ADMINISTRATION OF ESTATE

Press, Volume LXXX, Issue 24445, 20 December 1944, Page 8

ADMINISTRATION OF ESTATE

* JUDGMENT GIVEN YESTERDAY VALUATION OP ANNUITIES FAVOURED Judgment was given by Mr Justice Northcroft in tne Supreme Court yesterday on the case heard on December 7 in which the executor and trustee of the estate of George Gordon Holmes, farmer, of Halswell, applied for directions on the future administration of the estate. The application was made because the estate, after payment of funeral and testamentary expenses, had proved insufficient to provide in full for pecuniary legacies, and to set apart funds for the payment of three annuities. „ „ _ Plaintiff, for whom Mr K. M. Gresson appeared, was John Roberts Cunlngham, solicitor. There were 17 defendants.. Mr C. S. Thomas appeared for the testator s widow, Elizabeth Holmes, and Mr L. J. Hensley for one of the daughters, Mary Elizabeth Paterson. Mr A. C. Perry appeared for a second daughter, Kathleen McMaster, who was an annuitant by order of the Court under the Family Protection Act, and Mr T. A. Gresson appeared for the 14 grandchildren of the testator, who were all residuary legatees under the will. They were Shelagh Ralston Julius, Mary Gordon Thomas, Honor Gordon CoSter, Huntley Gordon Holmes, George Huntley Paterson, Nancy McKelvie, Erik Graham Rutherford, Richard Jack Rutherford, Kathleen Learmonth Rutherford, Cushla Learmonth Rutherford, .Diana Learmonth Rutherford, John Adair McMaster, Colin McMaster, and Bruce Humphries McMaster. ' . .,■ At the original hearing it was stated that the estate hpd shrunk from £59,617 in 1935 to £25,293 at present. The first annuity under the will was One of £IOOO a year to the testator’s wife during her life, and so long as she remained a widow. It was reduced to. £IOO if she remarried. The .second annuity under a codicil to the will was one of £250 a year to Mrs Paterson during her life with restraint on anticipation. Both were chargeable on the residuary estate. The residue of the estate, after payment of testamentary expenses and succession duties, was to be divided equally among all the grandchildren living at the testator’s death, and who attained the age of 25. Mr Gresson’ said at the hearing that the responsibilities of the estate were increased by order of the Court under the Family Protection Act. The Court of Appeal decided that Mrs McMaster should be paid out of the estate an annuity of £156 a year-from! the-“date of ’ the death of the testator. The annuity was payable monthly, and was inalienable. In his judgment, his Honour said that he had come to the conclusion that the executor’s legacy did not take precedence where there was a deficiency, but was subject to abatement with other legacies, including legacies of annuities. To do justice to all parties and. at the same time to maintain the purpose of the testator, his Honour stated there should be a valuation of the annuities upon an acturial basis, and he adopted the suggestion made from the bar that the basis be : that prescribed in the table referred to as the "Carlisle Table.” The present difficulty and the consequent need for valuation was not revealed at the date of death as at that time the value of the estate appeared sufficient to satisfy the legacies and the annuities. Therefore, the valuation should be made as at .this date, the date of the order. To the values of the several annuities thus found, he said, the amount of arrears should be added. There would then be a notional division of the estate among the plaintiff, as legatee, and the annuitants. The estate as it was realised would be divided. The executor would be entitled to pay himself the proportion attributable to his legacy and would pay the balance into an annuity fund for each of the three annuitants. The annuity funds for the several annuitants would be applied both as to income and capital to make good the incapacity of the income of the unrealised assets to satisfy the annuities. Upon the death of any annuitant such portion of the annuity fund as was set aside for that annuitant would be divided in the same way as was now prescribed for the proceeds of assets as realised, excepting, of course, that the funds for annuitants would then be retained only for survivors. His Honour granted an adjournment to allow counsel to submit a draft order giving effect to the judgment, and pending determination of subsidiary questions