Meaning Of The Word Dependants Sachs Lj example essay topic

Critical Analysis for Equity and Trusts Mr Bertram Baden in 1941 established a trust for the benefit of his employees. Clause 9 of the deed stated 'The trustees shall apply the net income of the fund in making at their absolute discretion grants to or for the benefit of any of the officers and employees or ex- officers or ex-employees of the company or to any relatives or dependants of any such persons in such amounts at such times and on such conditions (if any) as they think fit. ' The words of this deed caused problems regarding the objects named and the certainty of these named objects especially regarding relatives and dependants. Mr Baden died in 1960 and in 1962, when the fund assets had reached lb 163,000 Mr Baden's executors claimed that the trust was void for reasons of uncertainty. The question now is whether under the test attached to discretionary trusts the trust fails on uncertainty of the objects; referring to 'dependants' and 'relatives'. When applying the new test 'can it be said with certainty that any given individual is or is not a member of the class?'.

Sachs LJ looks at the certainty under the rule attributed to re Gulbekeians's Settlement 'through the eyes of a businessman seeking to advance the welfare of the employees of his firm and those so connected with the employees' rather than through the eyes of 'a man making a will'. His own opinion is that conceptual certainty was referred to when the, 'is or is not a member of the class' test was enunciated. Once the conceptual certainty of the class is defined then it has to be decided who is a member of that class. He states that they have to prove to be within the class if they cannot prove it then they are not within it.

The executors have argued that according to the words in the test 'or is not' the trust can be made invalid if it is impossible to prove that somebody was not in the relevant class and this theme seems to be reoccurring throughout their argument. Mr Sachs sees this as fallacious and certainly not what was meant when Mr Baden created the trust. All three judges seem to think that the case should never have got this far and that the executors are trying to make a workable trust unworkable for their own benefit. Stamp LJ. at one point believed that it was 'just an exercise in semantics'. Megaw LJ. says that too much emphasis has been placed, by the executors, on the use of the words 'or is not' from the test, and Sach LJ. adds that the situation lacks attraction and could have been avoided. When discussing the meaning of the word dependants Sachs LJ uses the authority of Simmons vs. White brothers [1899], to highlight that the concept of dependants is a factual one and not a legal one.

The meaning of the word would differ in all circumstances as would the degree of dependence but in its simplest form it is someone who is wholly or partly dependant on another and to prove whether someone is or is not a dependant is evidential and not a legal matter. He states that 'there is thus no conceptual uncertainty inherent in that word'. Megaw LJ. weakens the argument for ambiguity of the word 'dependant' further by saying that it is no-more uncertain than any ordinary, well understood word and that if it is good enough not to need further explanation within an Act of Parliament (Administrations of Estate Act 1925) Critical Analysis for Equity and Trusts then it is good enough for the said trust. Stamp LJ briefly states his opinion that each individual whose level or degree of dependence is unclear is a case for the court to decide but it does not give linguistic uncertainty as was implied by the executor's council When discussing the meaning of the word relatives they all reach the same conclusion but approach it differently. The executors claimed that if it is impossible to prove that someone is not a relative then uncertainty arises which again is understood from the 'is or is not's ection of the House of Lords test.

Megaw LJ. thinks that this contradicts the last part of the test which states 'does not fail simply because it is impossible to ascertain every member of the class. ' The meaning of the word relative can have a broad or a narrow meaning. Each judge believes that if the broad meaning is used i.e. anyone who can trace themselves back from a common ancestor then the object would be unworkable. (Genghis Khan is reported to have over 5,000,000 ancestors). All 3 judges understand that it is their job to make the trust workable but arrive at different tests Sachs LJ reaches the conclusion that it is an objective opinion of the trustees as to whom an honest and reasonable person would introduce as their relative. Stamp LJ. talks about the next of kin test which makes the class clearly defined and rests his case on the fact that Mr Baden could not have intended relatives unknown to the employee to receive benefit.

Mr Megaw believes in a rather vague, 'fair, proper and sensible administration of the trust fund' in respect of relatives and defendants. I believe that each judge has reached an acceptable conclusion in dismissing the appeal. By trying to make the trust work, the judges needed to make some clear and workable distinctions for the objects, 'dependants' and 'relatives'. Making the object of 'dependant' workable was proved to be quite straightforward but 'relative' less so. The most clear-cut definition of relative came from Stamp LJ. which although could be seen as being too narrow a class is probably the most practical. The other two judges relied on the trustees making fair and reasonable decisions which, when looking at the wording of Clause 9 in the trust, would appear to be the intention of Mr Baden himself.