A vested interest in the Hand
Ruth Hughes discusses a recent decision on the rights of adopted children in historic wills and the impact of the Human Rights Act 1998
The recent case of Hand v George  EWHC 533 (Ch) concerned the will of Henry Hand, who died on 9 June 1947. He was survived by three children. In his will dated 6 May 1946 he left the residue of his estate to them in three equal shares for life with the remainder in each case to such of their children as attained the age of 21 and, if more than one, in equal shares.
One of Henry’s children had adopted children but had no natural children. The issue before the court was whether the adopted children were entitled to benefit or whether the remainder interest passed to cousins who were not adopted.
The answer should have been simple. As the law stood in 1946 and 1947, adopted children would not benefit without the testator having signalled an intention to benefit them. This is the clear effect of the Adoption of Children Act 1926, the Adoption of Children Act 1949, and the Adoption Act 1976. Today the situation is different; in order to exclude adopted children a testator has to make this exclusion explicit.
The adopted children argued that this rule of construction was a breach of their article 8 right to family life and their article 14 non-discrimination rights and that it should be reversed under the Human Rights Act 1998 (HRA), despite the fact that this would mean the HRA had retrospective effect.
Mrs Justice Rose agreed with the adopted children and construed the will so that they benefited. In order to come to this surprising result, she followed the strict Strasbourg jurisprudence that adopted children could not be treated differently from natural children, even if this displaced the rights of natural children, and further that differential treatment came within the remit of article 8. This was addressed in Marckx v Belgium  ECHR 2, regarding an illegitimate child, and followed in Pla and Puncernau v Andorra  ECHR 334.
In Fabris v France  ECHR 427, the article 1 protocol 1 rights to non-interference with property of legitimate children under French succession law were displaced by an illegitimate child’s claim to equal treatment. In the domestic context, Rose J followed Wilson v First County Trust Ltd (No.2)  UKHL 40, a case which concerned a pawnbroker and consumer credit, regarding the potential retrospective effect of the HRA.
Rose J did not follow the only domestic authority directly on point, which was the decision in Re Erskine 1948 Trust  EWHC 732 (Ch), for a variety of reasons. In particular, Rose J suggested that Re Erskine was inconsistent with the Wilson decision.
Had Rose J followed Re Erskine, answers in future cases concerning adopted or illegitimate children could only be reached by considering the circumstances of each particular case. Such an approach would be piecemeal and haphazard. The result in Re Erskine was that the adopted children benefited, but only in the highly unusual circumstances of the case. The judge might have considered the result fair on the facts but that authority was not principled and was unlikely to lead to clarity or fairness in other cases. The decision to replace Re Erskine with a more principled analysis is to be welcomed.
Having considered the domestic and Strasbourg authority, Rose J ‘read down’ the interpretive provisions of the 1976 Act. No declaration of incompatibility was made. Rather, Rose J held that they was no interference with the cousins’ article 1 protocol 1 rights because, although under English law these rights were vested in interest, they were not ‘vested’ in the sense meant by Lord Rodger of Earlsferry in Wilson and therefore could be interfered with by the court because ‘it was not suggested by the defendants... that they have done anything to avail themselves of the rights that they had under Henry Hand’s will’.
The result of Rose J’s decision will be that adopted or illegitimate children will benefit when testators and settlors did not intend them to in dispositions made when the law was clear. It could be that children whose illegitimate or adopted relatives are likely to benefit under this decision will try to avail themselves of their rights quickly, before any claim is made in relation to the relevant will or trust. Interests vested in interest but not in possession could perhaps be sold, if any market can be found for them, because then those with a beneficial interest will be able to show that they have availed themselves of the rights.
The decision is also surprising because it seems very unlikely that parliament would have intended when deciding to enact the HRA that the Act would have affected the devolution of interests under the will of deceased persons who died not only well before the legislation was passed, but before the European Convention on Human Rights was even drafted.
One might have thought that the interpretation of a will or a trust was clearly a ‘horizontal’ situation where governmental interference with protected rights was irrelevant, or that in deciding the extent to which historic private dispositions are affected by new familial constructions such as adoption the local legislature would be given a significant margin of appreciation. Moreover, the fact that the law was clear when Mr Hand made his will and he was entitled to rely on that (whether he consciously did so or not) played no part in Rose J’s decision making. That strikes a very different note from the importance which the Supreme Court recently placed on testamentary freedom in Ilott v Mitson  UKSC 17.
The decision in Hand is important because it may have an impact not only on historic wills but also upon peerages and entails which remain in existence.
Ruth Hughes is a barrister at 5 Stone Buildings