MADUGALLA AND OTHERS
COURT OF APPEAL.
. H. A. G. DE SILVA, J. AND T. D. G. DE ALWIS, J.
C.A. 186/79 (F) – D. C. COLOMBO 17388 (F).
MARCH 8, 1985.
Trust created by Last Will to pay income of all properties of the testatrix to her survivinghusband and• after his death the properties to vest on her descendants asdevised – Abolition of Fideitommissa and Entails Act No. 20 of 1972 isection5) – Does property vest absolutely in husband of testatrix ?
By the Last Will of the testatrix admitted to Probate in this case a Trust was createdwhereby she left the income of all her properties movable and immovable to herhusband Harry Halangoda and thereafter the properties were tp go to her descendantsas devised in the Will.
The trustee sold all the properties and formed a Trust Fund which was deposited withthe Loan Board. On the passage of the Abolition of Fideicommissa and Entails Act No.20 of 1972 Harry Halangoda claimed the money lying in the Trust Fund absolutely butthe District Judge rejected his claim. |On the death of Harry Halangoda during thependency of this case the present appellant was substituted in his room.)
The beneficial interest which Harry Halangoda held was only as to the income during hislife from the movable and immovable property of the testatrix and not dominiumoversuch property or the sale proceeds thereof. There was no succession by the succeedingbeneficiaries to the interest of Harry Halangoda as he had no beneficial interest in thecapital sum of the Trust. Hence Harry Halangoda was not entitled to the Trust Fundabsolutely.*
APPEAL from the judgment of the District Court of Colombo.
0. R. P. Gunatillakefor substituted petitioner-appellant.
Eric Amarasinghe, P.C. with Miss Gunigangoda for the respondents.
Cur. adv. vult.
May 3, 1985.
H. A. G. DE SILVA, J.
One Brenda Seelawathie Delwita died leaving a Last Will the probatewhereof was issued to her husband Harry Halangoda the originalPetitioner in these proceedings. By Clause 4 of the said Last Will atrust was created of all her movable and immovable properties in thefollowing terms
(a) Upon trust to pay the income thereof to her husband the saidHarry Halangoda during his life. –
(£}■ Upon trust from and after the death of her husband, both as tocapital and income thereof for her descendants who attain theage of 21 years or being female marry under that age, if morethan one in equal shares absolutely so that the children of anydeceased child of hers shall take equally between them only theshare which their parent would have taken and he or shesurvived the testatrix and had attained a vested interest.
If at the date of her death or at the death of her husband thereshall be no descendants surviving who shall attain a vestedinterest, upon trust both as to the capital and income as to onehalf part thereof to her sister Mildred Delwita wife of PercyMadugalla absolutely and as to the other half part to her brotherVictor Delwita absolutely. Provided however that if the saidMildred Delwita or Victor Delwita shall die in the testatrix'slifetime or in the lifetime of her husband Harry Halangoda,leaving issue living at the death of the survivor of herself or ofher husband, such issOe shall take the residuary estate as statedfor the devolution of her own children.
The Trustee sold the immovable properties in pursuance of thedirections in the Last Will and the amount realised after defrayingtestamentary expenses, formed the Trust Fund and this amount of Rs.89.376/40 was deposited with the Loan Board and the dividendsdeclared thereon were drawn by Harry Halangoda, the originalPetitioner and the immediate beneficiary under the said Trust. He waspaid the dividertds accruing “till 1.1.73 but thereafter the PublicTrustee, who purporting to exercise powers under the Administrationof Justice Law No. 44 of 1973, refused to pay the .said dividends toHarry Halangoda or his widow on the basis that they were not entitledthereto.
Upon the enactment of the Abolition of Fideicommissa and EntailsAct No. 20 of 1972 Harry Halangoda claimed that he had become theabsolute owner of the Trust Fund under Section 5 of the said Act andmade an application to the Public Trustee for the payment to him of asum of Rs. 89,376/40 being the capital and the dividends accruedthereon lying to the credit of the Trust. The Public Trustee refused thesaid application on the basis that Harry Halangoda was not entitled tothe said monies and directed him to file separate proceedings toestablish his claim thereto.
Ultimately Harry Halangoda made this present application seeking adeclaration that he was the absolute owner of the monies lying to thecredit of the Trust Fund by virtue of Section 5 of Act No. 20 of 1972.Harry Halangoda died during the pendency of this application and thepresent Petitioner-Appellant who is his widow was substituted in hisplace as the administratrix of his estate.
The 1 st Respondent is the sister of the testatrix and the 2nd to 8thRespondents are the children of testatrix's brother Victor Delwita.
The learned District Judge by his order held that—
the late Harry Halangoda was under the terms of the Last Willand Trust entitled to a life interest and therefore the provisionsof Section 5 of Act No. 20 of 1972 had no application. Hencehe would not be entitled to the monies in the Trust Fund ;
the 1st Respondent and the 2nd to 8th Respondents wereentitled to the sum of Rs. 89,376/40 and to the dividendsaccruing thereon after 3.7.76, the date of the death of Harry
' Halangoda ;'
Harry Halangoda was entitled only to receive dividends whichhad accrued up to 3.7.76.
It is from this Order that the Petitioner-Appellant has appealed.
Section 5 of the Abolition of Fideicommissa and Entails Act No. 20of 1972 enacts that-
'Where under the terms of any trust, whether created before orafter the commencement of this Act, there is provision for thesuccession to the interest of a beneficiary, whether by way ofremainder or reversion, upon the happening of some future event,whether such event is certain to happen or not, or upon the expiry of«some period of time then, the interest of the beneficiary in whomthe beneficial interest is vested shall be and for all purposes shall bedeemed to be absolute, and no other succeeding beneficiary shallhave any right to succeed thereto by way of remainder or reversionto such interest.
Section 9 of the Act states that- ^
"Nothiqg contained in this Act shall be construed to affect thecreation or the continued validity of any trust, other than a trust ofthe nature referred to in section 5, or of any usufruct or otherpersonal servitude of a like nature which a person may enjoy inproperty belonging to another,"
The question that arises for decision is whether in terms of the Trustcreated by the testatrix, it is one which comes within the provision ofSection 5 of Act No. 20 of 1972 or not. for if it does, then from thedate which that Act came into operation the sum of Rs. 89,376/40and the dividends accrued thereon and lying to the credit of that. TrustFund would devolve on Harry Halangoda but if it does not, he would beentitled only to the dividends up to the date of his death while thedividends that have accrued thereafter and the said Sum of Rs.89.376/40 would devolve on the 1st Respondent who would beentitled to half of that amount while the 2nd to 8th Respondentswould be entitled to the balance half in equa[ shares.
Section 5 of the Act states that-
– "Where under the terms of any trustthere is provision for
the succession to the interest of a beneficiary. . .. upon the
happening of some future event then the interest of the
beneficiary in whom the beneficial interest is vested shall be and forall purposes shall be deemed to be absolute, and no othersucceeding beneficiary shall have any right to succeed'
An examination of the terms of Clause 4 of the Trust created by thetestatrix shows that the beneficial interest that her husband derivedfrom the Trust was only as to the income during his life from hermovable and immovable property and not dominium over suchproperty or the proceeds realised from the sale of such properties,while ultimately if she died without descendants, her sister the 1 stRespondent and the 2nd to»8th Respondents the children of her•brother Victor Deiwita received the whole of the capital and incomerealised by the sale of such properties. Therefore there was nosuccession by the succeeding beneficiaries to the interest of HarryHalangoda in that he had no beneficial interest in the capital sum of theTrust. Therefore.in my view Section 5 of the Act cannot have any'application to the Trust created in this instance and the application ofthe original petitioner and hence of the substituted Petitioner-Appellantmust necessarily fail. I agree with the Order of the Learned DistrictJudge and I affirm it and dismiss this appeal with costs fixed atRs. 315.
T. D. G. DE ALWIS, J – I agree