Eligible Beneficiaries – Legitimacy In The Modern Age

 In Trusts

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The recent case of In the matter of the Duchy of Manchester English & Irish Settled Estates [2011] EWHC 1856 tackles the problem of whether or not certain children of 13th Duke of Manchester were eligible to benefit under the family settlements as ‘issue’ of the 13th Duke’s father or as ‘descendants’ of the 1st Duke given their parents bigamous marriage. Despite the aristocratic handles this is a matter of general interest in the interpretation of trusts particularly where relationships might not be all they appear and yet produce children.

The case concerned the application of the Legitimacy Act 1959, which was the Act in force when the settlements were created, and the subsequent Legitimacy Act 1976 which had a similar effect on the children of a void marriage. However, for these provisions to apply the father of the child had to be domiciled in England.

The Family Law Reform Act 1987 provides for a statutory presumption that one party to the marriage reasonably believes that the marriage was valid when a child is born after 4 April 1988.

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There was also the problem of establishing the 13th Duke’s domicile.

The facts

In 1969 family settlements were created which provided entitlement to the children who were the ‘issue’ of the 13th Duke’s father or the ‘descendants’ of the 1st Duke. Applying conventional approaches to construction of such documents might lead one to assume that only the legitimate issue or legitimate descendants could benefit but this would not be correct.

The 13th Duke lived in Australia and then in California. He moved to California in 1986 and met Wendy Buford in 1992 and in the following May 1993 they were purportedly married. However, he had never divorced Marion Stoner whom he had married in Australia on 17 March 1984 and did not divorce her until 1996. Wendy’s marriage was therefore bigamous and void. The bigamy did not come to light until June 2009.

There was no doubt that Wendy believed she was validly married. She separated from the Duke in 2006 and subsequently that void marriage was dissolved in California in august 2007.

Wendy and the Duke had two children: Alexander born on 13 May 1993 and Ashley, their daughter, born on 16 June 1999. Should the trustees of the family settlements provide for both these children?

The Legitimacy Act of 1959 provides:

“ (1) Subject to the provisions of this section, the child of a void marriage, whether born before or after the commencement of this Act, shall be treated as the legitimate child of his parents if at the time of the act of intercourse resulting in the birth (or at the time of the celebration of the marriage if later) both or either of the parties reasonably believed that the marriage was valid.

(2) This section applies, and applies only, where the father of the child was domiciled in England at the time of the birth or, if he died before the birth, was do domiciled immediately before his death.”

There were absolutely no doubts that Wendy believed her marriage to the Duke to be valid; but in any event the statutory presumption in the Family Law Reform Act 1987 might apply given both children were born after 4 April 1988.

The conditions in subsection (1) above therefore were met. The domicile of the 13th Duke was not easy to establish. However, the Judge did not feel it was necessary to make a determination since the only possible domiciles he could have were English (by virtue of his father); Australia (Victoria/New South Wales) or the United States (California).

In 1969 when the settlements were created the laws of Australia and California both had provisions enabling one to treat the children of a bigamous marriage as legitimate.

The law

The Judge considered various cases to decide how Alexander and Ashley should be treated as a matter of English for the purposes of the settlements:

In Re Bischoffsheim [1948] 1 Ch 1979 the Judge had to decide on the legitimacy of a particular beneficiary and said:

“….legitimacy is a question of status. That status is conferred or withheld, as the case may be, by the law of the domicile of origin, which is the law of the domicile of the parents at the time when the person whose legitimacy is in question was born. The status, once confirmed, remains with the person concerned throughout his or her life and will be recognised and given effect to by our courts, save only in cases where the person claims to succeed to real estate in England.”

The Court of Appeal in Re Goodman’s Trusts (1881) 17 Ch D 266 made a decision about statutory legitimation as opposed to deemed legitimacy. However, Cotton LJ said in that case:

“.. the law of England recognises as legitimate those children only who are born in wedlock. This is correct as regards the children of person who were at the time of the children’s birth domiciled in England. But the question as to legitimacy is one of status and in my opinion by the law of England questions of status depend on the law of domicile.”

He went on to say that if a child is legitimate by the law of the place where his parents were domiciled at his birth (i.e. that child’s domicile of origin) then he is legitimate everywhere. The law of England, except in the case of succession to real estate in England, recognises and acts on this status.

In the same case James LJ said:

“….What is the rule which English law adopts and applies to a non-English child? This is a question of international comity and international law. According to that law as recognised, and that comity as practised, in all other civilised communities, the status of a person, his legitimacy or illegitimacy, is to be determined everywhere by the lawyer of the country of his origin – the law under which he was born. It appears to me that it would require great force of argument to arrive from legal principles, or great weight of authority clear and distinct, to justify us in holding that our country stands in this respect aloof in barbarous insularity from the rest of the civilised world. On principle, it appears to me that every consideration goes strongly to shew, at least, that we ought not to so stand. The family relation is at the foundation of all society, and it would appear almost an axiom that the family relation, once duly constituted by the law of any civilised country, should be respected and acknowledged by every other member of the great community of nations.”

Justice Floyd in this present case did comment on the awkward precedent of the House of Lords in Shaw v Gould (1868) LR 3 HL 55 but pointed out that the judges in both Bischoffsheim and Re Goodman’s Trusts had felt able to distinguish it since it turned on the validity of a Scottish divorce at a time when a marriage in England was not dissoluble by an order of the courts only by Act of Parliament. It turned on its own peculiar circumstances.

The Judge commented on the fact that Dicey, Morris & Collins on The Conflict of Laws 14th Edition 2006 and Cheshire & North: Private International Law 14th Edition both support the proposition that the English courts will recognise the status of legitimacy conferred on children by the law of their parents’ domicile.

The decision

Alexander and Ashley acquired the status of legitimacy by reason of the law of the domicile of each of their parents. That is the case whether the 13th Duke was domiciled in England, Australia or in California.

It therefore followed that the trustees of the English settlement were entitled to provide for them both. Counsel for the children indicated that the courts of Northern Ireland would be likely to decide the private international law issues in a similar way which would be sufficient reassurance for the trustees of the Irish settlement.

Practice points

Practitioners should be mindful of the question of legitimacy and private international law when construing the terminology of trusts and settlements.

Some older trusts may not benefit from the application of the Legitimacy Act 1959 but for most modern purposes the decision as to which children might be included in a beneficial class of ‘issue’ will include illegitimate children as long as their status is determined as included by the law of the domicile of their parents at the date of their birth.

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