The Right Honorable Edward Baron O'Neill, Successor to Real Estates Under The Wills of The Right Honorable C. H. St. J. Earl O'Neill, Deceased

• Jurisdiction: Ireland
• Judgment Date: 11 November 1886
• Date: 11 November 1886
• Court: Exchequer Division (Ireland)

Ex. Div. (Revenue Side.)

IN THE MATTER OF THE RIGHT HONORABLE EDWARD BARON O'NEILL, SUCCESSOR TO REAL ESTATES UNDER THE WILLS OF THE RIGHT HONORABLE C. H. ST. J. EARL O'NEILL, DECEASED.

Lord Braybrooke v. The Attorney-General 9 H. L. Cas. 150.

Oldfield v. PrestonENR 3 De G. F. & J. 398.

Partington v. Attorney-GeneralELR L. R. 4 H. L. 100.

Re De LanceyELR L. R. 5 Ex. 102.

The Attorney-General v. The Marquis of AilesburyELR 16 Q. B. Div. 408.

In re JenkinsonENR 24 Beav. 64.

Fryer v. Morland 3 Ch. Div. 675.

The Attorney-General v. The Earl of Sefton 11 H. L. Cas. 257.

Brooke v. Lord MostynENR 2 De G. J. & S. 373.

Donaldson v. Donaldson 3 Ch. Div. 743.

Ferguson v. FergusonUNK 17 L. R. Ir. 552; and on appeal, Ibid. 567.

Gilliland v. Crawford Ir. R. 4 Eq. 35.

Hibbert v. CookeENR 1 S. & S. 552.

Dent v. DentENR 30 Beav. 363.

The Solicitor-General v. Law Reversionary Interest SocietyELR L. R. 8 Ex. 233.

Drake v. Trefusis 10 Ch. App. 364.

Jesse v. Lloyd 48 L. R. 656.

In re Leigh's EstateELR L. R. 6 Ch. 887.

Nairn v. MajoribanksENR 3 Russ. 582.

Dunne v. DunneENRENR 3 Sm. & Giff. 22, 29; on appeal, 7 De G. M. & G. 207.

Partington v. Attorney-GeneralELR L. R. 4 H. L. 100, 122.

Le Marchant v. The Commissioners of Inland Revenue 1 Ex. Div. 185.

The Attorney-General v. Floyer 9 H. L. Cas. 477.

Succession duty Incumbrances created or incurred by the successor Sinking fund for paying of antecedent incumbrances Release 16 & 17 Vict. c. 51, s. 34 (*).

VOL. XX.] Q. B., C. P., & EX. DIVI8101413. 73 IN THE MATTER OF THE RIGHT HONORABLE EDWARD Ex. Div. BARON O'NEILL, SUCCESSOR TO REAL ESTATES UNDER (Revenue Side.) 1886. THE WILL OF THE RIGHT HONORABLE C. H. ST. J. Nov. 8, 9, 10, EARL O'NEILL, DECEASED. 11. Succession'duty-Ineumbrances created or incurred by the successor-Sinking fund for payment of antecedent incumbrances-Release-16 4 17 Viet. c. 51, s. 34 01. A devised certain landed estates to trustees for a term of years, and subject thereto upon divers limitations, of which the following alone took effect, viz. to B for life, remainder to C for life, remainder to D in tail. The trusts of the term were, out of the rents and profits, to keep down the interest on the debts, charges, and incumbrances affecting the said estates, and to raise oat of the rents and profits 3000 yearly, to be applied as and when a sufficient fund should have been thereby accumulated in the discharge of the principal moneys due in respect of the said debts, charges, and incumbrances, and of such porÂÂtion of the testator's simple contract debts as were by his will directed to be paid out of his real estate, in case his personal estate should be insufficient. Upon A's death, in 1841, B went into possession of the estates as tenant for life, and, by a decree made in a Chancery suit instituted by the trustees of the will against B and others, B was directed to invest the surplus rents, after payment of interest and other outgoings, in 3-1- per cent. stock (not exceeding 3000 yearly), and transfer the same from time to time to the credit of the cause. B died in 1855, and a similar decretal order was made as to C, the next tenant for life, in a supplemental suit, to which C and D, the next remainÂÂderman in tail, were parties. Several investments and transfers were made, pursuant to the said orders, and the sinking fund so formed was accumulated in accordance with the directions in A's will up to 1863, when C and D barred the entail, and limited the lands to such uses as they should jointly appoint ; and C and D afterwards raised, upon mortgage of the said lands, a sum of 40,000, which, with the exception of 4500, part thereof, which was (*) In estimating the value of a succession, no allowance shall be made in respect of any incumbrance created or incurred by the successor, not made in execution of a prior special power of appointment; but an allowance shall be made in respect of all other incum VOL. XX. brances, and also in respect of any moneys which the successor may preÂÂviously to his possession have laid out in the substantial repairs or permanent improvement of real property comÂÂprised in his succession. 0 74 LAW REPORTS (IRELAND). [L. R. L Ex. Div. transferred to the credit of the Chancery cause in respect of the sinking fund, 1886. was paid to C, to recoup him for payments made for the benefit of the estates, In re including the rebuilding of the mansion-house, and other permanent improve I'D' °'NE.111- ments, adding to their letting value ; and the lands were resettled to the use of C for life, remainder to D for life, with divers remainders over, subject to a trust term to raise 25,000 when required by C and D, and to apply same as they should direct. C thenceforward ceased to keep np the sinking fund, until 1877, when the arrears thereof amounted to 42,000, and an agreement was made between C and D, providing, amongst other things, that the 25,000 so charged by the resettlement should be released to the extent of 20,000, such release to be taken in discharge of C's liability in respect of the sinking fund up to the 20th January, 1878, that certain sums then standing to the credit of the fund should be forthwith applied in discharge of incumbrances affecting the inheritance, and the sinking fund should be thenceforward regularly kept up by C. This agreement was sanctioned by the Court, subject to the addition of certain further provisions, and was carried out by deed. C continued to keep up the sinking fund till his death, in 1883, when D became entitled to the estates. In assessing the succession duty payable by D, the Commissioners of Inland Revenue disallowed from the list of incumbrances, which D claimed to deduct 45,000, on the ground that incumbrances to this extent would have been paid off but for the suspension of the sinking fund from 1863 to 1878. Upon petition by D : Held, that the incumbrances represented by this sum were not created or incurred by D, within the 34th section of the Succession Duty Act, and that he was accordingly entitled to the deduction claimed. PETITION by way of appeal by the Right Honorable Edward Lord O'Neill against an assessment of succession duty made by the Commissioners of Inland Revenue. The petition set out the will of Charles Henry St. John Earl O'Neill, dated the 21st November, 1832, and whereby he devised to John Godley and John 11'Neill, and their heirs, subject to a term of 500 years, and the trusts thereof, certain lordships and terriÂÂtories of which he was seized for an estate of inheritance in fee-simple, and also all the ultimate reversion or remainder in fee-simple, in certain other lordships, territories, and hereditaments, settled by his father's will to and for the several uses therein declared, and, amongst others, to the use of his brother, J. B. R. O'Neill and his assigns, for his life, with remainder, after certain limitations (which failed to take effect) to W. Chichester and his VoL. XI.] Q. B., C. P., & EX. DIVISIONS. 75 assigns, for his life without impeachment of waste, remainder to Ex. Div. trustees to preserve contingent remainders, remainder to the first 1886. and other son and sons of the said W. Chichester successively in hi re LD. O'NEILL. tail male, with divers remainders over ; and the said testator by his will directed that as to the said estates whereof he was seized in fee-simple, as aforesaid, and also as to his settled estates, if and when his reversion in fee therein should take effect, his said trusÂÂtees, their executors, administrators, and assigns, should stand possessed of the same for the term of 500 years, to be computed from the day of his death, upon trust that the said trustees and the survivor of them, his executors, administrators, and assigns, should out of the rents and profits thereof levy and raise such sum and sums of money as should be sufficient to pay off and discharge the receiver's fees (if any), and the interest due and to grow due on the several debts, charges, and incumbrances, affecting the said estates, and should pay and apply the money to be so raised in discharge of the same accordingly, and upon further trust until the said debts, charges, and incumbrances, and all interest for the same, respectively, should be fully paid and satisfied by the ways thereinafter mentioned, should levy and raise by and out of the rents and profits of the said hereditaments and premises comprised in the said term of 500 years, or any of them, or any part thereof, respectively, the clear annual sum of 3000, sterling, by half-yearly gales on the 1st January and 1st July in every year; and should from time to time as and when a sufficient fund should have accumulated for any particular debt or debts, pay and apply the same in liquidation of the principal moneys due on foot of the said several debts, charges, and incumbrances, and also in liquidation of such portion (if any) of his simple contract debts as by his said will were directed to be paid out of his said real estates, in the event of his personal estate being insufficient, and so from time to time until the whole of the said charges and incumbrances should have been paid off and discharged, such payments of principal to be made in such order and in such manner as to his said trustees or trustee should seem expedient ; provided nevertheless, and the said testator by his said will further directed that, until his the said tesÂÂtator's reversion in fee in the said settled estates should take effect, G2 76 LAW REPORTS (IRELAND). [L. R. I. Ex. Div. the said fund and its accumulations should be entirely confined to 1886' the payment of the principal moneys on the debts, charges, and In re .m11 mbrances affecting the said estates whereof he was seized in ID. O'NEILL. fee-simple at the time of making his said will ; and the said tesÂÂtator bequeathed certain leasehold hereditaments upon trusts corÂÂresponding with the trusts thereinbefore declared concerning his...