The same principles concerning an intention to create a trust apply to testamentary dispositions. Precatory words, such as words of entreaty, prayer, confidence, expectation or hope, may or may not create a trust. Such ambiguous words are required to be construed by the courts, in the context of the will and surrounding circumstances, in order to ascertain the intention of the testator.
In Re Adams and Kensington Vestry, the will and surrounding circumstances were so unclear that no trust could have been intended by the precatory words used by the testator.
Re Adams and the Kensington Vestry (1884) 27 Ch D 394, CA
Facts
A testator left property, by his will, subject to the following clause: ‘unto and to the absolute use of my wife, Harriet, in full confidence that she will do what is right as to the disposal thereof between my children either in her lifetime or by will after her decease.’ The question in issue was whether a trust in favour of the children was created.
Held
No trust was created and the wife acquired the property beneficially:
Cotton LJ: Undoubtedly, to my mind, in the later cases, especially Lambe v Eames (1871) 6 Ch App 597 and Re Hutchinson and Tenant (1878) 8 Ch D 540, both the Court of Appeal and the late Master of the Rolls shewed a
desire really to find out what, upon the true construction, was the meaning of the testator, rather than to lay hold of certain words which in other wills had been held to create a trust, although on the will before them they were satisfied that that was not the intention. I have no hesitation in saying myself, that I think some of the older authorities went a great deal too far in holding that some particular words appearing in a will were sufficient to create a trust. Undoubtedly confidence, if the rest of the context shews that a trust is intended, may make a trust, but what we have to look at is the whole of the will which we have to construe, and if the confidence is that she will do what is right as regards the disposal of the property, I cannot say that that is, on the true construction of the will, a trust imposed upon her. Having regard to the later decisions, we must not extend the old cases in any way, or rely upon the mere use of any particular words, but, considering all the words which are used, we have to see what is their true effect, and what was the intention of the testator as expressed in his will. In my opinion, here he has expressed his will in such a way as not to shew an intention of imposing a trust on the wife, but on the contrary, in my opinion, he has shewn an intention to leave the property, as he says he does, to her absolutely.
In contrast, in Comiskey and Others v Bowring-Hanbury, the will and surrounding circumstances were sufficiently clear for the court to conclude that a trust was intended by the testator.
Comiskey and Others v Bowring-Hanbury and Another [1905] AC 84, HL
Facts
Mr Hanbury, the testator, transferred his property by his will to his widow:
. . . in full confidence that she will make such use of it as I should have made myself and that at her death she will devise it to such one or more of my nieces as she may think fit and in default of any disposition by her thereof by her will or testament. I hereby direct that all my estate and property acquired by her under this my will shall at her death be equally divided among the surviving said nieces.
The widow having acquired the property took out an originating summons to determine whether, on construction of the will, she took the property absolutely or subject to a trust in favour of the nieces.
Held
On construction of the will, the intention of the testator was to transfer the property absolutely to his widow for life and, after her death, one or more of his nieces was or were entitled to benefit subject to a selection by his widow. Failing such selection, the nieces were entitled equally:
Lord Davey: My Lords, in my opinion the question really is this: do those words, ‘in default of any disposition by her thereof by her will or testament’, mean any disposition in favour either of the nieces or anybody else, or are they, as Mr Warmington contended, to be construed as relating to such a disposition as that which he has expressed his confidence that his wife would make? I come to the conclusion that the testator is speaking only of a default of any such disposition as he had expressed his confidence that his wife would make, and, if so, I am of opinion that there is a good executory limitation.
Therefore, even if you treat the words ‘in confidence’ as only expressing a hope or belief, the will would run thus:‘I hope and believe that she will give the estate to one or more of my nieces, but if she does not do so, then I direct that it shall be equally divided between them.’ I think that is a perfectly good limitation. The true antithesis I think is between the words ‘such one or more of my nieces as she may think fit’ and the words ‘equally divided between my surviving said nieces’.
Likewise, in Re Steele’s Will Trusts, a trust was intended by the testatrix where her will was drafted in similar terms to a precedent that created a trust.
Re Steele’s Will Trusts, National Provincial Bank Ltd v Steele [1948] Ch 603, HCM
Facts
The testatrix, Mrs Adelaide Steele, who died on 19 November 1929, by her will provided as follows:
I give my diamond necklace to my son, Charles, to go and be held as an heirloom by him and by his eldest son on his decease and to go and descend to the eldest son of such eldest son and so to the eldest son of his descendants as far as the rules of law and equity will permit (and I request my said son to do all in his power by his will or otherwise to give effect to this my wish).
Charles died in April 1945 having made a will declaring: ‘I give my diamond necklace to my trustees upon trust for my son, Ronald, during his life and after his death for his eldest son absolutely.’
It was clear that the provision in Adelaide’s will bore a striking similarity to a clause included in the testatrix’s will in Shelley v Shelley (1868) LR 6 Eq 540. In that case, the court decided that a trust was imposed on the eldest son of the settlor for life with remainder to his eldest son for life and continuing, subject to the perpetuities rule, in trust for the eldest son.
The question in issue was whether Charles took the necklace absolutely or whether there was a trust for a succession of the eldest sons of eldest sons, subject to the perpetuity rule.
Held
On construction of the will, a trust was created in accordance with the intention of the testatrix.
aforesaid’, the relevant provision in the will which I have to construe in terms mutatis mutandis exactly corres- ponds with those in the will which fell to be construed in Shelley v Shelley (1868) LR 6 Eq 540. In that case it was held that on the true construction of that provision a valid executory trust was created for John Shelley for life with remainder to his eldest son for his life and on the death of that eldest son in trust for his eldest son to be a vested interest in him when he should attain 21, but if he should die in his father’s lifetime or after his death without having attained 21, leaving an eldest son born before his father’s death, in trust for such last mentioned eldest son to be a vested interest when he should attain 21, and, subject to these limitations, the jewels vested in John Shelley absolutely and passed by his will. The basis of the decision was this. Sir W Page Wood VC, held that the words of the gift to John Shelley ‘to go and be held as heirlooms by him and by his eldest son on his decease’ if they stood alone, would have been a gift to the first taker for life and on his death would have gone to the next taker absolutely.
It is, therefore, clear that, if Shelley v Shelley governs the present case, there is complete machinery for working out the trust on which this necklace ought to be held. The attack is made on the basis that, in view of the modern trend of decisions as regards precatory trusts, Shelley v Shelley should not be followed. I do not propose to embark on a detailed review of the authorities, but will content myself with observing that it appears to me from a review of the later authorities to which I was referred – Re Hamilton (Decd) [1895] 2 Ch 370, Re Williams (Decd) [1897] 2 Ch 12 and Re Hill (Decd) [1897] 1 QB 483 – that there is no ground for regarding the authority of Shelley
v Shelley as being no longer binding.
Shelley v Shelley has stood for eighty years and I have before me a will which, as I have already observed, is, as
regards the relevant passage, couched in the same language mutatis mutandis as that which was considered by Wood VC, in Shelley v Shelley. That appears to me to afford the strongest indication that the testatrix by this will, which appears clearly on the face of it to have been prepared with professional aid, intended that the diamond necklace in question should devolve in the same manner as the jewellery in Shelley v Shelley was directed to devolve by the order made therein. Having regard to the nature of this indication of intention and to the circumstances, I cannot see any good reason why, notwithstanding the admitted trend of modern decisions, I should treat Shelley v Shelley as wrongly decided, and, therefore, a case which I ought not to follow.
I come to the conclusion that I must declare that, on the true construction of the will of the testatrix, the diamond necklace should have been held on trust for Charles Steele for his life, and after his death for the second plaintiff, Charles Ronald Steele, for his life, and after his death for David Steele, the third plaintiff, for his life, and after the death of the survivor of them on trust for the eldest son or grandson of the third plaintiff, David Steele, and otherwise in the manner decided in Shelley v Shelley including the ultimate trust (in default of any male issue of David Steele who take an absolutely vested interest) in favour of Charles Steele absolutely and that the order in this case will follow mutatis mutandis the minutes which appear in the case of Shelley v Shelley. If the courts decide that the transferor did not manifest an intention to create a trust, the assignee or transferee takes the property beneficially. This is treated as a gift to the assignee.
Note
Despite Wynn-Parry J’s ruling that he was obliged to come to the same conclusion as Wood VC in Shelley v Shelley, the issue of intention is one of fact that is not subject to binding precedent.
On construction of the will the donor may create a general gift in favour of A, subject to a specific intended gift in favour of B. If the specific gift fails, the court may treat the gift to A as absolute or unconditional, unhindered by any limitation in favour of B. In the case of wills, A’s estate is entitled to retain the property: see Hancock v Watson [1902] AC 14. This principle is sometimes referred to as the rule in Lassence v Tierney (1849) 1 Mac & G 551.
Hancock v Watson [1902] AC 14, HL
Facts
A testator gave his residuary estate to trustees on trust for his widow for life and after her death to be divided into five portions. Two portions were donated to a friend, Susan Drake, for life and after her death upon trust for her children, but in default of issue in favour of the children of the testator’s brother, Charles, on condition that they attain the age of 21 or earlier marriage. Susan died without issue. At the time of her death, Charles’s children had attained the age of 21 or married. The questions in issue were: (a) whether Charles’s children took the property in
accordance with the testator’s will; or alternatively (b) on Susan’s death, whether her estate became entitled to the property absolutely.
Held
The intended gift in favour of Charles’s children was void for infringing the perpetuity rule. On construction, the testator created an absolute gift in favour of Susan, subject to trusts which failed. In these circumstances, the absolute gift took effect to the exclusion of the resulting trust. Thus, Susan was entitled to dispose of the property in any way she liked:
Lord Davey: The appellant’s second point is that the two fifths allotted to Susan Drake on failure of the gift over goes to the next of kin of the testator, and not to Susan’s representatives. I confess to some surprise at hearing this point treated as arguable. For, in my opinion, it is settled law that if you find an absolute gift to a legatee in the first instance, and trusts are engrafted or imposed on that absolute interest which fail, either from lapse or invalidity or any other reason, then the absolute gift takes effect so far as the trusts have failed to the exclusion of the residuary legatee or next of kin (of the original testator) as the case may be. Of course, as Lord Cottenham pointed out in Lassence v Tierney (1849) 1 Mac & G 551, if the terms of the gift are ambiguous, you may seek assistance in construing it – in saying whether it is expressed as an absolute gift or not – from the other parts of the will, including the language of the engrafted trusts. But when the court has once determined that the first gift is in terms absolute, then if it is a share of the residue (as in the present case) the next of kin are excluded in any event.