Jones, NO and Others v Borland SSC and Others

• Jurisdiction: South Africa
• Citation: 1969 (4) SA 29 (W)

Jones, NO and Others v Borland SSC and Others
1969 (4) SA 29 (W)

1969 (4) SA p29

Citation	1969 (4) SA 29 (W)
Court	Witwatersrand Local Division
Judge	Trollip J
Heard	October 8, 1968
Judgment	October 31, 1968

Flynote : Sleutelwoorde

Administration of estates — Testatrix domiciled in Scotland executing two wills there — Domiciliary executors appointed to Scottish assets — Local executors for assets in Republic — Scottish assets insufficient to pay estate duty leviable there — Intention of testatrix that Republican assets be distributed by local executors direct to beneficiaries — Scottish revenue authorities not entitled to prove claim in Republican estate — Local surplus not to be transmitted to Scottish executors — Distribution of entire E surplus direct to beneficiaries ordered — Revenue — Estate duty — Overseas revenue authorities — When they have no rights.

Headnote : Kopnota

The testatrix executed two wills in Scotland where she was domiciled, one dealing with her assets in the Republic and the other with her F assets in Scotland. The wills appointed local executors for the former and domiciliary executors for the latter. The assets of the overseas estate having proved insufficient to pay all the estate duty levied in the United Kingdom, the local executors, i.e. the testamentary executors of the South African estate, applied for an order declaring whether or not part of the surplus in the South African estate should be transferred to the domiciliary executors for payment of the remaining G estate duty due overseas.

Held, that the South African Act 24 of 1913 applied and that in terms thereof the applicants were neither obliged nor entitled to transmit any funds unless foreign creditors proved their claims in the South African estate.

Held, further, as any claim by the overseas revenue authorities would be unenforceable in our Courts, that such claim could not be proved in the South African estate.

Held, further, that it was not the intention of the testatrix as expressed in her wills that the surplus here should be transmitted to H the executors in Scotland.

Held, therefore, that effect had to be given to her intention that the entire surplus should be distributed direct to the beneficiaries by the applicants.

Case Information

Application for a declaratory order. The facts appear from the reasons for judgment.

N. Philips, Q.C. (with him R. J. Goldstone), for the applicants.

No appearance for the respondents.

1969 (4) SA p30

Cur adv vult.

Postea (October 31st).

Judgment

Trollip, J.:

The testatrix died on 11th December, 1963, in Scotland, where she was domiciled, leaving two wills that she had executed in Scotland on 20th October, 1961. The one dealt with all her assets in the Republic, which were appreciable - about R105,000 in value, and the B other with her assets in the United Kingdom. At the time the wills were executed estate duty was not payable in the United Kingdom on any immovable property which was owned by a deceased domiciled in the United Kingdom but which was situated abroad. Thereafter, in 1962, such a d duty was introduced in that country for the first time by the Finance Act of that year (11 and 11 Eliz. 2 C. 44). In consequence, the net assets of C the overseas estate have proved insufficient to pay all the estate duty levied in the United Kingdom; a balance of about £8,300 is still due and payable there. On the other hand, the final liquidation and distribution account of the South African estate shows that there is a net amount of R86,895 available for distribution. The question raised in D the application by the applicants, who are the testamentary executors of the South African estate, is whether any part of the surplus must now be transferred to the domiciliary executors in Scotland for payment of the remaining estate duty, or whether they, are the ancillary executors here, should ignore the claim for foreign estate duty and distribute the surplus direct to the testamentary beneficiaries.

E The difficulty that has arisen stems from the fact that the claim by the revenue authorities in Scotland for the estate duty is not enforceable in any of the Courts of the Republic, for they have no jurisdiction to entertain legal proceedings for the enforcement of the revenue laws of another State. See Commissioner of Taxes, Federation of Rhodesia v McFarland, 1965 (1) SA 470 (W). There VIEYRA, J., F collected and reviewed all the authorities, from which it appears that the same principle is also well established in the United Kingdom. Consequently, if the appropriate part of the surplus in the South African estate were to be transferred to the domiciliary executors in Scotland, where the claim for estate duty is enforceable, it would be used to pay a debt which was unenforceable here. Should the local G executors do that, or be allowed to do that?

Mr. Philips, for the applicants, contended that this Court is endowed by common law with a discretionary power to permit or disallow it, and he relied on Re Lorillard, (1922) 2 Ch. 638 (C.A.). There the...