Estate Kootcher v Commissioner for Inland Revenue

• Jurisdiction: South Africa
• Judge: De Wet CJ, Watermeyer JA, Tindall JA, Centlivres JA and Feetham JA
• Judgment Date: 29 March 1941
• Citation: 1941 AD 256
• Hearing Date: 18 March 1941
• Court: Appellate Division

Watermeyer, J.A.:

In this case a dispute has arisen between the parties as to the correct assessment under sec. 4 of Act 29 of 1922 of the dutiable amount of the estate of the late Morris Kootcher.

It appears that Kootcher, who was domiciled in South-West

Watermeyer, J.A.

Africa when his death occurred on 12th December, 1935, owned property both in South-West Africa and in the Union. His assets in South-West Africa were worth £36,544 and his assets in the Union £65,795. Among his liabilities was a debt of £35,691 owed to the Standard Bank of SA Ltd in the form of an overdraft at the Windhoek branch of the bank. As security for this debt Kootcher had passed a mortgage bond of £10,000 over his immovable property in South-West Africa and had pledged gold mining shares for the balance of £25,691. These shares were at the time of his death in the possession of the Johannesburg branch of the Standard Bank. They were realised in the Union by Kootcher's executor, and the debt of £25,691 was paid out of the proceeds of such realisation. In calculating the dutiable amount of the estate for the purposes of assessing Estate and Succession duty the Commissioner for Inland Revenue refused to allow the said debt of £25,691 to be deducted from the total value of the estate. The sole question which this Court is asked to decide is whether or not sec. 4 (a) (ii) of Act 29 of 1922 permits deduction of that debt from the value of the assets of the estate for the purpose of determining the dutiable amount of the estate. That section authorises the deduction of "all debts due by the deceased to persons ordinarily resident within the Union", and the dispute between the parties centres round the question whether the Standard Bank of SA Ltd is in law to be regarded as "ordinarily resident within the Union".

The Standard Bank of S.A.Ltd is a company incorporated with limited liability under the English Companies Acts. Its registered office is in London and its business is controlled by a board of directors which meets in London. It had many branches throughout the Union and South-West Africa which are under the supervision of a general manager in Cape Town, responsible to the directors in London. In the Transvaal Provincial Division MARITZ, J., decided that the debt was not a permissible deduction.

Relying on the decision of Rex v Lovitt and Others (1912, A.C. 212), he took the view that the Windhoek branch of the Standard Bank of SA Ltd...