Vandervell V IRC
NOTES OF CASES
THECASEOF THE SLIPPERY
EQUITY
IN Re Vandervell’s Trusts (No. 2),’ Lord Denning M.R. said:
“ (‘ Hard cases make bad law ’) is a maxim which is quite misleading. It should be deleted from our vocabulary. It comes to this: ‘Unjust decisions make good law’: whereas they do nothing of the kind. Every unjust decision is a reproach to the law or to the judge who administers it.”a
Now that it has been decided that there is to be no appeal from the decision of the Court of Appeal, it is worth asking what law, good or bad, the decision has made.
The late Mr. Vandervell wished to supply the Royal College of
Surgeons with funds for the founding of a chair in pharmacology.
In 1958, he directed his bank to transfer to the College certain shares in Vandervell Products Ltd., which the bank held as his nominee.
As part of the arrangement, the College granted an option over the shares to Vandervell Trustees Ltd. (“ the trustee company ”), which was a private company formed to act as trustee in connection with other benevolent schemes of Mr. Vandervell; its members were all professional advisers of Mr. Vandervell.
Between 1958 and 1961, Mr. Vandervell caused Vandervell Products Ltd., which he controlled, to declare dividends on the College’s shares. In 1961, the trustee company exercised the option and the
College transferred the shares to it. In accordance with the terms of the option, the company paid E5,oOO upon its exercise to the College.
This money was taken from funds which the trustee company held on the trusts of a settlement in favour of Mr. Vandervell’s children.
Further dividends were declared on the shares between 1961 and
1965, and these were paid by the trustee company into the children’s settlernent funds.
Meanwhile, the Revenue claimed that Mr. Vandervell had not divested himself of all interest in the shares in 1958, so that he was liable for surtax on the dividends paid to the College. When this issue was decided against him at first instance, Mr.
THECASEOF THE SLIPPERY
EQUITY
IN Re Vandervell’s Trusts (No. 2),’ Lord Denning M.R. said:
“ (‘ Hard cases make bad law ’) is a maxim which is quite misleading. It should be deleted from our vocabulary. It comes to this: ‘Unjust decisions make good law’: whereas they do nothing of the kind. Every unjust decision is a reproach to the law or to the judge who administers it.”a
Now that it has been decided that there is to be no appeal from the decision of the Court of Appeal, it is worth asking what law, good or bad, the decision has made.
The late Mr. Vandervell wished to supply the Royal College of
Surgeons with funds for the founding of a chair in pharmacology.
In 1958, he directed his bank to transfer to the College certain shares in Vandervell Products Ltd., which the bank held as his nominee.
As part of the arrangement, the College granted an option over the shares to Vandervell Trustees Ltd. (“ the trustee company ”), which was a private company formed to act as trustee in connection with other benevolent schemes of Mr. Vandervell; its members were all professional advisers of Mr. Vandervell.
Between 1958 and 1961, Mr. Vandervell caused Vandervell Products Ltd., which he controlled, to declare dividends on the College’s shares. In 1961, the trustee company exercised the option and the
College transferred the shares to it. In accordance with the terms of the option, the company paid E5,oOO upon its exercise to the College.
This money was taken from funds which the trustee company held on the trusts of a settlement in favour of Mr. Vandervell’s children.
Further dividends were declared on the shares between 1961 and
1965, and these were paid by the trustee company into the children’s settlernent funds.
Meanwhile, the Revenue claimed that Mr. Vandervell had not divested himself of all interest in the shares in 1958, so that he was liable for surtax on the dividends paid to the College. When this issue was decided against him at first instance, Mr.