Chopra v Bindra

A trust instrument must be construed as a whole. Where one clause appears to confer absolute interests on sale and another deliberately provides for the survivor if the property remains unsold at the first death, the court should, if the language permits, prefer a construction giving effect to both. The apparent absolute interests may therefore be construed as joint lives interests in the unsold property and its proceeds, enlarging on an actual sale. A survivor’s remainder is then not repugnant. A disposition made immediately and irrevocably by deed is not testamentary merely because enjoyment is postponed until death.

Akash Chopra and Angela Bindra bought a house as tenants in common and executed a declaration of trust. Clause 1 specified their shares of net sale proceeds. Clause 4 provided that, if either died before sale, the survivor would take the whole proceeds absolutely. Akash later died before sale, and Jennifer Chopra, his widow and sole beneficiary under his will, claimed his share. Angela claimed the whole under clause 4.

Etherton J held that clause 1 created joint lives interests until actual sale and that clause 4 was a valid remainder: [2008] EWHC 1715 (Ch). The appeal concerned whether clause 4 was void as repugnant to an absolute interest, or alternatively testamentary.

Rimer LJ delivered the leading judgment. Richards LJ and Arden LJ agreed. The appeal was dismissed.

1. The deed had to be construed as a whole. The court should give effect to all its provisions where the language permits, and should be slow to adopt an interpretation which makes a deliberately included clause ineffective. In that exercise, the court could take account of the unlikelihood that the parties intended clause 4 to be legally ineffective, drawing on the approach described in Bank of Credit and Commerce International SA v. Ali [2002] 1 AC 251.
2. Clause 1 was to be read as creating joint lives interests in the house and its proceeds until an actual sale. A sale during the joint lives enlarged those interests into absolute interests. If the house remained unsold at the first death, clause 4 operated as a valid remainder in favour of the survivor. It was therefore not repugnant to clause 1.
3. The appellant’s reliance on the doctrine of conversion and section 3 of the Trusts for Land and Appointment of Trustees Act 1996 did not alter the construction. Even assuming that the parties understood the former doctrine, it did not justify interpreting clause 1 in isolation.
4. The alternative argument under section 9 of the Wills Act 1837 failed. A testamentary disposition is intended to take effect only after death and remains revocable during the maker’s lifetime. The deed operated immediately and irrevocably. Clause 4 was therefore a remainder, not an invalid testamentary disposition. Re Pfrimmer [1936] 2 DLR 460 and Re White (1987) 38 DLR (4th) 631 were distinguishable.

• Court of Appeal (Civil Division) — In Chopra v Bindra [2009] EWCA Civ 203, the appeal was dismissed.
• High Court of Justice, Chancery Division — Etherton J held that clause 1 created joint lives interests until actual sale and that clause 4 was a valid remainder: [2008] EWHC 1715 (Ch).