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Perpetuities and the Act of 1964

Published online by Cambridge University Press:  16 January 2009

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Extract

The rule against perpetuities, it will be remembered, (a) fixed a permissible perpetuity period, namely, the duration of lives in being plus twenty-one years plus (where relevant) the period of gestation, and (b) prescribed that every contingent interest in property is void ab initio if there is any possibility that the contingency may occur after the perpetuity period has expired. A contingent gift or interest is one which depends upon the happening of some event which may never happen—e.g., a gift “to the first child of Elsie who shall swim the Channel.” In this example two contingencies are involved: (i) being born and (ii) swimming the Channel. But (i) is bound to happen, if at all, within Elsie's lifetime; and so (unlike (ii)) it cannot cause the gift to be void for perpetuity.

Type
Research Article
Copyright
Copyright © Cambridge Law Journal and Contributors 1965

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References

1 s. 8 of the Act exempts from the perpetuity rule merely administrative powers, such as a power of leasing or of sale given to trustees. Formerly these were void if exercisable after the perpetuity period. But now such powers, even those conferred (invalidly) before the Act, are valid.

2 Hitherto such a period of years, since it might (if over 21) exceed lives in being and 21 years would not do: hence the old system of specifying certain (e.g., royal) lives plus 21 years.

3 But once the court has decided whether A will be able to bear or beget children at a particular time, that decision is to be binding in any subsequent perpetuity proceedings about that same disposition (subs. (3)); so semble it will then be too late to bring medical evidence on the point.

4 The rule in Saunders v. Vautier requires that all the possible beneficiaries be sui juris and unanimons.

5 s. 3 (1). Subss. (2) and (3) deal likewise with general powers of appointment (and other rights) which used to be void if they might not become exercisable within (or might be exercised after) the perpetuity period.

6 But possibly helpful for a testamentary appointment made by him?

7 These include, for a class gift (or a special power of appointment among a class), any member of the class or “potential member” —defined in s. 15 (3) as one who as yet has fulfilled only some of the conditions of membership; and likewise, for an individual gift, includes a person who as yet has fulfilled only some of its conditions: s. 3 (5) (b).

8 But any group of lives comprised in (i) and/or (ii) is to be excluded if its numbers make it impracticable to ascertain who is the last survivor of them.

9 s. 3 (4) (b)—i.e., as at common law when there are no appropriate lives.

10 In fact this was an error of drafting—since the very section, s. 4. which repeals the old s. 163, is so worded as to cure only cases which “ apart from this section” would be void: and of course, “apart from” s. 4, s. 163 would still exist and so would still be curing these cases itself: see J. D. Davies (1965) 81 L.Q.R. 346–347. However, this abortive situation can presumably be construed away by the court—as was done (in Re Lockwood [1958]Google Scholar Ch. 231) with a like difficulty created by the Intestates' Estates Act, 1952.

11 But what if A already has an only son who has not yet reached 30? will we be able to treat that son as a “life in being” for the purposes of the rule and of s. 3, so that as far as he is concerned the gift cannot be too remote? Presumably yes: see ante, note 7. But if, at testator's death, A already has a son who is 30, the remainder is vested ab initio, and so can never infringe the perpetuity rule.

12 Curiously, s. 3 does not anywhere say that the period of waiting stops if and when something happens which shows that the vesting must occur, if at all, within the perpetuity period. But this is obviously its intention.

13 This is the proper procedure: for s. 2 seemingly does not authorise executors or trustees to act on its presumptions without an order.

14 By “potential member,” the Act means someone who as yet has satisfied some only of the conditions identifying membership of the class and may subsequently satisfy the rest of them—s. 15 (3); e.g., someone who is the specified kind of person but has not yet reached some age specified by the gift.

15 If A has predeceased testator there is no problem. Nor is there a problem if A outlives him but is a woman, aged 55 or more, to whom the court applies s. 2. Nor (unless the class-closing rule is firmly negatived by the will) is there a problem if, at testator's death, A already has a grandchild.

16 i.e., s. 4 (4). Since this gift specified no age, subs. (1) (reduce the age) is obviously irrelevant.

17 If the testator's will had specified a perpetuity period of 80 years from his death (s. 1), the only difference would be that one would have waited, under s. 3, to see whether, within that 80 years Tom would die or be held unable to beget further children.

18 If some grandchild of A were already born and 25 at testator's death, the class would close at once and there would be no question of perpetuity. But, since none had yet done so here, the class will not close until one does—which may not happen within the perpetuity period. [And even if one does eventually reach 25 in time, the closing of the class would not validate this gift (without help from s. 4) if there are also other grandchildren who as yet are under 25.]

19 This would suffice to save the gift provided that each of these grandchildren has already reached 21.

20 It is s. 4 (3) which, as a last resort, thus corrects (by exclusion) class gifts having an age condition when s. 4 (1) (reduce the age) fails to cure. But it is s. 4 (4) which does so for other class gifts.

21 Re Frost (1889) 43 Ch.D. 246.

22 For the special power, s. 3 (3) adds that any appointments made in time are to be treated as though the power were valid.

23 s. 15 (2).

24 s. 15 (5).

25 s. 15 (2).

26 The House of Lords had already held that the power of advancement, implied in trusts and wills by the Trustee Act, 1925, s. 32, is equivalent, for perpetuity purposes, to a special power of appointment: Re Pilkington's Will Trusts [1964]Google Scholar A.C. 612.

27 s. 15 (6).

28 s. 8, concerning the administrative powers of trustees, is outlined in note 1, ante

29 e.g., an option, within s. 9 (2) above, more than 21 years old. The section's words seem much wider than can have been intended: see Morris and Wade (1964) 80 L.Q.R. at pp. 524–525.