Yet where created after 15th July 1964, that interest will only be void where it must vest or take effect outside the perpetuity period. It is necessary to ‘wait and see’, if need be for the whole perpetuity period, to determine whether the interest is valid. So future interests are no longer void from the outset due to the possibility that they may vest outside the perpetuity period. Furthermore, the 1964 Act also provided for a 21year perpetuity period for options.
The Act introduced a number of other gift-saving devices, namely:
- presumptions and evidence as to future parenthood;
- rules for the reduction of age contingencies and the exclusion of class members to avoid remoteness;
c) conditions relating to the death of a surviving spouse;
- provisions for the saving and acceleration of expectant interests.
A number of provisions addressed specific problems arising from the common law rule (for example, s.2 on presumptions as to fertility; s. 4 on age reduction and the exclusion of members of a class; and s.5 on conditions relating to the death of a surviving spouse).
Section 4 of the Act provides that where an trust is limited by reference to a person reaching a specified age over 21 years, and it is apparent or becomes apparent that the trust would be void for remoteness, but that it would not be void if the specified age had been 21, then the disposition shall be treated as if it had been limited by reference to the age nearest to that age which would have prevented it from being void.
This was an improvement on s.163 of the Law of Property Act 1925 because it allowed the donor's intention to be more nearly realised. Section 163 was repealed by the Act.
As regards accumulations, the following have ceased to have effect: a) ss.164-166 of the Law of Property Act 1925 (which imposed restrictions on accumulating income, subject to qualifications) and b) s.13 of the Perpetuities and Accumulations Act 1964 (which amended s.164 of the 1925 Act). There are some general restrictions on the scope of the rule; section 13 lists a number of interests to which the rule does not apply including various easements over land.
It is argued that further reform in this area is necessary. The Law Commission recommends that the rule against perpetuities be restricted to interests and rights arising under wills and trusts. It would no longer apply to rights over property such as options, rights of first refusal or future easements. Neither would it apply to commercial property transactions, for which there is little justification.
Where the rule continues to apply, there would be one single perpetuity period of 125 years. The circumstances in which the rule applies should be set out in clear statutory form, removing the current complexities, inconsistencies and anomalies.
The Law Commission’s report gives two examples where the rule against perpetuities prevents landowners making the arrangements that they prefer.
Reform should endeavour to achieve the following: a) to enable parties to deal with land more effectively by allowing reasonable contracts and other arrangements which are not currently possible; b) to allow greater flexibility in dealing with property and drafting trusts; c) to make the law more comprehensible, thereby reducing the scope for errors; and d) reduce legal and other professional costs.
The rule against perpetuities began as a flexible balancing principle yet has become rigid over the centuries because it did not take account of competing interests and evolving policies. Indeed, Gray stated that harsh results flow from the ‘remorseless application’ of the common law. Additionally, Milsom described the complex set of rules as ‘learned confusion’. Gallanis criticised the view in the Law Commission Report that the rule should be merely amended rather than abolished because its balancing of present and future interests in distribution of property is just.
It is concluded that the rule is necessary to strike a balance between the freedom of the present generation and that of future generations to deal as they wish with their property. However, the law as it currently stands is not without flaws and implementation of the above proposals for reform would greatly alleviate such weaknesses.
BIBLIOGRAPHY
Books
‘Gray on Perpetuities’ – J.C Gray; 4th Ed; p629
Textbook on Land Law (10th Edition (Revised)) – Judith-Anne MacKenzie and Mary Phillips; pages 326-344
Trusts Law, Text and Materials (4th Edition) - Graham Moffat, Dr Gerry Bean and Professor John Dewar; pages 117; 301-306; 303-304; 345; 854-855; 906
Land Law (5th Edition (Revised)) – Margaret Wilkie, Peter Luxton and Rosalind Malcolm; Oxford University Press; page 254
‘The Modern Law of Perpetuities’ - RH Maudsley; 1979; pages 219 – 221
The Rule Against Perpetuities – JHC Morris and WB Leach; 1964; pages 12-13
Articles
'The rule against Perpetuities' - Jeffrey Goldsworthy; Trusts & Trustees Journal; Volume 2
‘The Rule Against Perpetuities and the Law Commission’s Flawed Philosophy’ – Thomas P. Gallanis; C.L.J. 2000, 59(2); Cambridge Law Journal, Volume 59; Part 2; pages 284-293
Ruth Deech – Lives in Being Revived (1981) 97 LQR 593, 594
Cases
Re Dawson (1888) 39 Ch.D. 155
Viner v Francis (1789) 2 Cox 190; 2 Bro. C.C. 658
Internet sources
DCA (Department for Constitutional Affairs) website - Civil Law Reform: http://www.dca.gov.uk/deprep9902/repchap2.htm - civlaw
Introduced by section 3(1) of the 1964 Act
Law Commission Report 251; page 80; 7.8 and page 81; 7.11
The Duke of Norfolk’s Case (1681)
see ‘The Rule Against Perpetuities’ - Morris & Leach; pages 12-13
‘Gray on Perpetuities’ - John Gray; 1942, page 629
S.F.C Milsom – Historical Foundations of the Common Law (2nd Ed, 1981), p232.
Law Commission Report 251