For the second time in as many weeks we have a reported decision on the meaning of “child” in relation to Wills and Trusts. In Marcus v Marcus it was held that the Defendant was a child of the deceased for the purposes of a Trust, despite the court also finding that, biologically and legally speaking, the Defendant was not a child of the settlor of the Trust.
The Facts
In 1973 Stuart Marcus married Patricia. Stuart was already well on his way to becoming a successful entrepreneur by this time, and he would continue to be a very successful businessperson, specialising in children’s toys.
Stuart and Patricia had two children; Edward, who was born in 1978, and Jonathan, who was born in 1981.
In November 2003 Stuart settled a Trust (“the Trust”), a so called “Son of a Melville” scheme, designed to postpone, legitimately, payments of CGT. Insofar was as relevant to the claim, the beneficiaries of the Trust included “the children and remoter issue of the Settlor….”.
Stuart passed away in 2020. By the time the matter came to trial the assets in the Trust were reportedly worth around £14.5m.
Here comes the twist……
In 2010, entirely unbeknownst to Stuart it seems, Patricia told Edward that Stuart was not his biological father. Instead, he was a partner from a law firm in Norwich.
Naturally enough with cases involving families and money that make it as far as a trial, Edward and Jonathan had a huge fallout in time, with Patricia giving evidence on Jonathan’s behalf and firmly taking his side it seems.
The primary question for the court to resolve became, is Edward to be considered a child of Stuart and therefore within the class of beneficiaries in the Trust?
The Trial
The court heard expert evidence on the issue of DNA testing, based on samples given by Edward, Jonathan and Patricia, but not from Stuart.
The expert’s report was caveated heavily – DNA sampling from siblings being less reliable than sampling from parents they said – but nonetheless the report concluded Edward and Jonathan were only half siblings, and not full siblings. It added that “it is 25 times more likely that [Jonathan] and [Edward] are related as half siblings than if they are related as full siblings”
Unsurprisingly, despite some challenges to the weight of this evidence from Edward’s legal team owing to technical shortcomings in the report, the court had little hesitation in accepting the evidence.
Patricia’s evidence on the point was detailed and the court seems to have little evidence accepting it. In a further twist, Edward sought to assert that Jonathan might also not be Stuart’s son (!) and that he too may have been a son of the same Norwich based solicitor. The purpose here presumably was to ensure that if Edward lost, he intended to take Jonathan down with him. Patricia’s evidence on her continued contact with this solicitor after their “one night” together was found to be inconsistent in various ways. But, the court stopped short of making findings in this respect.
The court having found that Stuart was not Edward’s biological father, the question then became whether Edward was a “child” of Stuart’s for the purposes of the Trust.
The court undertook an analysis of the law, authorities and commentary on questions of construction in this context. Put as succinctly as possible, the starting point is;
“….. the court is concerned to identify the intention of the [settlor] by reference to what a reasonable person, having all the background knowledge which would have been available to the parties, would have understood them to be using the language in the [Trust] to mean.
The court’s task is to ascertain the objective meaning of the language….This is not a literalist exercise; the court must consider the [Trust] as a whole and, depending on the nature, formality, and quality of drafting of the [Trust] give more or less weight to elements of the wider context in reaching its view as to that objective meaning.”
In other words, the court needs to find subjective intention, but by applying an objective test. Not always an easy path to tread.
Applying this test, the judgment records;
“The reasonable person who is undertaking this exercise knows about the family context and the purposes of creating the Settlement. It is known that Stuart was unlikely to have any further children. He had created a successful business that he had founded. He had a family with two sons who had reached their early twenties. There was no reason why Stuart should have wanted to have treated differently or to have benefitted any child or children other than Edward and Jonathan.”
I consider that the surrounding circumstances point overwhelmingly in favour of a wider meaning than biological child being adopted. A reasonable person in knowledge of the relevant facts would readily conclude that when using “children” Stuart intended this word to be understood as meaning Edward and Jonathan; and not “Edward and Jonathan provided they are in fact my biological sons.”
Thoughts
Normally these articles end with a warning to “take legal advice” and/or to ensure you instruct a “specialist” in the field required. Stuart had done just that, and yet this matter still reached a, no doubt expensive, 3-day trial.
Perhaps the takeaway instead could be paraphrased from the lips of Forest Gump; litigation, much as with life, is like a box of chocolates; you never know what you’re gonna get.
