of legislation which transformed the
law of real and personal property. But I have said enough to show that
the Act of 1925, though in a sense a consolidating Act, in fact consolidated
Acts which themselves were amending Acts. While, therefore, as Lord
Romer (then Lord Justice Romer) indicated in In re Turner's Will Trusts,
District Bank, Limited v. Turner [1937] Ch. 15 at p. 26 in the comparable
case of the Trustee Act, 1925, it is incredible that the Legislature intended
in the 1925 Act to make further and radical changes in the law as enacted in
the preceding Acts, the question is what changes had been effected in those
Acts. And since they purported to be and were amending Acts, there is no
principle of construction which should impose upon them an interpretation
appropriate to a consolidating Act. They must, and therefore so must the
1925 Act, be construed so as to give each word the meaning proper to it in
its context. So construed the word "disposition " in section 53 (1) (c) has
the .natural meaning which I attributed to it at the opening of this Opinion.

I have not, my Lords, forgotten the contention that, as the relevant
provision substituting what became section 53 of the 1925 Act for certain
sections of the Statute of Frauds are to be found in Part II of the Third
Schedule to 'the 1924 Act, whereas Part I was headed " Amendments," the
provisions in Part II ought not to be read as amending the existing statutory
law if any other reasonable interpretation is possible. But I cannot give
any weight to this argument, for the most cursory glance reveals that the
provisions in Part II, even those in paragraph 15 itself, contain what are
undeniably amendments of the law. Accordingly I cannot allow this
argument to prevail and must read section 53 of the Act of 1925 as I read
paragraph 15 of the Third Schedule to the Act of 1924 in the sense which
I have already indicated.

I think it right to add that the argument for the Crown which has brought
me to this conclusion does not appear to have been put before Mr. Justice
Upjohn or the Court of Appeal.

The appeal must, in my opinion, be dismissed with costs.

My noble and learned friend, Lord Reid, who is unable to be here today,
has intimated to me that he agrees with this Opinion.

Lord Radcliffe

MY LORDS,

If there is nothing more in this appeal than the short question whether the
oral direction that Mr. Hunter gave to his trustees on the 18th February, 1955,
amounted in any ordinary sense of the words to a " disposition of an



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" equitable interest or trust subsisting at the time of the disposition ", I do
not feel any doubt as to my answer. I think that it did. Whether we describe
what happened in technical or in more general terms the full equitable
interest in the 18,000 shares concerned, which at that time was his, was
(subject to any statutory invalidity) diverted by his direction from his owner-
ship into the beneficial ownership of the various equitable owners, present
and future, entitled under his six existing settlements.

But that is not the question which has led to difference of opinion in the
Courts below. Where opinions have differed is on the point whether his
direction was a " disposition " within the meaning of section 53 (1) (c) of the
Law of Property Act, 1925, the argument for giving it a more restricted
meaning in that context being that section 53 is to be construed as no more
than a consolidation of three sections of the Statute of Frauds, sections 3, 7
and 9. So treated " disposition ", it is said, is merely the equivalent of the
former words of section 9, " grants and assignments ", except that testamentary
disposition has to be covered as well, and a direction to a trustee by the
equitable owner of the property prescribing new trusts upon which it is to
be held is a declaration of trust but not a grant or assignment. The argument
concludes, therefore, that neither before 1st January, 1926, nor since did
such a direction require to be in writing signed by the disponor or his agent
in order to be effective.

In my opinion it is a very nice question whether a parol declaration of
trust of this kind was or was not within the mischief of section 9 of the
Statute of Frauds. The point has never, I believe, been decided and perhaps
it never will be. Certainly it was 'long established as law that while a declara-
tion of trust respecting land or any interest therein required writing to be
effective, a declaration of trust respecting personalty did not. Moreover,
there is warrant for saying that a direction to his trustee by the equitable
owner of trust property prescribing new trusts of that property was a declara-
tion of trust. But it does not necessarily follow from that that such a direc-
tion, if the effect of it was to determine completely or pro tanto the sub-
sisting equitable interest of the maker of the direction, was not also a grant
or assignment for the purposes of section 9 and therefore required writing
for its validity. Something had to happen to that equitable interest in order
to displace it in favour of the new interests created by the direction: and it
would be at any rate logical to treat the direction as being an assignment of
the subsisting interest to the new beneficiary or beneficiaries or, in other
cases, a release or surrender of it to the trustee.

I do not think, however, that that question has to be answered for the
purposes of this appeal. It can only be relevant if section 53 (1) of the Law of
Property Act, 1925, is treated as a true consolidation of the three sections
of the Statute of Frauds concerned and as governed, therefore, by the general
principle, with which I am entirely in agreement, that a consolidating Act
is not to be read as effecting changes in the existing law unless the words
it employs are too clear in their effect to admit of any other construction.
If there is anything in the judgments of the majority of the Court of Appeal
which is inconsistent with this principle I must express my disagreement
with them. But in my opinion it is impossible to regard section 53 of the Law
of Property Act, 1925, as a consolidating enactment in this sense. It if
here that the premises upon which Upjohn, J. and the Master of the Rolls
founded their conclusions are, I believe, unsound.

The Law of Property Act, 1925, itself was no doubt strictly a consolidating
statute. But what it consolidated was not merely the Law of Property Act,
1922, a statute which had itself effected massive changes in the law relating
to real property and conveyancing, but also the later Law of Property
(Amendment) Act, 1924. The Statute of Frauds sections had not been
touched by the Act of 1922: but they were in effect repealed and re-enacted
in altered form by the operation of section 3 of the 1924 Act and the provisions
of the Third Schedule to that Act. The Schedule is divided into two Parts,
the contents of Part I being described simply as " Amendments " and the
contents of Part II being headed by the description " Provisions Facilitating
"Consolidation . . . ". I suppose that the authors of the 1924 Act
understood what was the significance of the division of the Third Schedule
into these two Parts under their different headings. I cannot say that I do.
Each Part, when examined, is seen to contain numerous amendments of

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various previous statutes relating to real property and conveyancing, apart
from the 1922 Act itself, and in this sort of matter I cannot see how one
can satisfactorily measure the degrees of substance involved in the various
changes. The point is that they were avowedly changes. If is paragraph 15
of Part II of the Third Schedule which deals with the Statute of Frauds: and
though the introductory words do seem to suggest that the sections concerned
are only being re-enacted in different words, it is apparent, when they are
read through, that this is not so and that alterations of more or less moment
are in fact being made. This new wording is what is carried into section 53
of the 1925 Act.

For these 'reasons I think that (there is no direct link between section
53 (1) (c) of the 1925 Act and section 9 of the Statute of Frauds. The link
was broken by the changes introduced by the amending Act of 1924, and it
was those changes, not the original statute, that section 53 must be taken as
consolidating. If so, it is inadmissible Do allow the construction of the word
" disposition " in the new Act to be limited or controlled by any meaning
attributed to the words " grant" or "assignment" in section 9 of the old Act.

I agree that the appeal should be dismissed

Lord Cohen

MY LORDS,

I also agree.

Lord Keith of Avonholm

MY LORDS,
I agree.

(32578) Wt. 8056—5 35 11/59 D.L./PA/19