Scottish Court of Session Decisions

Lord Trayner—The Finance Act 1894 makes provision in section 23, sub-section 18, for the manner in which (in Scotland) a person who has paid estate-duty on any property, “and in whom the property is not vested,” may operate his relief by obtaining from the Court (1) an order for the sale of the property or part thereof, or (2) an order on the person in whom the property is vested to grant a bond and disposition in security over the property for the amount of the duty paid. These provisions do not avail the present petitioners, for they are themselves vested in the property in respect of which duty has been paid. By section 9, sub-section 5, however, it is provided that any person who pays the duty shall be entitled to sell or mortgage the property for the amount of the duty paid, “and any interests and expenses properly paid or incurred by him in respect thereof.” I should have thought, in view of that provision, that the petitioners would not have had any difficulty in borrowing upon the security of the estate the amount of the duty and interests and expenses (if any) connected therewith. I do not at present see why a lender should not have been satisfied with such a title as the petitioners under statutory authority are authorised to grant. The petitioners, however, state that they cannot get the necessary loan unless the authority of the Court now craved is granted, and in these circumstances no good reason occurs to me why the Court should not lend its aid to the petitioners. I think therefore the prayer of the petition should be granted except in so far as it asks that the amount to be borrowed should include the expenses of the present application. I think these are not within the “expenses” contemplated by section 9 (5), but these expenses may fairly be charged by the petitioners against the trust estate as expenses incurred in its due administration.

It was suggested that this application could only competently be presented to the Junior Lord Ordinary, but I think we may competently deal with it as an appeal to the nobile officium of the Court.

Lord Moncreiff—I am also of opinion that we are justified in granting the authority asked for in this petition. My only doubt is as to whether the authority of the Court is required. I am disposed to think that under sub-section (5) of section 9 of the Finance Act of 1894 the trustees are entitled to charge the property with the succession duties without any authority. This view receives support from the terms of section 23, which provides that where any person in whom the property is not vested is authorised by the Act to raise the estate-duty paid by him for such property by the sale or mortgage of the property, he may do so by means of an application to the Court.

The present petition has, however, come before us under peculiar circumstances. I understand (1) that there is no authority to borrow in the trust-deed, and (2) that no lender can be found willing to advance the money unless the authority of the Court is obtained. I therefore think that the Court is justified in granting the authority asked. In doing so we shall follow the example set in the case of Laurie. In that case the First Division of the Court adopted the present course, although, as here, it was doubtful whether their authority was required. It might have been said in that case that the provisions of the Finance Act over-rode the prohibition against contracting debt in the entail, just as in this case it is said that they supply a power to borrow on the security of the estate which is not contained in the trust-deed.

I am also of opinion, with Lord Trayner, that the expenses of the present application should not be included in the amount authorised to be charged on the estate.

The Lord Justice-Clerk concurred.

Lord Young was absent.

The Court pronounced this interlocutor—

“Authorise the petitioners as trustees of the deceased Henry William Harris to burden the estate of The Cairnies with the sum of £1079, 11s. 11d., being the amount of estate-duty, succession-duty, and settlement estate-duty paid by them in respect of the said estate, and the further sum of £26, 6s. 1d., being the amount of the expenses incurred in settling the said duties, amounting together to the sum of £1105, 18s., and to grant a bond and disposition in security or bonds and dispositions in security in ordinary form for the said sum of £1105, 18s. over all and whole the lands described in the prayer of the petition, and here held as repeated brevitais causa, and that in favour of such person or persons as may advance the said sum, and decern.”