Re Osoba [1978]
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Re Osoba [1978] EWCA Civ 3 is an English trusts law concerning the construction of a trust to benefit people, rather than a purpose.
Mr Patrick Osoba devised property to his wife, specifying in his will that it was intended "for her maintenance and for the training of my daughter, Abiola, up to university grade and for the maintenance of my aged mother". The validity of the trust was brought into question by a son from another marriage, arguing that it might be considered invalid, as it appeared to be for a purpose rather than benefiting specific individuals.
Upon reaching the Court of Appeal, Goff LJ upheld the decision made in the High Court by Megarry VC. The central point of agreement was that the property was given to the daughter on trust absolutely, with no residual interest returning to the testator’s estate.
Buckley LJ, concurring with the decision, underscored a crucial principle. He emphasised that when a testator bestows the entire fund upon a beneficiary, either directly or through a trustee, the clear intention is to benefit that individual to the fullest extent of the subject matter. Even if the testator articulates a specific purpose for the gift, such a reference is seen as a mere statement of motive. Any other interpretation, Buckley LJ noted, would undermine the expressed intention that the complete subject matter should be utilised for the beneficiary’s benefit. This principle gains particular significance when dealing with the testator’s residue, where a failure of the gift would result in intestacy.
In essence, the Re Osoba case reaffirms the importance of discerning the testator's true intention to benefit individuals and not thwarting that intention by rigidly interpreting stated purposes as restrictive conditions. The court's interpretation sought to harmonise the specified purpose with the overarching aim of benefiting the designated individuals and avoiding intestacy, especially when dealing with the residue of the estate.
Mr Patrick Osoba devised property to his wife, specifying in his will that it was intended "for her maintenance and for the training of my daughter, Abiola, up to university grade and for the maintenance of my aged mother". The validity of the trust was brought into question by a son from another marriage, arguing that it might be considered invalid, as it appeared to be for a purpose rather than benefiting specific individuals.
Upon reaching the Court of Appeal, Goff LJ upheld the decision made in the High Court by Megarry VC. The central point of agreement was that the property was given to the daughter on trust absolutely, with no residual interest returning to the testator’s estate.
Buckley LJ, concurring with the decision, underscored a crucial principle. He emphasised that when a testator bestows the entire fund upon a beneficiary, either directly or through a trustee, the clear intention is to benefit that individual to the fullest extent of the subject matter. Even if the testator articulates a specific purpose for the gift, such a reference is seen as a mere statement of motive. Any other interpretation, Buckley LJ noted, would undermine the expressed intention that the complete subject matter should be utilised for the beneficiary’s benefit. This principle gains particular significance when dealing with the testator’s residue, where a failure of the gift would result in intestacy.
In essence, the Re Osoba case reaffirms the importance of discerning the testator's true intention to benefit individuals and not thwarting that intention by rigidly interpreting stated purposes as restrictive conditions. The court's interpretation sought to harmonise the specified purpose with the overarching aim of benefiting the designated individuals and avoiding intestacy, especially when dealing with the residue of the estate.
