Berkeley v Berkeley
| Jurisdiction | England & Wales |
| Judge | Viscount Simon,Lord Thankerton,Lord Porter,Lord Simonds,Lord Uthwatt |
| Judgment Date | 21 June 1946 |
| Judgment citation (vLex) | [1946] UKHL J0621-1 |
| Court | House of Lords |
[1946] UKHL J0621-1
House of Lords
Viscount Simon
Lord Thankerton
Lord Porter
Lord Simonds
Lord Uthwatt
After hearing Counsel, as well on Tuesday the 2d, as on Thursday the 4th, Friday the 5th, Monday the 8th, Tuesday the 9th and Wednesday the 10th, days of April last, upon the Petition and Appeal of Mary Emlen Countess of Berkeley, Widow, of Berkeley Castle, in the County of Gloucester, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 13th of December 1944, so far as regards the words "And this Court doth Order that so much of the said Order dated the 19th May 1943 as declares that Section 25 of the Finance Act 1941 does not apply to the annuities given by the Will and Codicils of the above-named Testator to the Defendant Lady Berkeley the Defendant Miss Jackson and the Plaintiff respectively be discharged", as also the words "And this Court doth declare, that the said Section applies to the annuities given by the said Will and Codicils to Lady Berkeley Miss Jackson and the Plaintiff respectively" and also the words "And this Court doth declare that for the purposes of the, said section the stated amount of the payment to be made in every year to Lady Berkeley under the, provision contained in the Second Codicil to the Will of the said Testator is the amount by which the aggregate net income to be received by her in that year in respect of:—( a) the annual sum of One thousand two hundred pounds appointed to her by Clause 2 of the said Will ( b) the annual sum of Two hundred pounds bequeathed to her by Clause 24 ( a) of the said Will ( c) the annual income of the Trust Fund constituted by the Settlement dated the 6th November 1924 made on her marriage with the above-named Testator and payable to her under the provisions of Clause 3 thereof and ( d) the annual sum payable to her by virtue of the covenant contained in Clause 5 of the said Settlement shall fall short of Five thousand pounds", might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order, so far as aforesaid, might be reversed, varied or altered, or that the Petitioner might have such other relief in the premises as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the Petition and Cross Appeal of Robert George Wilmot Berkeley and Robert John Grantley Berkeley, an Infant, both of Spetchley Park, Spetchley, in the County of Worcester, praying, That the matter of the Order set forth in the Schedule thereto, namely, the said Order of His Majesty's Court of Appeal, of the 13th of December 1944, so far as therein stated to be appealed against, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order, so far as aforesaid, might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of the said Robert George Wilmot Berkeley and Robert John Grantley Berkeley (Infant); as also upon the printed Case of Sybil Deane Jackson (Spinster); and also upon the printed Case of the said Mary Emlen Countess of Berkeley (Widow) lodged in the said Original and Cross Appeals (in which said Appeals Arthur Cary Hampton Borrer, an executor and trustee of the will and codicils of the testator, called as Respondent in the said Original and Cross Appeals, was stated in the said Case of Sybil Deane Jackson to be desirous of retaining an impartial attitude in the said Appeals, and did not lodge a separate printed Case in answer thereto); and due consideration had this day of what was offered on either side in these Appeals:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled, That the said Order of His Majesty's Court of Appeal, of the 13th day of December 1944, so far as stated to be appealed against in the said Original Appeal, be, and the same is hereby, Discharged, and that the Order of the Honourable Mr. Justice Cohen of the 19th day of May 1943, thereby in part discharged, be, and the same is hereby, Restored: And it is further Ordered, That the said Cross Appeal, be, and the same is hereby, dismissed this House: And it is further Ordered, That the Costs of all parties incurred by them in respect of the said Original and Cross Appeals to this House be paid out of the estate, such Costs to be taxed as between Solicitor and Client and the amount thereof to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Chancery Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.
My Lords,
This is an Appeal and Cross-Appeal from a unanimous decision of the Court of Appeal composed of Lord Greene, M.R., Finlay and Morton, L.JJ. The question to be decided was raised by Originating Summons and concerns the applicability of Section 25 of the Finance Act 1941 to the first clause of the Second Codicil to the Will of the late Earl of Berkeley.
The first sub-section of Section 25 of the Finance Act 1941 is as follows:
"Subject to the provisions of this section, any provision however worded for the payment whether periodically or otherwise, of a stated amount free of income tax or free of income tax other than surtax being a provision which:
( a) is contained in any deed or other instrument, in any Will or Codicil, in any order of any court, in any local 01 personal Act, or in any contract, whether oral or in writing: and
( b) was made before the third day of September nineteen hundred and thirty-nine: and
( c) has not been varied on or after that date
shall as respects payments falling to be made during any year of assessment, the standard rate of income tax for which is ten shillings in the pound, have effect as if for the stated amount there were substituted an amount equal to twenty twenty-ninths thereof."
The effect of substituting twenty twenty-ninths for the whole of the stated amount is the same as if the stated amount were paid free of income tax at 5s. 6d. in the pound and no more, while the balance is left to be borne by the recipient.
The Earl of Berkeley died on January 15th 1942. His last Will was made on November 10th 1936, and to this Will four Codicils were subsequently made dated respectively September 14th 1938, December 3rd 1938, March 9th 1940, and September 14th 1940. The relevant portions of these testamentary dispositions are as follows:—
The Will of November 10th 1936 contained in Clause 2 an appointment to the Testator's Wife, if she should be living at his death, of an annual sum of £1,200 for the then residue of her life, and in Clause 24 a further annuity commencing at the expiration of 3 months from the Testator's death, of £200 free of income tax if and so long as she accepted (as she did) the office of Executor and Trustee of the Will. In Clause 23 the Testator gave to his stepdaughter, Miss Jackson, an annuity of £1,500 free of income tax at the standard rate. The Will also contained the gift of annuities to other persons.
Clause I of the Second Codicil dated December 3rd 1938 is as follows:—
"I give to my Wife Mary Emlen Countess of Berkeley during her life an annuity of such amount as may in any or every year after my death be required to make up to the total sum of Five thousand pounds clear of all death duties and income tax the annual net income to be received by her in that year under my said Will (including the appointment made by Clause 2 thereof) and under my Marriage Settlement (which I hereby confirm) dated the sixth day of November One thousand nine hundred and twenty four … etc.
Clause 4 of the Fourth Codicil dated September 14th 1940 was as follows:—
"I declare that every annuity by my said Will or any Codicil thereto bequeathed to my Wife … shall be payable in priority to all other annuities or pecuniary legacies by my said Will or by any Codicil thereto bequeathed and that the annuity by my said Will bequeathed to my stepdaughter Sybil Deane Jackson shall be payable in priority to all such other annuities or pecuniary legacies as last aforesaid except the annuity or annuities bequeathed to my said Wife (which shall have absolute priority).
And I charge first the settled estates and secondly the heirlooms (and in that order) with the payment of the annuities hereby or by any Codicil hereto bequeathed and the duty on such of them as are bequeathed free of duty so far as my residuary estate shall be insufficient for the purpose."
The Third and Fourth Codicils confirmed in all other respects the Will and former Codicils thereto.
In support of the contention that Section 25 has no application to this case Mr. Gray, on behalf of the Appellant the Countess of Berkeley, the Testator's Widow, advances four propositions:—
( a) He first contends that a "provision" contained in a Will or Codicil, within the meaning of Section 25, is not "made" until the moment of the Testator's death.
( b) If this contention fails, he contends as an alternative that the "provision" made in the Second Codicil must be treated as made at the date of the Fourth and last Codicil because this last named Codicil confirms the previous testamentary dispositions including the Second Codicil.
If either of these contentions prevails, the "provision" for the payment to be made annually to the Countess free of income tax would be made after September 3rd 1939 and would therefore be untouched by Section 25.
( c...
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