Equity and succession

Settlement creating gift in favour of limited class - gift vested on beneficiary attaining 21 - clear words required to convert into contingent giftBarclays Bank Trust Co Ltd v McDougall and Others: ChD (Rimer J): 27 June 2000

A father settled a fund on constructive trusts for his children for life and on protective trusts for his remoter issue.

After the death of his last child the fund was to be held for such of his grandchildren as attained the age of 21 provided that if any grandchild died during the trust period leaving a child or children then that child or children were to take their parents share.

One of his grandchildren, who was 21 at the date of the settlement, died during the trust period without leaving issue.

The trustees sought a declaration as to whether that grandchild's interest was contingent on his surviving the trust period as well as being contingent on his attaining 21.

If there was a double contingency then his interest had vested upon his attaining 21, and it had not divested to any child of his since he did not have any finally, since he did not survive the trust period, it would have fallen to be divided between the other beneficiaries.

JBW McDonnell QC (instructed by Furely Page Fielding & Barton, Canterbury) for the second, fourth and fifth defendants.

Vivian Chapman (instructed by D J Freeman) for the third defendants.

Alexandra Mason (instructed by Payne Hicks Beach) for the sixth and seventh defendants, personal representatives of the deceased grandchild.

Held, finding in favour of the sixth and seventh defendants, that the interest of the grandchildren was contingent on them attaining the age of 21; that the gift to the grandchild who had died during the trust period had vested on the date of the settlement; that if a settlement created what appeared to be a vested gift it would ordinarily require clear words in a subsequent part of the instrument to convert the gift into a contingent one; that the wording of the settlement was not clear enough to operate to impose a double contingency on the gift; the fund was therefore divisible between those grandchildren who had attained the age of 21 and the estate of the grandchild who had died during the trust period.