The Gazette 1976

GAZETTE

January-February 1976

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.

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",

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".

In this situation of potential conflict between interest

and duty, to what extent may this "highly interested"

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'

so that an examination of some of the leading

cases is necessary before an attempt can be made to

extract some workable principles.

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

: —

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,

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

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

Curzon-Howe

Chitty, J. spoke

of the tenant for life's "absolute right to sell" in

language too similar to that of Pearson, J.,

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).

Re Hunt Settled Estates,

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

Walker

(No.

2),

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

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

Walker (No. 1)

would have been decided differently.

However, Joyce J.'s judgment

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