settlor-Trust to come into operation on death of survivor of settlor or his wife -Death of the settlor before his wife- Administration and Probate Act 1890 (Vict.) (No. 1060), sec. 112-Administration and Probate Act 1903 (Vict.) (No.

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1815), sec. -Costs -Unsuccessful appeal to High Court by trustee-Costs out of trust estate-Special circumstances.

Sec. 112 of the Administration and Probate Act 1890 provides that every settlement of any property made

by any person containing trusts or dispositions to take effect after his death, shall upon the death of the settlor be registered within the prescribed time trusts or dispositions shall be valid unless such settlement be so registered." The section also requires that the trustees of the settlement shall before registration pay the duty fixed by the Statute.

Held, that a settlement containing trusts which are directed to come into operation upon the death of the settlor and his wife is a settlement containing trusts to take effect after the settlor's death, notwithstanding that the settlor dies before his wife, and is liable to duty accordingly.

Whiting v. McGinnis, (1909) V.L.R., 250; 30 A.L.T., 207, approved. Held, further (Higgins J. dissenting), that under the circumstances of this case the trustees who unsuccessfully appealed from the decision of the Supreme Court ought to be allowed their costs of the appeal out of the trust

Decision of the Supreme Court: Rosenthal v. Rosenthal, 32 A.L.T., 46,

APPEAL from the Supreme Court of Victoria.

On 15th May 1885 David Rosenthal by an indenture of settlement covenanted that he would transfer to trustees certain real estate to hold upon certain trusts which may be shortly stated as follows: Upon trust upon the marriage of each of his two daughters, Rosie and May, to pay to the trustees of the marriage settlements of each of them an annual sum of £240 to be applied according to the trusts of such settlement, and subject to such trust to permit the settlor's widow, Julia Rosenthal, to receive the rents and profits of the settled property for her life, and from and after her decease to permit the settlor to receive such rents and profits during his life, if he should survive his wife, " and from and after the decease of the longest liver of the settlor and his wife upon trust to pay two annuities of £240 each out of the rents and profits to the two daughters of the settlor before mentioned in the event of either or both of them not having married, and subject thereto upon trust to divide and apply the rents and profits equally among the children of the

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testator and his wife. The trustees of the settlement were given power to sell the trust property either during the lifetime…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Rosenthal v Rosenthal

Details

AGLC: Rosenthal v Rosenthal [1910] HCA 47
Case: [1910] HCA 47
Decision Date: 16 September 1910

CaseChat Overview and Summary

The appellants, trustees of a settlement, appealed to the High Court of Australia from a decision of the Supreme Court of Victoria concerning the application of stamp duty. The dispute arose from an indenture of settlement made by David Rosenthal in 1885, which contained trusts and dispositions intended to take effect after his death. The settlor died in 1910, having predeceased his wife. The core of the dispute was whether this settlement was subject to duty under section 112 of the *Administration and Probate Act 1890* (Vic.).

The legal issues before the High Court were: (1) whether the settlement, which provided for the settlor's widow during her life and then for the settlor during his life if he survived her, with ultimate trusts for their children, constituted a settlement containing trusts or dispositions to take effect after the settlor's death, notwithstanding that the settlor died before his wife; and (2) whether the trustees were entitled to their costs of the unsuccessful appeal out of the trust estate.

The Court, by majority, held that the settlement was indeed a settlement containing trusts and dispositions to take effect after the settlor's death, as contemplated by section 112 of the *Administration and Probate Act 1890*. The Chief Justice and Isaacs J. reasoned that the word "after" in the section referred to a period subsequent to the settlor's death, and the crucial question was whether, at the time of the settlor's death, any trust or disposition contained in the settlement had not yet taken effect and was still capable of doing so. In this case, the beneficiaries' interests in the rents and profits were contingent on surviving the settlor's widow, and thus could not take effect until after the settlor's death, irrespective of the fact that the settlor had predeceased his wife. Higgins J. dissented, arguing for a narrower interpretation of "after" and focusing on the immediate operation of trusts.

The Court ordered that the appeal be dismissed. The Master-in-Equity was awarded costs against the appellants, who were permitted to recoup these costs from the trust estate. The costs of the respondent Rosenthal and the trustees' own costs of the application were to be paid out of the trust estate as between solicitor and client, with the Chief Justice and Isaacs J. finding special circumstances justifying this order due to the complexity and lack of clear precedent. Higgins J. dissented on the costs order, believing the trustees should bear their own costs of the appeal.

Orders