74
No. 18.
Judgment of the Puisne
Judge on the Appeal to thé Full
Court.
34
such investment is optional only, so that the trustees may completely perform their duty by investing in some form of personal security, there would be no conversion, and the rights of the parties would depend on the actual nature of the property at the material time".
17th Febru- Sargant L.J. said at p. 537;
ary,
1936. (Continued)
"But in order that an equitable conversion of money into land may be effected, it is necessary that the trust for conversion should be definite and imperative. It will not do, for instance, if the trust is permissive only, or if there is an alternative to invest either in real estate or in leaseholds". The Will in this case does not, to my mind, disclose any paramount 10 obligation upon the trustees to set apart out of the residue a fund sufficient to pay the annuity of £10,000 to Lady Chater as Clause 13 clearly gives the trustees a discretion to do so or not "if they so think fit." Accordingly I am of opinion that equity cannot be invoked in support of this appeal.
Now coming to the second submission of Appellants' Counsel, I consider the annuity to Lady Chater as the gift of an annuity simpliciter, there being, as stated, no direction in the Will to set aside a fund out of which it was to be paid. The cases referred to by Mr. Macnamara do not support the view that the gift of an annuity simpliciter would constitute any portion of testator's estate as settled, indeed in one of them (Re Waller (1916) 1 Ch. 153) Sargant J. 20 at p. 158 expresses an opinion to the contrary. This, it is true, is merely obiter as the question did not arise directly for decision. Mr. Macnamara's submission is that the annuity in question was an interest in property which interest stood limited to or in trust" for Lady Chater for life and passed on her death to the residuary legatees the Armenian Holy Church of Nazareth. Lady Chater's interest was not an interest in any specific part of the residue, she had merely an interest in the entire residue (admittedly unsettled) which interest was limited to ensuring the payment of her annuity of £10,000. I fail to see how such an interest can be regarded as a settled interest in property. The cases to which we have been referred do not support this view and both 30 Hanson and Harman, to which Mr. Potter has referred, are against it.
Mr. Macnamara's contention is that the gift of the annuity was the gift of a life interest. A life interest in what? His answer is that it was a life interest in an undivided share of the residuary estate easily ascertainable by an arithmetical calculation. But the amount of capital necessary to secure the payment of £10,000 a year would vary from time to time depending upon the productivity of the investments at any given period. I do not consider that an interest in such a fluctuating capital can be regarded as a settled interest in property limited to persons by way of succession within the meaning of s. 25 (2) of the Estate Duty Ordinance, 1932, and therefore agree that this appeal should 40 be dismissed with costs.
Sd/ J. J. HAYDEN,
PUISNE JUDge,
February 1936.