Re Goetze. National Provincial Bank Ltd v Mond
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SOMERVELL |
| Judgment Date | 15 December 1952 |
| Judgment citation (vLex) | [1952] EWCA Civ J1215-1 |
| Court | Court of Appeal |
| Date | 15 December 1952 |
[1952] EWCA Civ J1215-1
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
LORD JUSTICE SOMERVELL
LORD JUSTICE DENNING and
LORD JUSTICE ROMER
re Goetze deceased
MR. J. A. WOLFE (instructed by Messrs. Jacobson, Ridley & Co) appeared on behalf of the Appellant (First Defendant).
MR. LIONEL EDWARDS, Q.C. (instructed by Messrs. Jacobson, Ridley & Co) appeared on behalf of the Respondent (Second Defendant).
MR. F. B. MARSH (instructed by Messrs. Jacobson, Ridley & Co) appeared on behalf of the Respondents (plaintiffs).
I will ask Lord Justice Jenkins to read his own Judgment and then the Judgment of Lord Justice Romer.
LORD JUSTICE JENKINS: This is an appeal from an Order made by Mr. Justice Upjohn on the 14th May, 1952, concerning theincidence as between the pecuniary legatees and annuitants under the Will of the Testatrix, Constance Gostse (represented by the Appellant Elisabeth Mond) and the residuary estate of the Testatrix (to which the Respondent. Countess Cippico is solely entitled under such Will) of the United Kingdom Estate Duty and Canadian Succession Duty attributable to the personal estate of the Testatrix situated in the Dominion of Canada. The learned Judge declared that the United Kingdom Eatate Duty so attributable and the interest thereon ought to be borne by the residuary estate of the Testatrix, and that declaration is not appealed from by the Respondent residuary legatee. But he also declared that the Canadian Succession Duty so attributable ought to be borne by the legatees or annuitants concerned, and that the credit of the amount of such Canadian Succession Duty allowed against the United Kingdom Estate Duty under the Double Taxation Relief (Estate Duty) (Canada) Order 1946 enured for the benefit of the residuary estate of the Testatrix; and from this part of the learned Judge's Order the Appellant, as representative of all the pecuniary legatees and annuitants, now appeals to this Court.
The Testatrix died domiciled in England on the 12th February, 1951. By her Will dated the 2nd March, 1949, and (with one Codicil thereto not material for the present purpose) proved on the 4th April, 1951, the Testatrix appointed the Respondents, National Provincial Bank Ltd., Hyman Stone, and Countess Cippico to be executors and trustees thereof and (so far as relevant to the present appeal) made the following dispositions:-
By Clause 2 she declared that "all legacies and annuities bequeathed by this my Will or any Codicil thereto are to be paid free of legacy duty and all other death duties"
By Clause 3 she declared that "In case any Death Duties shall become payable on my death in respect of the money or property comprised in any gifts made or covenants entered into by me in my lifetime such Death Duties (and anyduty thereon payable by reason of the previsions of this Clause) shall be paid by my Trustees out of my Estate in exoneration of any other person accountable for such duty", and further, "that all payments made hereunder shall be deemed to be testamentary expenses of my Estate".
By Clauses 8 to 47, inclusive, the Testatrix bequeathed forty three pecuniary legacies and annuities to persons who with two exceptions all survived the Testatrix including (by Clause 9) a legacy of £1,000 to the Appellant.
By Clause 50 the Testatrix devised and bequeathed to her Trustees her residuary real and personal estate upon usual trusts for sale and conversion, and directed as follows: "And my Trustees shall out of the moneys to arise from the sale calling in and conversion of or forming part of my residuary estate and out of my ready money pay my funeral and testamentary expenses (including all payments to be deemed testamentary expenses under the provisions of this my Will) and debts and shall pay or provide for all legacies and annuities bequeathed by this my Will or any Codicil hereto and the duty on all such legacies and annuities And subject as aforesaid my Trustees shall hold the residue of my estate in Trust for" the Respondent Countess Cippico.
The net value of the Testatrix's estate, for the purposes of United Kingdom Estate Duty, was £431,501. 4s. 3d and, in addition to other assets all of which were situated in England, it comprised 26,150 Preferred and 10,976 Common Shares in the International Nickel Company of Canada Limited, valued for duty purposes at £230,243. 15a. 1d, which were situated in Canada. As the Testatrix was domiciled in England these shares, notwithstanding their Canadian situation, attracted United Kingdom Estate Duty on her death, and accordingly fell to be included in the above-mentioned total net estate of £431,501, 4s. 3d upon which United Kingdom Estate Duty at the appropriate rate (vis 65%) amounting to £280,425. 13s. 2d was assessed. But notwithstanding the Testatrix's Englishdomicil the last-mentioned shares (which I will call "the Canadian estate") also attracted, by reason of their Canadian situation, the Succession Duty exigible under the law of Canada upon the beneficial interests in the Canadian estate created by her Will. In these circumstances, the Double Taxation Relief (Estate Duty) (Canada) Order 1946 (which I will call the "Double Taxation Order") applied to the case. The Double Taxation Order is an Order in Council made under Section 54 of the Finance (No. 2) Act 1945, sub-section (1) of which section provides as follows: "(1) If His Majesty by Order in Council declares that arrangements specified in the Order have been made with the Government of any territory outside the United Kingdom with a view to affording relief from double taxation in relation to estate duty payable under the laws of the United Kingdom and any duty of a similar character imposed under the laws of that territory, and that it is expedient that those arrangements should have effect, the arrangements shall, notwithstanding anything in any enactment have effect so far as they provide for relief from estate duty, or for determining the place where any property is to be treated as being situated for the purposes of estate duty". After declaring (by Clause 2) "(a) that the arrangements specified in the Agreement set out in the Schedule to this Order have been made with the Government of Canada with a view to affording relief from double taxation in relation to estate duty payable under the laws of the United Kingdom and duty of a similar character imposed under the laws of Canada; (b) that it is expedient that those arrangements should have effect", the Double Taxation Order sets out in the Schedule thereto the agreement between the two Governments, which includes the following provisions: "Article 1, Sub-paragraph (1). The duties which are the subject of the present agreement are (a) In the United Kingdom, the estate duty imposed in Great Britain, and (b) In Canada, the succession duty impoted by Canada. (2) The present Agreement shall also apply to any other duties ofa substantially similar character Imposed by either Contracting Government subsequent to the date of signature of the present Agreement". Then Article 4, sub-paragraph 1: "In determining the amount on which duty is to be computed, permitted deductions shall be allowed in accordance with the law in force in the territory in which the duty is imposed. (2) A Where duty is imposed by one Contracting Government on the death of a person who was not domiciled at the time of his death in any part of the territory of that Contracting Government, no account shall be taken, in determining the amount or rate of the duty so imposed, of property situated outside the former territory". Then Article 5 (1): "Where one Contracting Government imposes duty by reason of a deceased person being domiciled in some part of its territory at the time of his death, that Contracting Government shall allow against so much of its duty (as otherwise computed) as is attributable to property situated in the territory of the other Contracting Government a credit (not exceeding the amount of the duty so attributable) equal to so much of the duty imposed in the territory of the other Contracting Government as is attributable to such property…….(4) For the purposes of this Article, the amount of the duty of a Contracting Government attributable to any property shall be ascertained after taking into account any credit, allowance or relief, or any remission or reduction of duty, otherwise than in respect of duty payable in the territory of the other Contracting Government".
From the affidavit of a Canadian lawyer filed in the present proceedings, it appears: (1) That Canadian Succession Duty is assessed and chargeable on all successions on death to Canadian property. (2) That for this purpose (so far as now material) "succession" means every disposition of property whereby any person becomes entitled to any property or the income thereof upon the death of any person. (3) That where the deceased was at the time of his death domiciled outsideCanada the duty is exigible upon or in respect of the succession to all property situated in Canada. (4) That the duty in respect of any succession under the Will of a Testator is assessed at rates varying with the aggregate net value of the Canadian property passing on the death, and the relationship of the successor to the Testator, and that there are certain exemptions one of which frees successions less than$1,000 from the duty. (5) That the successor is liable for the duty assessed in respect of any succession under the Will of a Testator but that such duty is nevertheless payable by and recoverable from the Executors to the extent of the property administered by them, with a right for executors who are required to pay the duty to deduct it in paying over the amount of the succession or to recover it from the successor personally in the event of the succession being...
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