The footing of the regulations against sempiternities and accretions is that it goes against public policy to bind belongings up indefinitely and accumulate income for an inordinate period of clip. The justification is the demand to put limitations on how far one coevals can command belongings at the disbursal of future coevalss. Therefore, the jurisprudence stipulates that such belongings must fall within a sempiternity period.
The Perpetuities and Accumulations Act 1964 ( afterlife ‘the Act’ ) came into force on July 16Thursday1964. It was based upon a study by the Law Reform Committee in 1956 and alleviated a batch of the rough consequences produced by the common jurisprudence. The Act provided that an involvement must enthrone within a specified period of clip, neglecting which, the belongings returns to the trustor.
The regulation restricts the extent to which future involvements in belongings can be created by necessitating that they take consequence within a specified period of clip ( the ‘perpetuity period’ ) . The Act allows a trust to stipulate a period of up to eighty old ages before the involvement will enthrone. Alternatively, the regulation against inordinate accretions limits the period during which income under a trust can be accumulated to 21 old ages and so the trust instrument may stipulate ‘lives in being plus 21 years’ . Therefore, under the Act, there are two possible sempiternity periods: a specified period of up to 80 old ages, or a life ( or lives ) in being plus 21 old ages.
Before the Act, the regulation against sempiternities was made up of two parts: a ) the sempiternity period was ‘lives in being plus a period of 21 old ages ; and B ) if a future involvement in belongings was non certain to enthrone within that period, the trust was deemed nothingness from the beginning. So to be valid, it had to be certain that a gift would enthrone within the sempiternity period.
Yet where created after 15ThursdayJuly 1964, that involvement will merely be null where it must enthrone or take consequence outside the sempiternity period. It is necessary to ‘wait and see’ , if need be for the whole sempiternity period, to find whether the involvement is valid [ 1 ] . So future involvements are no longer invalidate from the beginning due to the possibility that they may enthrone outside the sempiternity period. Furthermore, the 1964 Act besides provided for a 21year sempiternity period for options.
The Act introduced a figure of other gift-saving devices, viz. :
- givens and grounds as to future parentage ;
- regulations for the decrease of age eventualities and the exclusion of category members to avoid farness ;
degree Celsiuss ) conditions associating to the decease of a surviving partner ;
- commissariats for the economy and acceleration of anticipant involvements.
A figure of commissariats addressed specific jobs originating from the common jurisprudence regulation ( for illustration, s.2 on givens as to birthrate ; s. 4 on age decrease and the exclusion of members of a category ; and s.5 on conditions associating to the decease of a lasting partner ) .
Section 4 of the Act provides thatwhere an trust is limited by mention to a individual making a specified age over 21 old ages, and it is evident or becomes evident that the trust would be null for farness, but that it would non be null if the specified age had been 21, so the temperament shall be treated as if it had been limited by mention to the age nearest to that age which would hold prevented it from being nothingness.
This was an betterment on s.163 of the Law of Property Act 1925 because it allowed the giver ‘s purpose to be more about realised.Section 163 was repealed by the Act.
As respects accretions, the following have ceased to hold consequence: a ) ss.164-166 of the Law of Property Act 1925 ( which imposed limitations on roll uping income, capable to makings ) and B ) s.13 of the Perpetuities and Accumulations Act 1964 ( which amended s.164 of the 1925 Act ) . There are some general limitations on the range of the regulation ; subdivision 13 lists a figure of involvements to which the regulation does non use including assorted easements over land.
It is argued that farther reform in this country is necessary. The Law Commission recommends that the regulation against sempiternities be restricted to involvements and rights originating under volitions and trusts. It would no longer use to rights over belongings such as options, rights of first refusal or future easements. Neither would it use to commercial belongings minutess, for which there is small justification.
Where the regulation continues to use, there would be one individual sempiternity period of 125 old ages. The fortunes in which the regulation applies should be set out in clear statutory signifier, taking the current complexnesss, incompatibilities and anomalousnesss.
The Law Commission’s report gives two illustrations where the regulation against sempiternities prevents landholders doing the agreements that they prefer [ 2 ] .
Reform should endeavor to accomplish the followers: a ) to enable parties to cover with land more efficaciously by leting sensible contracts and other agreements which are non presently possible ; B ) to let greater flexibleness in covering with belongings and drafting trusts ; degree Celsiuss ) to do the jurisprudence more comprehendible, thereby cut downing the range for mistakes ; and d ) cut down legal and other professional costs.
The regulation against sempiternities began as a flexible reconciliation rule [ 3 ] yet has become stiff over the centuries because it did non take history of viing involvements and germinating policies [ 4 ] . Indeed, Gray [ 5 ] stated that rough consequences flow from the ‘remorseless application’ of the common jurisprudence. Additionally, Milsom described the complex set of regulations as ‘learned confusion’ [ 6 ] . Gallanis criticised the position in the Law Commission Report [ 7 ] that the regulation should be simply amended instead than abolished because its reconciliation of present and future involvements in distribution of belongings is merely.
It is concluded that the regulation is necessary to strike a balance between the freedom of the present coevals and that of future coevalss to cover as they wish with their belongings. However, the jurisprudence as it presently stands is non without defects and execution of the above proposals for reform would greatly relieve such failings.
Note for the client:
The 1000 word count bound did non let for every requested beginning to be mentioned within the essay above. However, for the interest of completeness, I have briefly summarised these instances for the client’s attending below. I hope this is of aid.
Re Gaite [ 1949 ] 1 All ER 459– the testatrix provided for “ such of the grandchildren as shall be populating at my decease or born within five old ages at that place from who shall achieve the age of 21 old ages or being female marry under that age ” . G survived the testatrix and the inquiry arose whether the trusts infringed the regulation against sempiternities. Assuming that G had a kid within five old ages after the testatrix ‘s decease, that kid could non perchance hold a kid within five old ages and that was indispensable in order to measure up for rank of the category. This was so non on history of physical impossibleness, but because the Age of Marriage Act 1929 provided that a matrimony between individuals, either of whom was under the age of 16 old ages, should be null. In interpreting the regulation, the Court had to hold respect to the statutory jurisprudence of England, and, accordingly the regulation had non been infringed.
Re Grant [ 1979 ] 3 All ER 359– a gift to a non-charitable association which does non make a trust can non be valid, except where it may be construed as a gift to the bing members of the association, either as joint renters or beneficially, capable to their contractual rights and duties as members.
Re Recher [ 1972 ] Ch. 526– it was held that a gift can non be an accumulation to the financess of an administration different from that which the testatrix had had in head, to be held on the footings of a contract different from that contemplated by her. In this instance, the gift failed.
Re Kelly [ 1932 ] IR 255– ‘lives in being’ must be human lives, non carnal lives.
Re Greens WT [ 1985 ] 3 All ER 455– it was held that:
- a trust for the alleviation of inhuman treatment to animate beings was clearly leading facie charitable ;
- a period is sufficiently specified for the intents of subdivision 1 of the Perpetuities and Accumulations Act 1964 if it is made unequivocally clear what that period is to be ;
- on the true building of the will the gift vested within the sempiternity period and was hence valid ;
( four ) although the tribunal would ever seek to give consequence to the purposes of the testatrix, the tribunal was entitled to take a different position from her as to the chance that the boy was still alive, and consequently was entitled to, and would, assume his decease in 1943. The legal guardians would hence be permitted to cover with the estate on the terms that the boy had predeceased the testatrix.
Re Allott ( 1924 ) 2 Ch 498– the common jurisprudence place was that although administrative powers do non impact good involvements, they may nevertheless create or alter belongings involvements and were hence capable to the regulation against sempiternities at common jurisprudence. So in this instance, a power given to a legal guardian to allow rentals during the life-time of a individual as yet unborn was null at common jurisprudence. Equally, a power given to a legal guardian to sell crushed rock cavities when they had been worked out ( Re Wood ( 1893 ) 3 Ch 381 ) was null.
Under the common jurisprudence regulation against sempiternities, the involvement must hold been certain to enthrone from the clip of its creative activity. A good illustration of this is that of Re Wood: the testate directed his legal guardians to transport on his concern as a gravel contractor until the crushed rock cavities had been worked out, so sell them and split the returns among his issue so populating ; at the day of the month of the will, it was clear that the cavities would shortly be worked out and in fact this happened within 6 old ages ; however, looked at from the day of the month of the will, there was a possibility that the cavities would non be worked out within the sempiternity period of 21 old ages: the gift was hence excessively distant
Andrews V Partington ( 1791 ) 3 Bro. C.C. 401 ; 2 Cox 223– where a gift is to members of a category of individuals, such as `all my grandchildren ‘ , as opposed to named persons, there are certain regulations, known as category shutting regulations or the regulation in Andrews v Partington, which determine when the rank of the category is to be ascertained if it is non specifically provided for in the title or will. Good drafting should do it unneeded to use these regulations.
‘Gray on Perpetuities’ – J.C Gray ; 4ThursdayEd ; p629
Textbook on Land Law ( 10ThursdayEdition ( Revised ) ) – Judith-Anne MacKenzie and Mary Phillips ; pages 326-344
Trusts Law, Text and Materials ( 4ThursdayEdition ) – Graham Moffat, Dr Gerry Bean and Professor John Dewar ; pages 117 ; 301-306 ; 303-304 ; 345 ; 854-855 ; 906
Land Law ( 5ThursdayEdition ( Revised ) ) – Margaret Wilkie, Peter Luxton and Rosalind Malcolm ; Oxford University Press ; page 254
‘The Modern Law of Perpetuities’ – RH Maudsley ; 1979 ; pages 219 – 221
The Rule Against Perpetuities – JHC Morris and WB Leach ; 1964 ; pages 12-13
‘The regulation against Perpetuities ‘ – Jeffrey Goldsworthy ; Trusts & A ; Trustees Journal ; Volume 2
‘The Rule Against Perpetuities and the Law Commission’s Flawed Philosophy’ – Thomas P. Gallanis ; C.L.J. 2000, 59 ( 2 ) ; Cambridge Law Journal, Volume 59 ; Part 2 ; pages 284-293
Ruth Deech – Lives in Bing Revived ( 1981 ) 97 LQR 593, 594
Re Dawson ( 1888 ) 39 Ch.D. 155
Viner V Francis ( 1789 ) 2 Cox 190 ; 2 Bro. C.C. 658
DCA ( Department for Constitutional Affairs ) website – Civil Law Reform: hypertext transfer protocol: //www.dca.gov.uk/deprep9902/repchap2.htm – civlaw