In re Osoba, decd (Osoba v Osoba)

Where a will gives a whole fund, especially residue, to named beneficiaries for purposes such as maintenance or education, the stated purpose is ordinarily treated as a superadded motive and the gift as absolute, unless the will’s context or special circumstances indicate otherwise. The principle is one of construction, not an inflexible rule. A finite educational purpose may still fall within it where the benefit is extensive and the fund might be substantially exhausted. Where the same operative words govern several purposes, the interests are of the same quality; the court should not turn one into an absolute gift and the others into a trust or power. In the absence of words of severance, absolute interests given to several beneficiaries are held as joint tenants. A predeceasing beneficiary’s interest does not lapse, leaving the survivors entitled by survivorship.

Patrick Jacob Osoba’s Nigerian will gave his English residuary estate to his widow upon trust to use it for her maintenance, his daughter Abiola’s training up to university level, and his mother’s maintenance. The mother predeceased the testator and the widow later died.

Vice-Chancellor Megarry held that the widow and Abiola took the residue absolutely in equal shares, as tenants in common, under an order dated 15 December 1977, reported at (1978) 1 WLR 791. Anthony Osoba appealed, contending that the purposes left part of the residue undisposed of or supported a different beneficial construction. The respondents argued that the will created an absolute gift for the named beneficiaries. The central issues were whether the purposes were merely superadded purposes and whether the beneficiaries took jointly or in common.

1. Order varied. Lord Justice Goff delivered the leading judgment, with which Lords Justice Eveleigh and Buckley agreed. Clause 5 created an absolute beneficial gift of the residue for the widow, Abiola and the mother, rather than a purpose trust leaving any surplus subject to partial intestacy.
2. The construction principle in Re Sanderson’s Trusts and Barlow v Grant applies where the whole of a fund or its income is given for a stated purpose. In the absence of contrary context or special circumstances, the purpose is treated as the motive for the gift. The principle is not an inflexible rule of law. The will must be construed as a whole in the light of facts known to the testator.
3. The common words to be used in clause 5 governed all three purposes. They could not create an absolute gift for the widow while imposing a separate trust or power for Abiola or the mother. Abiola’s finite university training did not alter the result. Her age, the extensive continuing benefit and the possibility that the fund might be substantially exhausted supported treating the provision as an absolute gift. The residuary character of the gift also favoured an effective disposition rather than intestacy.
4. There were no words of severance. The three beneficiaries therefore took as joint tenants. The mother’s prior death caused no lapse; the widow and Abiola became entitled jointly on the testator’s death. Whether the widow severed the joint tenancy required an inquiry. The order was varied accordingly, subject to questions of severance and marshalling.
5. Lord Justice Buckley added that the residence proviso was irrelevant on the facts and did not affect the joint-tenancy issue. Lord Justice Goff also expressed a provisional view that any hotchpot issue concerning Nigerian assets would arise only if partial intestacy were established.

1. Court of Appeal varied the Vice-Chancellor’s order and declared that the widow and Abiola took the residuary estate as joint tenants, with an inquiry into severance and related matters.
2. High Court, Chancery Division held that the widow and Abiola took the residue absolutely in equal shares, as tenants in common, under the order dated 15 December 1977 reported at (1978) 1 WLR 791.