Retroactive human rights law
Matthew Duncan explains why a 60-year-old settlement is subject to the Human Rights Act
John Christopher Druce, a former partner of Druces and Attlee (now Druces) created a settlement on 10 December 1959. He died in 1972.
The vesting day of the trust was 10 December 2019 – the 60th anniversary of the trust. The trustees sought clarification as to the identity of the members of the class of beneficiaries of the settlement – both as a matter of construction of the settlement and as a matter of fact – to enable them to make a final distribution from the settlement fund.
The trustees applied to the High Court for an order pursuant to section 48 of the Administration of Justice Act 1985, having obtained written opinions from Henry Legge QC and on which they were seeking to rely.
In his judgment (In Re JC Druce  EWCH 3701), Judge Keyser QC mentioned that the case raised a number of interesting points, “not least of which is that it is another illustration of how no area of the law of England and Wales, even the most seemingly traditional, is insulated from the effects of the Human Rights Act 1988”.
The difficulty in the case arose from the meaning of “beneficiaries” as defined in the settlement. There were a number of potential beneficiaries depending on whether they fell within the class as defined by the settlement.
Beneficiaries were defined as: “All the male descendants of the Settlor’s brothers and sisters who are already in being or shall be born before the Vesting Day.”
At common law, ‘descendants’ are confined to legitimate blood relations, therefore, on a literal reading of the definition within the settlement, a number of the potential members of the class of beneficiaries would be excluded because either they or their parents were illegitimate or adopted. Four of the potential beneficiaries were, in fact, illegitimate children.
However, Legge had prepared an opinion that a number of potentially excluded males were within the class of beneficiaries of the settlement.
Section 1(1) of the Family Law Reform Act 1987 provides that an illegitimate child is to be treated as a child in the same way as a legitimate child.
However, the provisions of the 1987 Act do not apply to dispositions made prior to that Act coming into force (which was the 4 April 1988).
As the settlement was created in 1959, on the face of it this would mean the Act did not apply. However, in Legge’s opinion the provisions of the 1987 Act did apply to the settlement. He referred to the case of Re Hand’s Will Trust  EWHC 533 which concerned the provisions of the Adoption Act 1976. In that case, the children were adopted and at common law they did not fall within the class of ‘children’ as defined in the will trust.
A four-step analysis was used in that case:
- The rights of the children were protected by the European Convention on Human Rights (ECHR) such that to treat adopted children differently to natural children would be discriminatory.
- The provisions of the Adoption Act were in breach of the ECHR as it preserved the common law position in a way that was discriminatory against adopted children.
- The scheme of the 1976 Act allowed the transitional provisions in the Act to be read down so that the provisions could be construed to apply to instruments made before 1976.
- The reading down of the provisions was not open to an objection that it involved an inappropriate retrospective application of the Human Rights Act 1998 (HRA).
Legge submitted that the reasoning used in Re Hand’s Will Trust could be applied to the question of illegitimacy under the 1987 Act.
The text, Lewin On Trusts, was cited as authority and the opinion expressed that “the Human Rights Act 1998, as the law now stands after the decision in Re Hand Will Trust severely restricts the extent to which effect is given to the statutory provisions limiting the property rights of adopted, illegitimate and legitimated children in relation to dispositions pre-dating the legislation concerned”.
So what did Judge Keyser decide in light of those submissions? He concluded that he could see “no reason why that approach, when applied to the 1987 Act, should not be capable of importing into the Act words that, though altering its effect to make it compliant with Convention rights, were nevertheless consistent with the scheme of the Act and did not go against its grain”.
Keyser J then had to consider the issue of inappropriate retrospectivity. There is a presumption, as stated by Lord Justice Staughton in the case of Secretary of State for Social Security v Tunnicliffe  2 All ER 712, that “parliament is presumed not to have intended to alter the law applicable to past events and transactions in a manner which is unfair to those concerned in them, unless a contrary intention appears”.
The question arose in Re JC Druce as to whether the HRA “could bring about a retroactive alteration of the identity of the beneficiaries at a past point in time”.
The judge found that the effect of the Act was that it “is capable of changing the contents of the class of beneficiary during the period in which duties fall to be performed or powers fall to be exercised under the settlement. The fact that someone was not a beneficiary when a power fell to be exercised or a duty to be performed at such and such a past date does not mean that that person cannot be, by reason of the Human Rights Act, a beneficiary when a power or duty falls to be exercised or performed now”.
Distributions from the settlement before the Act came into force would be unaffected by the Act, but after the Act has come into force it will potentially apply to further distributions. However, the judge did not consider that retrospectivity presented an issue in this case.
One of the potential beneficiaries had a mother who had been adopted overseas. Descendants, as defined by common law, is limited to legitimate blood relations. The mother was not a blood relation and it therefore followed that her child, as the child of an adopted mother, would not be considered a descendant at common law, and therefore would not be a beneficiary.
Article 14 of the ECHR states: “The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth of other status.”
Legge submitted that if it is impermissible for legislation to discriminate on the grounds that a child is adopted, it must be impermissible, and contrary to article 14, to discriminate against a child on the grounds that the child’s mother was adopted. Keyser agreed with this interpretation.
The judge was prepared to make an order under section 48 on the basis of counsel’s opinion. He also made a Benjamin order to enable the trustees to distribute the settlement fund to the members of the class of beneficiaries that had been identified.
Matthew Duncan is a partner at Druces druces.com