Marley et Al v Mutual Security Merchant Bank & Trust Company Ltd

• Jurisdiction: Jamaica
• Judge: Rowe, P.,Downer, J.A.
• Judgment Date: 26 April 1989
• Neutral Citation: JM 1989 CA 80
• Docket Number: Civil Appeal No. 2 of 1989
• Court: Court of Appeal (Jamaica)
• Date: 26 April 1989

Court of Appeal

Rowe, P.; Forte, J.A.; Downer, J.A.

Civil Appeal No. 2 of 1989

Marley et al

and

Mutual Security Merchant Bank & Trust Co. Ltd.

Appearances:

W.B. Frankson, Q.C. and Dr. Bernard Marshall instructed by B.E. Frankson and Co. for 1 ^st and 2 ^nd appellants

Colin Henry for 3 ^rd appellant

Winston Spaulding, Q.C. and Colin Henry for 4 ^th and 5 ^th appellants

Michael Hylton and Garth Patterson instructed by Myers Fletcher and Gordon, Manton and Hart for 6 ^th appellant

Dennis Morrison and Miss Pauline Findlay instructed by Dun, Cox and Orrett for 7 ^th, 8 ^th, 9 ^th, 10 ^th and 11 ^th appellants

Sylvester Morris for 12 ^th appellant

R.N.A. Henriques, Q.C. instructed by Douglas Brandon of Livingston, Alexander and Levy for respondents

Administration of estates - Intestacy — Letters of Administration — Assets — Whether personal representatives had duty to sell copyrights, royalties and benefits of unsold agreements — Order in the affirmative — Conditional contract approved and confirmed — Appeal by beneficiaries — Stay of execution — Whether respondents had absolute right to sell or whether must consult with beneficiaries and obtain consent — Nine beneficiaries being minors — Whether respondents able to sell without first redeeming widow's life interest — Valuation of estate — Advertising — Terms and conditions of agreement — Fiduciary relationship — Best interest of beneficiaries — Assets susceptible to waste. Contract varied — Appeal dismissed.

Administration of estates - Trusts and trustees — Intestates' Estates and Property Charges Act, s. 7. Value of life interest of widow — Section 4(1)(b) — Subject to rights of surviving spouse, residuary estate to be held on statutory trust — Settled Land Act — Where trustees purport to exercise any power of sale in respect of land settled upon the widow, consent of widow is expressly required — Trustee Act — Section 13(1) — Power of sale vested in trustee.

Rowe, P.

1 Letter of administration of estate of the Hon. Robert Nestor Marley, O.M. deceased, was granted to respondents, Rita Marley and George Desnoes on December 17 ^th, 1981. By order of the Court. Rita Marley ceased to be an administrator on February 3 ^rd, 1987 and George Desnoes retired as an administrator on November 9 ^th, 1987. The respondents wished to know how to proceed and so they applied to the Court for directions. Morgan, J. answered questions raised by the administrators in an originating summons in Suit No. 575/87 as under:

“Q.3: Whether it is the duty of the personal representatives to sell the said copyrights and royalties and the benefits of the agreements unsold;

A. It is the duty of the personal representatives to sell the said copyrights, royalties and benefits of agreements unsold;

Q 4: Whether if so, the personal representative might in their discretion be authorised to retain the copyrights and the benefits of the agreement unsold;

A. The personal representative are hereby authorised to retain the copyrights, contracts and benefits of the agreement until further ordered by the Court.

Q6: What is the fair capital value of the life interest of the widow, Rita Marley, for the purpose or redemption under the provisions of section 7 of the Intestates' Estates and Property Charges Act.

A. The question raised at paragraph 6 of the originating summons be and is hereby deferred for further affidavits.”

2 Pursuant to the Order of Morgan, J. that the personal representative had a duty to sell the copyrights, royalties and benefits of the unsold agreements, the respondents in late 1987 in conjunction with Mr. J. Reid-Bingham, Ancillary Administrator of the estate appointed by the Courts of New York and Florida in the United States to America to administer the estate in those jurisdiction, commenced efforts to procure offers for the purchase and sale of the said assets.

3 The respondents allege that they lost no time in making it known to the industry in general that offers would be entertained to purchase the total assets of the estate. Serious offers were received from Almo/Irving Music Corp. and Music Sales Ltd. both of which all considered financially capable to complete, if their offers were accepted, declined to make an offer that included the estate's Jamaican assets or the income steam from the Island Records Recording Royalties. Mr. George Louis Byles, Managing Director of the respondent company, swore in his affidavit of July 8 ^th, 1988 that “Many other expressions of interest were received from a wide cross-section of the industry in and outside of the United States of America but the only three who pursued their enquiries and could demonstrate financial ability to purchase the assets were the above three companies.”

4 Negotiations between the respondent and the Island Entertainment Group Inc. culminated in the signing of a conditional contract for sale on April 27 ^th, 1988. Application was made to the Court by the respondents seeking an Order for the approval of the conditional contract in the following terms:

“That a conditional contract dated the 27 ^th April, 1988 and entered between the plaintiff of the one part and the Island Logics Inc. of 14 East 4^th Street, New York in the United States of America of the other part for the sale to the said island Logics Inc. of assets specified in the schedule hereto at the price at U.S.$8,619,400.00 and J$3000,000.00 to be confirmed with certain modifications (if any) as the Court shall think fit and the said parties shall agree, and that the plaintiff shall be at liberty to carry the same into effect.”

Schedule
Assets	Price
(i) Estate Song Catalogue	US $5,200,000.00
(ii) Record royalties and record distribution rights	US $3,000,000.00
(iii) Equipment	US $ 419,000.00
	US $8,619,000.00

Real Estate:

(a) No. 56 Hope Rd. Kgn. 6 including furnishings therein	J. $1,600,000.00
(b) No. 222 Marcus Garvey Drive Kingston 11	J. $3,700,000.00
	J. $5,300,000.00

5 On December 30 ^th, 1988 Wolfe, J. approved and confirmed the said conditional contract and gave liberty to the respondents to carry the same into effect. The twelve appellants who are the sole beneficiaries of the estate have appealed against the order of the Court. Nine of the appellants are minors who have each appeared throughout by a guardian ad litem and represented by an attorney-at-law. One appellant is the widow of he deceased.

6 The trial judge held that the Court has the duty to determine what is the best interest of the beneficiaries and consequently he was not bound to give effect to the unanimous opposition of the beneficiaries to the conditional contract, although they and their legal advisers maintained that the contract was not in their best interests. The approach of the learned trial judge has been attacked in various ways. The appellant contended that the respondents do not have an absolute right to sell the property but must consult with the beneficiaries and obtain their consent before application to the Court of approval of the sale. They say too, that the beneficiaries are entitled to the estate in specie and consequently once the administration, that is to say have paid all the debts, liabilities and administration expenses of the estate, the administrators cannot sell the assets for purposes of distribution without the consent of the beneficiaries.

7 Section 4(1)(b) of the Intestates' Estates and Property Charges Act provide that if an intestate leaves issue, then subject to the rights of the surviving spouse, the residuary estate is to be held on “the statutory trust” for the issue of the intestate. Mr. Frankson submitted that the position ion Jamaica is similar to the position in England since 1925 and he relied upon a passage from Halsbury's Laws of England 4th Ed. Vol. 17 at para. 1191. He submitted at since 1926 personal representatives have, inter alia, all the powers, discretions and duties conferred or imposed by law on trustees holding land on effectual trusts for sale and all powers conferred by statute on trustees for sale. Halsbury's notes that siding land on effectual trusts for sale and all powers conferred by statute on trustees for sale.

“One of those duties would appear to include the obligation of personal obligation of personal representatives, as trustees for the sale of land, to consult the wishes of the beneficiaries and, so far as is consistent with the general interest of the trust, to give effect to the wishes of the beneficiaries or the wishes of the majority, according to the value of their combined interest, in the exercise of their trust and powers. This duty, however, only applies where the trust for sale arises by statute (e.g. on total or partial intestacy…..”)

8 Mr. Frankson relied further on the decisions of the Court in Re Birchall (1880) 16 Ch.D. 81, Re Barbour's Settlement Trusts [1974] 1 All E.R. 1138 and Re Taylor's Application [1972] 2 All E.R. 873. All three cases dealt with application to approve compromises where infant beneficiaries were concerned. In Re Birchall the guardian of an infant opposed a proposed compromise and his counsel also refused to assent. The trail judge ordered that the matter be adjourned into chambers for him to determine whether the compromise was for the benefit of the infant. After inquiry the Court decided that the proposed compromise was for the benefit of the infant. From both orders the infant appealed. The Court of Appeal could find no parallel for the judge's action. Jessel, M.R. in his judgment said that: “The Court can approve of a compromise on behalf of infants but it cannot force one upon them against the opinion of their advisers.”

9 Jessel, M.R. in argument had opined that of the Court saw that a guardian was acting improperly and against the infant's interests in refusing to assent to an arrangement which appeared clearly beneficial to them, steps might be...