31
the Chief
to the Full
ary, 1936.
than a recognition that this cannot be effected by the trustees without their first No. 17. estimating what proportion of the estate will be sufficient to answer the annuities. Judgment of Furthermore I find it impossible to read into Clause 13 of the Will anything Justice on resembling a declaration of the trustees' right to postpone appropriation. The the Appeal words "my Trustees shall be at liberty, if they so think fit, to appropriate, etc." Court. give the trustees absolute discretion to appropriate or not to appropriate, and 17th Febru- the fact that they have exercised that discretion in a way that may now cause (Continued) loss to the residuary estate cannot entitle them to call equity to their aid and ask this Court to say that what might have been done to the advantage of the estate 10 should be deemed to have been done. Nor again does the case of Harbin v. Masterman (supra) help the appellants since that case decided no more than that in proper circumstances the Court will allow a remainderman's claim for the distribution of the residuary estate by requiring the trustees to set aside a sufficient portion of the estate to answer annuities given by the Will. It does not decide that any residuary legatee has the absolute right to come in at any time and claim such setting aside and distribution, and even if it did, I fail to see how it could help the appellants who are the trustees of the Will, and not the residuary legatees.
Nor am I in agreement with the second submission made for the appellants. 20 I agree with the judgment on this point of Sir Atholl MacGregor, C.J. in the Court below. Apart from the case of A. G. v. Watson (supra) the other judgments relied on, A. G. v. Owen (1899) 2 Q. B. 253; In re Campbell, (1902) 1 K.B. 113; In re Waller (1916) 1 Ch. 153; established no more than that where a testator's will directs the setting aside out of his estate of a fund to answer annuities, such a fund becomes settled property, and were most carefully worded to make clear that this principle should not necessarily be interpreted "to conclude the case of a simple gift of an annuity in general terms where there is no trust for payment of the annuity out of a particular fund" (per Stirling L.J. in re Campbell (supra)). It is true that the decision in A. G. v. Watson (supra) goes. 30 a step further in holding that the gift of an annuity simpliciter does give the annuitant an interest in the testator's residuary estate, but this decision and that in the later case of A. G. v. Cook (1921) 3 K. B. 607, where an annual payment was charged on four fifths of the residuary estate, go no further than to say that the interest of the annuitant in such a case is such an interest as, though it does not actually pass to any other person on the annuitant's death, yet is deemed so to pass in accordance with the provisions of sec. 2 (1) of the Finance Act, 1894 (57 and 58 Vict. c. 30). That sub-section is the source of s.s.2 of s.5 of the Estate Duty Ordinance, 1932, and it seems clear therefore that Lady Chater had an interest, ceasing on the death, in her husband's 40 residuary estate which must be deemed to have passed on her death and to have therefore attracted estate duty to the extent to which a benefit accrued or arose by virtue of the cesser of such interest. Were that not so, the appellants need not have called the provisions of s.25 of the Ordinance to their aid.
I do not, however, think there is substance in Mr. Macnamara's argument that because the Will gave Lady Chater this interest in her husband's residuary estate it follows that her interest was itself in the nature of settled property.
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