The Revenue Commissioners v The Most Reverend Edward Doorley
| Judge | Hanna J. |
| Judgment Date | 02 March 1932 |
| Court | High Court |
Legacy duty - charitable bequest - whether to be expended in Ireland - construction of will - interpretation of taxing statute - exemption from legacy duty - whether charitable bequest had to be expended in Ireland.
James O’Boyle late of Strokestown, Co Roscommon, by his last will left the residue of his estate upon trust to pay the income therefrom to his wife for her life and after her death to pay the said residue to “the Catholic Bishop of Elphin and the Parish Priest of Strokestown for the time being for such religious and charitable purposes as they in their absolute discretion think fit. They to give preference to Strokestown and adjoining parishes”. The testator was survived by his wife and on her death the Revenue Commissioners claimed legacy and succession duties in respect of the residuary estate.
Held, in the High Court by Hanna J, in refusing the exemption from duty that the trustees of the will had discretion to expend the funds outside Ireland and that the exemption under the statutes was limited to legacies expended in Ireland.
Held, in the Supreme Court in allowing the appeal by:
- (a) Kennedy CJ that the trustees were obliged by the terms of the will toapply the residuary estate for charitable purposes within the ambit of Strokestown and adjoining parishes but that the exemption from legacy duty under the Stamp Duties (Ireland) Act 1842 (the Act) s 38 was restricted to charitable legacies expended in Ireland, and
- (b) Fitzgibbon J and Murnaghan J that there was no obligation on the trustees to expend the charitable bequests in Strokestown or the adjoining parishes and that the expenditure might be made outside Ireland at their discretion but that s 38 of the Act was not limited to charitable purposes in Ireland.
Stamp Duties (Ireland) Act 1842 s 38. Succession Duty Act 1853 s 18. FA 1923 s 17. FA 1932 s 46.
Cases referred to in judgmentAG v Carlton Bank [1899] 2 QB 158.
AG v De Preville [1900] 1 QB 223.
AG v Delaney IR 10 CL 104.
AG v Hope IR 2 CL 308.
Cullen v AG LR 1 HL 190.
Heydon’s case 3 Rep 75.
Kenny v AG 11 LR IR 253.
Lumsden v IRC [1914] AC 877.
Marron v Cootehill (No 2) Rural District Council [1915] AC 792.
Mersey Docks v Lucas 51 LJ QB 114.
Newman Manufacturing Co v Marrable [1931] 2 KB 297.
Palmer v Johnson 13 QBD 351.
Partington v AG LR 4 HL 100.
Power Lane Manufacturing Co v Putnan [1931] 2 KB 309.
Pryce v Monmouthshire Canal Co 4 AC 197.
Reid’s Trustees v Dawson (1915) SC (HL) 47.
Tennant v Smith [1892] AC 150.
Young v Robertson 4 Macq HL 314.
Hanna J. This case is quite clear. It arises out of the will of the late James O’Boyle of Strokestown in the County of Roscommon. By his will he left the residue of his estate to his executors and trustees to pay the income to his wife, and after her death, directed them “to pay said residue to the Catholic Bishop of Elphin and the Parish Priest of Strokestown for the time being for such religious and charitable purposes as they in their absolute discretion think fit. They (sic) to give preference to Strokestown and adjoining parishes”.
Now, the first question that arises for consideration is in regard to the construction of that clause - whether it imposes an absolute obligation on the trustees to expend the residue for charitable purposes in Strokestown and the adjoining parishes alone, or whether, included in this trust, there is a discretionary power to go outside Strokestown and the adjoining parishes.
The words of the clause are rather peculiar. To the words of the will giving absolute discretion to the trustees, the testator has added the words “they to give preference to Strokestown and adjoining parishes” and I must give effect to the words of that clause. I think the words “they to give” are used as in ordinary language to impose an obligation on the trustees, and mean “I direct them to give”. The words in the phrase mean a command to the trustees with reference to Strokestown and the adjoining parishes that the trust funds should be applied in priority to Strokestown and the adjoining parishes. But the words used leave in the hands of the Bishop and the Parish Priest, after giving preference to Strokestown and the adjoining parishes, a residue of discretion as trustees to be exercised without limitation. That is the most favourable interpretation I can give for the charity.
That being so, I have to see what law is to be applied to charitable gifts operating not only within but outside Ireland.
This class of case has been most carefully considered in several cases, and it has been held that the charity must be in Ireland in order to exempt the gift from duty in Ireland. The words of s 38 (5 & 6 Vict c 88) apart from their context would seem prima facie to indicate that any charitable purpose anywhere would be exempt but the view taken by the courts has always been that the qualifying phrase “in Ireland” used in the preceding headings with reference to legacies should be implied with reference to the general heading of “merely charitable purposes” at the end of the section. Therefore the section may not be taken in the ordinary grammatical sense. In AG v Hope IR 2 CL 368, which was argued before the Exchequer Division, Baron Pigot delivered a long and learned dissenting judgment, but the two other Judges, Baron FitzGerald and Baron Deasy, concurred in the view that has been accepted as law in Ireland and for the past seventy years. It has been approved by Palles CB in AG v Delaney IR 10 CL 104, it was also expressly approved of in Kenny v AG 11 LR IR 253 by Sullivan MR. It has been submitted that I should form my own view and reverse these Judges if I think them wrong. But as the law on this point as regards charities has been accepted in Ireland for the past seventy years and has been approved of by most eminent Judges, I think that if a change is to be made, it should be done by the legislature or by the Supreme Court, and not by a Judge of first instance. I am not prepared to say that I think the law as laid down in these cases is wrong. I come to the conclusion that the clause in the will is governed by the principle of these decisions and is therefore not exempt from duty.
Kennedy J. This is an appeal by the defendant, the Most Reverend Dr Doorley, from the judgment in favour of the plaintiffs entered on 2 March 1932 on the trial of the action by Mr Justice Hanna, by which it was ordered that the defendants do deliver to the Revenue Commissioners an account for succession duty of the succession which arose under the will of the late James O’Boyle on the death of his widow, Nannie O’Boyle, to property situate in Strokestown in the County of Roscommon; and, secondly, an account for legacy duty under the same will, on the same occasion, in respect of the residuary pure personal estate of the said James O’Boyle and ordered that the defendants pay to the Revenue Commissioners the duties chargeable, with costs of the proceedings. The facts are, shortly, these.
By his will, made on 26 September 1923, Mr James O’Boyle who lived and carried on business at Strokestown, gave a number of pecuniary legacies and other bequests and disposed of the residue of his property in the following words:
I devise, will and bequeath the residue of my estate to my executors and trustees upon trust to pay the income arising from said residue to my wife Nannie O’Boyle during her life and after her death to pay said residue to the Catholic Bishop of Elphin and the Parish Priest of Strokestown for the time being for such religious and charitable purposes as they in their absolute discretion think fit. They to give preference to Strokestown and adjoining Parishes.
The testator appointed the National Bank Ltd to be the executors and trustees of his will and, in the event of their refusal to act, which event happened, he appointed as executor and trustee “the person for the time being who holds the position of Public Trustee for Southern Ireland” and he directed that all his legacies be paid free of all legacy and estate duty.
The testator died on 7 April 1924 and the National Bank Ltd and the “Public Trustee for Southern Ireland” having respectively renounced their rights to probate, letters of administration with the will annexed were granted to the testator’s widow, Nannie O’Boyle, who, however, died on 19 April 1928, whereupon letters of administration de bonis non were granted to Mrs Theresa Garvey, a sister of the testator. The Bishop of Elphin at the date of the death of the testator’s widow was the defendant, the Most Reverend Edward Doorley, Bishop of Elphin and Parish Priest of Strokestown was the other defendant, the Venerable Archdeacon McDermott, who, however, died the day after the issue of the originating summons in this matter.
The Revenue Commissioners claimed that succession duty was payable by the defendants on the succession which arose under the will of Mr O’Boyle on the death of his widow, Nannie O’Boyle of the chattels real situate in Strokestown and also legacy duty in respect of the residuary pure personal estate of the testator arising on the death of his widow. The defendants claimed exemption from both succession duty and legacy duty under 5 & 6 Vict c 82 s 38 and the Succession Duty Act 1853 s18.
It was stated that the estimated value of the residuary estate of the testator available for religious and charitable purposes would amount to £5,000 or thereabouts. An affidavit was filed by the Most Reverend Dr Doorley in which he set out the area covered by the Parish of Strokestown (where most of the people are very necessitous) and the adjoining parishes. He said that the whole sum of £5,000 could very advantageously be expended many times over in religious and charitable works in the Parish of Strokestown in accordance with the testator’s direction and that the adjoining parishes are equally poor and equally urgently in need of charitable donations. The...
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