The Gazette 1976

GAZETTE January-February 1976

in value between land and money" 21 and that the object of the Act was "to render land a marketable article, notwithstanding the settlement". 24 Hence, if a beneficiary's interest in the settled land is converted into cash, without his consent or, perhaps, even know- ledge, he is unlikely to have any redress. Of course, the tenant for life must obtain the best price or rent but that does not mean that the Court will interfere, on this score, unless the price or rent is "infinitely below" 25 the real value of the property, or at least the inadequacy is substantial 2 " (presumably because market- ability would be impeded if the adequacy of the price or rent could be questioned too freely). The judges have clearly recognized that the object of the Act of 1882 was to enable the tenant for life of real estate comprised in a settlement to take it out of the settlement, and to substitute for it, ex mero motu, the value of it in pounds, shillings, and pence. 27 But they have not accepted that the convertibility of the settled property other than land was intended by the legislation and this explains, it is suggested, their conservative interpretation of s.55 in relation to, e .g., sales of the settled chattels. And when the power, the exercise of which is being questioned, is a power not directly connected with the marketability of the settled land, such as the power to direct investments, 28 then the exercise of that power is also closely supervised. Since it can be explained as a fraud on a power, the difficulties (if any) of squaring Middlemas v. Stevens with this rationale of the various decisions are theor- etical (even on the supposition that the proposed rent was adequate 2 "). Despite previous comments. 1 " a dis- tinction can be drawn between the conduct of the selfish, or even malicious, tenant for life who "sells land that will obviously be of far greater value in a few years' time" 11 and that of the widow who attempts to frustrate her husband's will. The former is a commercial trans- action whilst the latter is not, because it lacks, inter alia, that element essential to commerce which, in a somewhat similar case, 12 Romer, J. described as "real bargaining". Morally, the widow's conduct does not compare unfavourably with that of the other tenant for life, but the latter enjoys the blessing of the Settled Land Acts. p. 163. 3. S.53 of the Act of 1882, re-enacted almost verbatim for England and Wales by s. 107(1) of the Settled Land Act, 1925. 4. Per Younger, J. in Re Earl of Stamford and Warrington (1916). 1 Ch. 404, 420. 5. See, e.g., Cheshire, op. cit., pp. 162-163. 6. (1883) 23 Ch.D. 752. 7. at pp. 758. 759. 8. Thomas v. Williams (1883) 24 Ch.D. 558. 9. at p. 566. 10. (1885) 30 Ch.D. 531 at p. 539. 11. Supra. 12. (1905) 2 Ch. 418; (1904-7) All E.R. Rep. 736 13. (1883) 31 W.R. 912. See also Chandler v. Bradley (1897) 1 Ch. 315. where the tenant for life was restrained from granting a lease at a reduced rent for a bribe and Re Earl Somers (1895) 11 T.L.R. 567 where a teetotal tenant for life was restrained from letting a public house on terms that no intoxicating liquor be sold. 14. (1901) 1 Ch. 574. 15. at p. 577. 16. (1890) 45 Ch.D. 402. 1. (The Act of 1882) "is much more revolutionary in its principles than any of the Acts of 1925": Hanbury's Modern Equity . 9th ed., p. 513. 2. Cheshire's Modern Law of Real Property, 11th ed

granting a lease which was objected to by all those entitled to in remainder, I should regard the case with considerable suspicion. It is clear from the correspondence that the real object of the lady in granting the lease is that she may herself continue in occupation of the premises. That, in my opinion, is not a bona fide exercise of her powers as tenant for life. Also amongst those decisions which have emphasised the fiduciary character of the tenant for life's powers is Re Earl of Radnor's Will Trusts 1 '"' which deals with the power to sell settled chattels conferred on the tenant for life by s.37 of the Act of 1882. This power to sell "heirlooms" does not differ in principle from, e.g., the power to sell the settled land. It, also, is subject to the statutory trust imposed by s.53 but, unlike the power to sell or lease the settled land, it cannot be exercised without an order of the Court. In the present case, Chitty J. observed 17 that the Act appeared to treat the tenant for life as the head of the family whose state of mind, as he exercised his statutory powers, was not as irrelevant as other judges had suggested 18 : — When a tenant for life, in proposing to sell heir- looms, is attempting to use his power maliciously, or to spite his successor . . ., or where he is acting wantonly or capriciously, the Court would un- doubtedly decline to sanction the sale. On appeal against Chitty's order authorizing the sale, Lord Esher, M.R., stated the duties of the tenant for life in terms which have been adopted, subject to qual- ifications, by Cheshire 11 ' as of general application to the exercise by the tenant for life of his statutory powers: — He must take all the circumstances of the family, and of each member of the family who may be affected by what he is about to do; he must con- sider them all carefully, and must consider them in the way that an honest outside trustee would consider them; then he must come to what, in his judgment, is the right thing to do under the cir- cumstances — not the best thing, but the right thing to do. 11 " Lord Esher went on to explain that by distinguishing the "right" from the "best" thing, he meant to convey that the Court would not lightly differ from the tenant for life exercising his honest discretion as "head of the family". But this discretion is not entirely untrammelled since, Lord Esher suggests, there should be a bias against the exercise of the power: — 1 should think that a fair and honest trustee would lean against selling the heirlooms; for I agree . . that prima facie, unless something in the circum- stances justifies it, an honest trustee would be in- clined to keep the heirlooms where the person who has settled them desired that they should be kept; therefore the leaning would be against a sale.' 21 Is it possible to reconcile these paradoxical judicial pronouncements on the duty of the tenant for life in exercising his statutory powers? Can any consistency be established between those decisions which require only pecuniary accountability and those others which re- quire the tenant for life to consider all the interests of the parties entitled under the settlement "in the widest sense — not merely pecuniary interests, but wishes and sentimental feelings, and so on"? 22 It is submitted that whether the fiduciary character of the power is expanded or not depends, in general, on the kind of settled property involved and what is thought to be the policy of the Settled Land Acts in respect of such property. It has been said that the Act of 1882 "incorporated a new idea, of complete equality

17. at p. 413. 18. See supra.

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