Targett v Von Stieglitz
[2019] TASSC 25
•5 June 2019
[2019] TASSC 25
COURT: SUPREME COURT OF TASMANIA
CITATION: Targett v Von Stieglitz [2019] TASSC 25
PARTIES: TARGETT, Kenneth Hugh
GREEN,John Martin
as Executors of the Estate of the late Charles David William Helsham Von Stieglitz
v
VON STIEGLITZ, Michael Lewis
VON STIEGLITZ, David Anthony
VON STIEGLITZ, William Andrew
VON STIEGLITZ, Charles Richard
O'NEILL, Katherine Jane
VON STIEGLITZ, Jennifer Mary
FILE NO: 3130/2018
DELIVERED ON: 5 June 2019
DELIVERED AT: Launceston
HEARING DATE: 5 June 2019
JUDGMENT OF: Holt AsJ
CATCHWORDS:
Succession – Administration of estate – Distribution - Generally – Relevant rules – Where testator fixed no period – Executor's year – Interest payable on pecuniary legacy after one year.
Aust Dig Succession [1382]
REPRESENTATION:
Counsel:
Applicants: C Twidale
Second and Fourth Respondents: N Everett
Fifth Respondent In person
Solicitors:
Applicants: Ritchie & Parker Alfred Green & Co
Second and Fourth Respondents: Bartletts
Fifth Respondent In person
Judgment Number: [2019] TASSC 25
Number of paragraphs: 10
Serial No 25/2019
File No 3130/2018
KENNETH HUGH TARGETT and JOHN MARTIN GREEN as Executors of the Estate of the late Charles David William Helsham Von Stieglitz v MICHAEL LEWIS VON STIEGLITZ, DAVID ANTHONY VON STIEGLITZ, WILLIAM ANDREW VON STIEGLITZ, CHARLES RICHARD VON STIEGLITZ, KATHERINE JANE O'NEILL and JENNIFER MARY VON STIEGLITZ
EDITED REASONS FOR JUDGMENT DELIVERED ORALLY HOLT AsJ
5 June 2019
Charles Von Stieglitz died on 23 November 2014. His will made 19 May 2014 was admitted to probate on 25 March 2015. He left a large estate, having a value of approximately $7.3 million, about two thirds of which comprised cash assets and a share portfolio. His will included a number of specific requests and went on to make provision as to the distribution of the residue of his estate. The specific requests included a bequest of $500,000 to his daughter Katherine O'Neill, and a bequest of $350,000 to his daughter Jennifer Von Stieglitz.
Distribution of the estate was considerably delayed by proceedings brought by the testator's four sons claiming further provision pursuant to the Testators Family Maintenance Act 1912. Those proceedings resolved with a notice of discontinuance issuing early in 2017. The resolution of the proceedings did not result in any disturbance of the two specific bequests which I have mentioned. Most of the estate was distributed on 29 March 2017, including the two specific bequests. Approximately $175,000 has been held back from distribution to the residuary beneficiaries by the trustees.
The executors have applied to the Court pursuant to the Administration of Probate Act 1935, s 64, and the Supreme Court Rules 2000, r 604, for the determination of the question of whether they are obliged to pay interest on the specific monetary bequests to Katherine O'Neill and Jennifer Von Stieglitz and, if so, over what period and at what rate. It is common ground that if interest is payable, it should be payable at the rate of four per cent per annum.
The executors brought the application after receiving advice from a barrister that interest was not payable for the period prior to the settlement of the Testators Family Maintenance Act proceedings. The advice was based upon the Western Australian decision of Grove v Fisher [2002] WASC 247. There Hasluck J, in a case where payment was significantly delayed pending the outcome of proceedings brought under the Inheritance (Family and Dependants Provision) Act 1972, concluded that interest was not payable. The fifth respondent, Katherine O'Neill, however claimed that interest was payable, regardless of the reason for delay, on the specific monetary bequests including the bequest to her of $500,000.
The cases on the subject are so clear and longstanding that I am unable to follow the Western Australian decision, which decision did not refer to any of the cases to which I will refer in the course of these reasons.
In Maxwell v Wettenhall (1722) 2 P Wms 28, 24 ER 628, Lord Macclesfield said at 628:
"... if a legacy be given out of a personal estate, and no time of payment mentioned in the will this legacy shall carry interest only from the end of the year after the death of the testator."
The existence of the rule and its basis was explained in Foster v Wyles [1938] 1 Ch at 313, where Farwell J said at 315 and 316:
"The testator in this case died in 1929. Owing to difficulties of administration it has not been possible till now to pay the legacies given by the will and codicil, which , in the ordinary course, had the estate been sufficient, should have been paid at the end of the executor's year. It is a well established rule that if a pecuniary legacy is for any cause not paid over to the legatee at the end of one year from the testator's death, the legatee is entitled to interest on his legacy from that date up to the date of payment. The reason for the rule is obvious. Where the estate is sufficient to pay the whole of the legacies in full, and there is a residue, it is unjust that the residuary legatees who are entitled to nothing until all the legacies have been paid should benefit by the delay in paying them which they would do if the interest which the money has been earning in the meantime was paid to them, and therefore the legatees are entitled to interest on their legacies. But it is quite a mistake, in my judgment, to say that the interest payable to a legatee is in any sense a legacy given by the testator. It is a sum given in the course of administration to the legatee because justice requires that owing to the failure to pay his legacy in due time he should be put in the position in which he would have been had it been so paid; but it is not a bounty of the testator in the sense that a gift to a legatee of the amount of the legacy duty payable on the legacy is an additional legacy given by the testator."
The existence of the rule was accepted by Rich J in Perpetual Trustees Executors and Agency Co of Tasmania Limited v Mitchell, an unreported judgment delivered in the High Court on 19 May 1942. His Honour said in his short judgment:
"By a rule that has been adopted for the sake of general convenience the Court holds the personal estate to be reduced into possession within a year after the death of the testator. Upon that ground interest is payable upon legacies from that time unless some other period is fixed by the will. The basis of the rules is compensation to the legatees for delay in payment. Actual payment may, in many instances, be impracticable within that time: yet in legal contemplation the right to payment exists, and carries with it the right to interest until actual payment."
An appeal against that decision was summarily dismissed.
The position has been affirmed in this State by Crawford J (as he then was). I refer to the matter of Re the Will of Eric Ernest Richards Deceased [1992] TASSC 36. There his Honour said at [10]:
"Where no time of payment is fixed, the general rule is that a general legacy is payable at the end of a year from the testator's death (the so-called 'executor's year'). Benson v Maude [1821] EngR 223; (1821) 6 Madd 15. The executor is by law allowed one year from the date of the testator's death to settle his affairs. At the end of that time the court, for the sake of general convenience and justice, presumes the personal estate to have been reduced into possession. Upon that ground interest is payable on a general legacy from that time unless some other period is fixed by the will. Maxwell v Wettenhall (1722) 2P Wms 28; Wood v Penoyre (1807) 13 Ves 325a at 333; Lord v Lord (1867) LR 2Ch 783 at 789; Re Robert Barr Smith , deceased (1917) SALR 1 at 18, 19; Walford v Walford (1912) AC 658."
It necessarily follows that the specific legacies of $500,000 to Katherine O'Neill and $350,000 to Jennifer Von Stieglitz carry interest from a date being 12 months after the death of the testator, namely, 23 November 2015 until the date of payment, namely 29 March 2017, at the agreed rate of four per cent per annum, and the question posed in the originating application is so answered.
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