Ballenden v Bryant

The Facts 1The testator (John St Clair Ballenden) died on 10 February 2010, leaving an estate whose value was only modest but which was erroneously assumed to be considerable. He also left a trail of dependants and disappointed former wives who claim that no adequate provision was made for them. I was told that seven separate family provision claims have been made on his estate pursuant to the Succession Act 2006. After the testator's death the existence of certain trust deeds emerged which falsified the assumption that the value of the estate was considerable. The testator was the trustee pursuant to the trust deeds. His sons, the first and second plaintiffs, were the beneficiaries. 2The effect of the trust deeds is that, other than the bare legal title, the C and D class shares in the testator's former family company (the third plaintiff) never formed part of his estate and were at all material times beneficially owned by the first and second plaintiffs. Although the two trusts vested when each boy turned 25 years, which occurred in 1986 and 1988 respectively, the boys were unaware of their entitlement and the shares were not transferred to them during the testator's lifetime. The value of the C and D class shares is in excess of $8 million. The value of the estate without those shares is approximately $2 million. 3The disputation in relation to the C and D class shares which has led to the commencement of these proceedings was complicated by the testator's secrecy. When the existence of the trusts was ascertained, the plaintiffs' solicitor insisted over a year ago that the C and D class shares were not part of the testator's estate and should be transferred to the first and second plaintiffs. In his letter dated 17 November 2011, he wrote: 13 It follows then that the C and D class shares should not have been declared as assets in the estate of Dr Ballenden. The bare legal title in those shares had a nil value. 14 In your capacity as co-trustee (along with Gordan Bryant) of the trustee for the C and D class shares Dr Ballenden, you should transfer the bare legal title to the C class share to [the first plaintiff] and the bare legal title to the D class share to [the second plaintiff] forthwith without deduction. 15 You as executors of the estate of the late Dr Ballenden have no lawful right to withhold the transmission of the C and D class shares to [the first and second plaintiffs] as these classes of shares do not form part of the estate. (emphasis added) 4The plaintiffs' solicitor was indubitably correct and the executors were unwittingly in error in relation to the way the shares were initially treated. They did not form part of the testator's estate and their value should not have been included in the inventory of assets. To the executors' credit however, following the 17 November letter, they promptly arranged for the first and second plaintiffs to be registered as the holders of the shares. This occurred on 21 November 2011. 5The plaintiffs' contended that the executors had no valid title to the C and D class shares because the shares did not form part of the testator's estate, and therefore the executors could not confer title on the first and second plaintiffs without following one or other of the two legal routes which I have explained in paragraph [7] below. The executors are unwilling to do what the plaintiffs' solicitor insists upon. They consider it to be unnecessary. Thus, nine months after the first and second plaintiffs became the registered holders of the shares, they commenced these proceedings. One of their objects in doing so, but not their sole object, was said to be "to perfect the title" of the first and second plaintiffs to the C and D class shares.