Re Cunliffe-Owen. Mountain v Commissioners of Inland Revenue
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE DENNING,LORD JUSTICE ROMER |
| Judgment Date | 12 May 1953 |
| Judgment citation (vLex) | [1953] EWCA Civ J0512-1 |
| Date | 12 May 1953 |
| Court | Court of Appeal |
In The Matter of the Estate of Sir Hugo Cunliffe-Owen, Bart. dec.
and
In The Matter of the Administration of Justice (Miscellaneous Provisions) Act, 1933
[1953] EWCA Civ J0512-1
The Master of the Rolls
(Sir Raymond Evershed)
Lord Justice Denning and
Lord Justice Romer
In The Supreme Court of Judicature
Court of Appeal
MR. J. PENNYCUICK, Q. C., and MR. J. A WC LFE (instructed by Mr. W. Gordon Hill) appeared on behalf of the Appellants.
THE SOLICITOR GENERAL (Sir Manningham-Buller, Q.C) and MR. J.H. STAMP) (instructed by the Solicitor of Inland Revenue) appeared on behalf of the Respondents.
The late Sir Hugo Cunliffe-Owen made his Will on the 22nd November, 1947, which was proved by the present Plaintiffs on the 3rd February, 1948, the testator having died on the 14th December, 1947. The estate was very considerable. The Will made provision in a form which it is not, I think, necessary to read (but which is in what is called common form) for the ascertainment and distribution of residue among certain persons. Since the date of the death, there have, I understand, been some deeds of arrangement entered into which have affected in some degree the exact beneficial interests taken under the Will. For present purposes it is sufficient to state that half the residue went to a stranger in blood absolutely, and the other half was divided between the testator's son, who took three-quarters of it, and his two daughters who took equally the other quarter. Under the provisions of the Legacy Duty Act 1796, but having also regard to the change in the rate of legacy duty brought about by the Finance Act of 1947, the first half of the residue attracted legacy duty at the rate of 20 per cent and the other half at the rate of 2 per cent — subject in each case to the question now before the Court. What I have said will indicate that the amount of duty involved in respect of residue is very considerable. It is, however, the claim of the Plaintiffs in the present action that no legacy duty is payable in respect of residue or, at any rate, in respect of such part of the residue as has been distributed since the 30th July, 1949, or will be distributed in the future. That claim rests upon the provisions of Section 27 of the Finance Act 1949 which had the effect of abolishing legacy duty and succession duty in the cases specified in the Section.
It will, I think, be convenient if I read at once substantially the whole of Section 27. Sub-section (1) is: "Legacy duty and succession duty shall not be chargeable on a legacy derived from a testator or intestate dying after the commencement of this Part of this Act, that is, the 30th July, 1949,"or on a succession conferred after that commencement, nor on any other legacy or succession in so far as the duty would apart from this section be payable in connection with any such event as is mentioned in the next following sub-section". Sub-section (2) says, "The events referred to in the foregoing sub-section are any of the following events happening after", and I will substitute again the date 30th July, 1949, "that is to say (a) the death of any person (b) the determination or failure of any charge, estate, interest or trust; (c) the exercise of a power of appointment; (d) the making of any payment or the application of any property, if the duty would apart from this section be chargeable", and then two specific matters are referred to. One relates to annuities of an uncertain amount and the other to premiums on the renewal of leases which arise under certain provisions of the Succession Duty Act. The sub-section continues, "(e) any other event which, under the provisions of the relevant will or disposition or the rules governing the distribution of the intestate's estate, affects the right to the legacy or succession or to the enjoyment thereof or which changes the nature of the property comprised therein or any part of that property". Sub-section (3) says, "The reference in sub-section (1) of this section to duty being payable in connection with an event shall, in relation to legacy duty, include its being payable when the legacy is paid, delivered, retained, satisfied or discharged in connection with that event, and for the purposes of this section the expression 'legacy' includes residue and share of residue". Sub-section (4) I need not read since it relates exclusively to succession duty, and for the purposes of the present appeal it has been agreed between the Appellant and the Crown that we may confine our attention to the claim for exemption from legacy duty.
Put in a sentence, the claim of the Appellant executors in this case is that they are exempt from the liability to pay legacy duty, as I have already said, in respect of allresidue distributed since the 30th July, 1949, and in respect of that which remains to be distributed henceforth, by virtue of the language of the section I have read and in particular by virtue of the provisions of sub-section 2(b) and (e) thereof. It is said (and this is the main premise upon which the case rests for the Appellant) that pending final administration or pending some interim distribution a residuary legatee has — and I am using Mr. Pennycuick's language — only an expectancy in the eye of the law, that is to say, a right at most to receive in the future whatever may be found available when provision has been made for debts and other obligations or when such debts and other obligations have been satisfied. It is only, say the Appellants, upon the occasion of an actual distribution or, alternatively, when administration is complete, that the interest of the residuary legatee ripens into or becomes a possessory interest. Only then does he become entitled to enjoy (in part or wholly) the subject matter of his legacy. It therefore follows, say they, that when a distribution is made an interest or estate which previously existed in the executors "determines" within the meaning of sub-section 2(b). Alternatively, it is said that on an assent to a partial distribution or upon the final winding up of the estate, an "event" occurs under paragraph (e) which under the provisions of the Will of this testator either affects the right of the residuary legatee to the legacy or to the enjoyment of the legacy or which changes the nature of the property of which the legacy consists. It follows, therefore, say they, that if the determination or the event, as the case may be, occurs after the 30th July, 1949, exemption from legacy duty in respect of what is distributed takes effect by virtue of Section 27. The premise which I have tried to state depends in turn very largely upon certain expressions used in the House of Lords in such cases as the Lord Sudeley case and the Barnardo case, and also upon expressions of the former Master of the Rolls, Sir Wilfrid Greene, in In re Corbett,to which cases I shall have to come back presently. Before I do so I should, however, state that the problem presented must in the end of all turn upon the construction, according to their ordinary sense, of the words which have been used in this particular Section. No one who has attended to the argument presented to this Court will, I imagine, be willing to say that the problem is other than difficult.
The learned Solicitor General, in presenting the case for the Crown, drew attention to the fact that the relevant language which I have already read is not the first similar expression on the part of Parliament. I referred a short time ago to the circumstance that by the Finance Act of 1947 legacy duty was doubled: and section 49 of the Act of 1947, in achieving that process of duplication, used exactly the same language in sub-section (3) as Parliament used again when it sought to put an end to legacy duty in sub-section (2) of Section 27 of the Finance Act 1949. It spoke, that is to say in 1947, of "events" in connection with which legacy duty was payable and it specified the same series of events as is specified in sub-section (2) of the Section now under review. Since both acts relate to the same subject matter, namely, legacy duty, it is, I assume legitimate for the Court in trying to solve the problem of construction to pay regard, if it is of assistance, to the earlier expression of Parliamentary intention. The Solicitor General made the point that if the argument presented in this Court is correct, it would follow (and I think Mr. Pennycuick did not shrink from this result) that the question whether in any particular case legacy duty at double the previous rate would be payable would or might depend upon the exact date when executors chose to assent to a legacy or when they had completed the administration of their estate. It was said that it would be a surprising result, that the amount of duty should depend upon an accidental circumstance of that kind, or if accidental circumstance be not an entirely correct phrase, upon a matter so much in the discretion of the executors in the performance of theiradministrative duties. Still, the question is, what has been said by Parliament and what is the effect of the language they have used? I say no more, therefore, upon the earlier Act than this (and what may be said about that Act equally may be said about this Act) that to my mind, at first sight, it is remarkable that (if the Appellants are right) the incidence of double duty in the one case and exemption in the other should depend upon events of the character which I have mentioned, namely, the decision of executors to make a partial or final distribution on upon their having completed the process of administration which, as everybody knows, may be prolonged for good or other reasons over a great length of time. The problem none the less is, as I have just said, a...
To continue reading
Request your trial
-
Gleeson v Feehan
...AG 1897 AC 11 DOCTOR BARNARDOS HOMES V SPECIAL INCOME TAX COMMISSIONERS 1921 2 AC 1 VANNECK V BENHAM 1917 1 CH 60 CUNLIFFE-OWEN, IN RE 1953 1 CH 545 CUFF KNOX DECEASED, IN RE 1963 IR 263 COMMISSIONER OF STAMP DUTIES (QUEENSLAND) V LIVINGSTON 1965 AC 694 MORTESHED V MORTESHED 1902 36 IL......
- Armstrong DLW GmbH v Winnington Networks Ltd
-
Phillip Bradley Hinds Plantiff v (1) Clive Montrivelle Hinds, Administrator of the Estate of Esther Rosalind Hinds (2) Clive Montrivelle Hinds (3) John Leverette Hinds III (4) Thomas Anthony Hinds (5) Sharon Hinds (6) Norahs Kcotsob Ltd Defendants
...effectuates a testamentary disposition by transferring the subject-matter of the disposition to the persons entitled to it’. 6.14 In Re Cunliffe-Owen [1953] Ch. 545 Evershed MR said at p. 559: ‘…. The question whether an assent has taken place, whether there has been full administration, i......
-
Re Cuff Knox, Deceased
...B. 26, 468; [1921] 2 A. C. 1; 7 T. C. 646. (2) [1920] 1 K. B. 468. (1) [1921] 2 A. C. 1. (2) [1897] A. C. 11. (1) [1897] A. C. 11. (2) [1953] 1 Ch. 545. (3) [1921] 2 A. C. 1; 7 T. C. 646. (1) [1921] 2 A. C. 1; 7 T. C. 646 (1) [1937] I. R. 179. (2) [1899] 2 Ch. 474. (1) [1937] I. R. 179. (2)......