The Gazette 1976

January-February 1976

GAZETTE

his tenancy for life, and if he is satisfied that he will derive a larger benefit from the sale of the estate than from its enjoyment in its present con- dition he has a right to have it sold." And, in Cardigan v. Curzon-Howe , 10 Chitty, J. spoke of the tenant for life's "absolute right to sell" in language too similar to that of Pearson, J., 11 to be worth repeating here. Other cases, however, reveal a much closer super- vision by the Court of the tenant for life in the exercise of his statutory powers. It was not only by conferring on him powers such as the power to sell the settled land that the Legislature showed its confidence in the tenant for life. The Act of 1882, by s.22(2), requires the investment or other application of capital money to be made according to the direction of the tenant for life who has already directed payment of the capital money to the trustees of the settlement, instead of into Court, in exercise of the option conferred on him by s.22(l). In Re Hunt Settled Estates, 12 Farwell, J. indicated that the exercise of this power was reviewable: — It is contended, however, by the tenant for life that, if the tenant for life chooses property which is leasehold with the right number of years un- expired and there is no mala fides, the court cannot interfere with him in any case. I dissent altogether from that proposition. The tenant for life is a trustee under s.53, and his liability follows from his position as trustee; he is neither in a better or a worse position than an ordinary trustee who has a discretionary power to invest in leaseholds. Of course, there are certain cases in which the Courts have interfered with the exercise by the tenant for life as a statutory power but which do not raise any diffi- cult questions of principle. In Wheelwright v. Walker (No. 2), 13 for example, the court restrained the tenant for life from selling to a third party for less than the price offered by a beneficiary, or from selling at all without informing the beneficiary of the proposed price and giving him two days in which to increase his offer. Even if s.4(l) of the Act of 1882 did not require every sale to be made at the best price that can reasonably be obtained, the proposed sale for the lower price was clearly a breach of the trust imposed on the tenant for life by s.53. Not altogether so clearly within the category of those cases where the exercise of the tenant for life's powers is vitiated by something akin to fraud in Middlemas v. Stevens There the defendant was entitled to a house during widowhood and, being about to remarry, pro- posed a grant to lease to her prospective husband so as to continue in occupation. S.7(2) of the Act of 1882 requires that the lease shall reserve the best rent that can reasonably be obtained. However, it is not clear from the report whether the adequacy of the rent was seriously in question and certainly Joyce J.'s brief judgment makes no mention of it. If the adequacy of the rent were beyond dispute, why should not such a lease be valid even if granted with an ulterior motive? At any rate, if selfish motives were sufficient to in- validate the transactions of this "selfish trustee", the tenant for life, then cases such as Wheelwright v. Walker (No. 1) would have been decided differently. However, Joyce J.'s judgment 15 seems to suggest that he would be prepared to go further in scrutinizing the exercise by the tenant for life of his statutory powers than at least some of the other judges: — Apart from any question as to her relationship to the gentleman who is the intended lessee, if I found a person, whose interest in the settled property would come to an end to-morrow, persisting in

ABUSE OF HIS STATUTORY POWERS BY THE TENANT FOR LIFE by J. M. G. Sweeney, solicitor, Acting Professor of Law, University College, Galway. The exercise by the tenant for life of his powers under the Settled Land Acts has not resulted in any excessive litigation in view of their revolutionary character. 1 One thinks, for example, of the power to sell the settled land which might well be expected to be a perennial source of litigation between the tenant for life and his successors. Whilst, on the one hand, the Act of 1882 confers on the tenant for life "virtually the status of absolute owner", 2 on the other hand he is "deemed to be in the position and to have the duties and liabilities of a trustee" for "all parties entitled under the settle- ment". 3 In this situation of potential conflict between interest and duty, to what extent may this "highly interested" 1 trustee, the tenant for life, be restrained from the selfish exercise of his statutory powers? The judicial dicta to be found in the textbooks seem often to be contra- dictory' 5 so that an examination of some of the leading cases is necessary before an attempt can be made to extract some workable principles. In Wheelwright v. Walker (No. 1),° the tenant for life was aged about 70 and the land was settled on his daughter after his death on trust for sale. The daughter sold her remainder to the plaintiff. After the Act of 1882 came into operation, John Walker, the tenant for life and defendant, contracted to sell the settled land. The plaintiff sought an injunction to re- strain this sale on the grounds that he wanted to occupy the estate on the defendant's death and that no trustees for the purposes of the Act had been appointed. Pearson, J. granted the injunction but only until such time as trustees for the purposes of the Act were appointed, saying 7 : — So far as I can see, there is no restriction what- ever in the Act on the power of a tenant for life to sell. There is nothing that I can see in the Act to enable the Court to restrain him from selling, whether he desires to sell because he is in debt, and wishes to increase his income; or whether, without being in debt, he thinks he can increase his income; or whether he desires to sell from mere unwillingness to take the trouble involved in the management of landed property; or whether he acts from worse motives, as from mere caprice or whim, or because he is desirous of doing that which he knows would be very disagreeable to those who expect to succeed him at his death. There is not, so far as I can see, any power either in the Court or in trustees to interfere with his power of sale. In a subsequent action by remaindermen to have a sale at the request and by the direction of the tenant for life restrained, 8 evidence was adduced that a sale of the estate was quite unnecessary and would be very prejudicial to the remaindermen. Of course, there was evidence to the contrary as well, but it is significant that the tenant for life admitted that, if the estate were his own absolutely, he would not sell it. However, Bacon V. C.'s rejection of the remaindermen's claim was chiefly due to his conclusion that under the settle- ment and, even more so, under the Act of 1882, the Court had no jurisdiction to interfere with the exercise of his powers by the tenant for life: — It is his right to derive any benefit he can from

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