Naylor & Anor v Barlow & Ors

Where Wills Act 1837, section 33 substitutes the issue of a deceased beneficiary, the substituted beneficiaries take the interest which their parent would have taken, subject to the same condition. Ignorance of a condition does not make compliance physically impossible and is no excuse where the will makes the gift over depend on failure to satisfy the condition. The court distinguishes physical impossibility from lack of notification. A condition subsequent is generally preferred where the wording permits either construction. Relief against forfeiture is unavailable where the gift over is to persons other than the defaulting beneficiary. A milk quota attached to farmland passed with the land rather than into residue.

The claimants, trustees of the wills of John and Hilda Hine, sought directions concerning the distribution of a farm formerly owned by John Hine. John’s will gave one-third shares to his wife and two sons, subject to each son paying specified sums to his siblings within nine months of the testator’s death. One son, Philip, predeceased the testator, leaving two children. The issue was whether section 33 of the Wills Act 1837 substituted Philip’s children into the gift and, if so, whether they took subject to the payment condition despite never being informed of it. The court also addressed rent and milk-quota deductions.

1. Section 33 substitution. The court agreed that section 33 of the Wills Act 1837, as amended by the Administration of Justice Act 1982, applied. The will showed no contrary intention, and Philip’s gift therefore took effect as a gift to his issue.
2. Nature of the condition. The payment requirement was a condition subsequent. Following Re Greenwood [1903] 1 Ch 749, that construction is preferred where the wording permits either a condition precedent or subsequent.
3. Effect on substituted beneficiaries. Under section 33(3), substituted beneficiaries step into the shoes of the original beneficiary for all purposes. They therefore took subject to the same condition subsequent. To construe the statute as removing the condition would improperly interfere with testamentary autonomy and the testator’s expressed scheme. The reasoning in Ling v Ling [2002] WTLR 553 was accepted as applicable to both class gifts and individual gifts, and to conditions subsequent as well as contingencies.
4. Ignorance and impossibility. Failure to notify the beneficiaries did not make compliance impossible. The court distinguished physical impossibility, such as the stipulated subject matter no longer existing or performance being objectively unavailable, from ignorance of a condition which could have been performed. The wording of the condition required failure, not refusal or neglect. Re Quintin Dick [1926] Ch 992 was distinguishable, while Astley v Earl of Essex (1874) LR 18 Eq 290 and Re Hodges’ Legacy (1873) LR 16 Eq 92 supported the conclusion that ignorance was no excuse unless the will made notification relevant.
5. The substituted gift accordingly failed and the gift over took effect in favour of Beryl and Basil. Relief against forfeiture was unavailable under Simpson v Vickers (1807) 14 Ves Jnr 341, 33 ER 552.
6. The court accepted a pragmatic deduction for John’s unpaid rent. Limitation barred the remedy, not the underlying right, so it did not prevent deduction in the accounting. The estate’s half share of the milk quota passed with the farmland under clause 3, applying Harries v Barclays Bank [1997] 2 E.G.L.R. 15 and Crossley v Armour [2008] NICh 4.

First-instance decision. The claim was issued under Part 8, transferred from London to Manchester, and determined after trial. The court invited counsel to agree an order giving effect to the judgment.