Greenwold v Pike

This is an application under s.48 of the Administration Justice Act 1985 for a direction that the trustees of the Philip Greenwold 2003 settlement should administer the assets of the Settlement on the footing:

The application is made upon the basis that the trustees have obtained the advice of Mr Michael Waterworth of counsel to the effect that the settlement should be so construed. The evidence shows that Mr Waterworth has a 10 year High Court qualification as required by s.48(1)(b) of the Act.

Section 48 confers a discretion on the court where the conditions imposed by subsection 1 (a) and (b) are met, but subsection (2) prohibits the Court making an order under subsection (1) if it appears to the court that a dispute exists which would make it inappropriate for the court to make the order without hearing argument.

The present case is complicated by the fact that, prior to a full investigation of the facts, the trustees received an opinion from Mr Brian Green QC to the effect that although clause 7.1 was of no effect (being a standard form clause wholly irreconcilable with the specific terms of the Settlement and plainly included by mistake) he regarded it as by no means clear that clause 1(8)(b) should be construed so as to include ‘widow’ within the word “spouse”. On the contrary, his opinion was that Mrs Greenwold, the widow of the Tenant for Life referred to in clause 1(8)(b) would have an uphill struggle in establishing, purely as a matter of construction, that she should be regarded as continuing to be his “spouse” after his death.

The principal reason for the difference of opinion between Mr Waterworth and Mr Green is that subsequent research (now proved in evidence) has shown that in conversations between the draftsman of the Settlement and its settlor (who was also the Tenant for Life), oral discussion about his wife as beneficiary used her name “Natalie” rather than either “spouse” or “widow”. Plainly, that evidence gives rise to a well arguable case for rectification, but rectification, however strong a case for it, lies out-with the jurisdiction conferred by section 48.

Nonetheless, Mr Waterworth has advised both that the evidence I have mentioned ought in the modern would to be treated as admissible on the question of construction, and that in any event, regardless of that evidence, his firm view, contrary to that of Mr Green QC, is that the word “spouse” in clause 1(8)(b) does include a widow of the Tenant for Life.

I am not persuaded without hearing argument, that evidence of a conversation between the draftsman of an inter vivos settlement and the settlor is admissible for the purposes of construction, rather than rectification, where the evidence is as to intention rather than, within the dictionary principle, evidence demonstrating that a particular word was used by both of them as having a settled but not necessarily universally accepted meaning. Again, the question whether such evidence is admissible as a matter of construction seems to me appropriate for argument.

Beyond that, it seems to me that there is a clear difference of opinion between well qualified counsel as to the true construction of clause 1(8)(b) of the Settlement, if regard is not had to that evidence, and one which it would be inappropriate for me to resolve without hearing argument.

Furthermore, treating the matter purely as one of discretion, it seems to me that it would be better for the beneficiaries as a whole, who include a number of minors not yet able to deal with the matter themselves, to have this issue finally and bindingly resolved, rather than merely made the subject of directions to the trustees. The evidence suggests that this is a settlement of considerable value. Little needs to be done in preparing the matter for an ordinary trial, which could conveniently include both the question of construction and the arguable rectification claim at a single brief hearing. It is most unlikely that the evidence in support of the rectification claim will be subject to serious challenge.

Accordingly, I give leave to the claimants to amend the present Claim Form to the extent necessary to enable the matter to be determined the usual way at a trial. Consideration will have to be given to the joiner of Mrs Greenwold and an appropriate party to represent the remainder of the beneficiaries.