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DECISIONS OF
PROFESSIONAL INTEREST
Does a clause in a w ill declaring that a solicitor-
executor shall he entitled to charge all usual professional
or other charges constitute a bequest tvhich in law w ill
attract legacj duty ?
In New South Wales Commissioners o f Stamp
Duties
v.
Pearse and others (1954 1. All E. R. 19)
the Privy Council considered this point on the
construction o f the New South Wales Stamp Duties
Acts 1920-40. It was dealt with as an estate duty
question although the reasoning is applicable also
to legacy duty. Schedule V II to the Act specifies
rates o f death duty payable on the final balance of
estates o f deceased persons, different rates being
chargeable on dispositions to various classes o f
beneficiaries.
The testator had appointed the
respondent, a solicitor, as executor and trustee o f his
will and had declared that the respondent was to
be entitled to charge and retain and be paid all usual
professional or other charges incurred by him in
relation to the will against the estate. It was agreed
that the value o f the benefit received by the respon
dent under this clause was £2 50, and he was assessed
to duty under the fourth column thereon. The
Privy Council, following re Thorley, in which it
was held that such a benefit to a solicitor-trustee
was a legacy which must abate rateably with other
legacies in the event o f a deficiency, held that the
charging clause in the present case created a benefit
which was liable to duty. In the 4th edition of
Cordery on Solicitors, page 272, it is stated that a
direction in a will enabling a solicitor-executor or
trustee to charge for his services constitutes a bequest
to him o f a legacy (being the amount o f his profit
costs conditional on his doing the work) but that
the duty is not claimed except possibly where a
fixed annual sum is payable.
(a) Has the Court discretion to disregard a technicality
in failure to comply with Order VII, rule
2,
R.S.C.
1905
whereby on a change o f solicitor no step in the action
can be taken until notice o f change is served and filed
?
(1
b
)
Where an action has been dormant fo r over six
years w ill the Court refuse to allow it to be continued
unless special reasons are shown why it should proceed ?
The Court answered both questions in the
affirmative.'
{a)
Order V II, rule 2(1) R.S.C. (England) dealing
with change o f solicitor provides that until notice
o f change has been filed and served the former
solicitor shall be considered the solicitor o f the
party until the final conclusion o f the cause or matter.
Order V II, rule 2 R.S.C. 1905 although not so
explicit is similar in effect. The plaintiff whose
action had slept for twelve years gave notice to
proceed. The defendant went to new solicitors
who gave notice o f change and took out a summons
to dismiss simultaneously, whereas they ought to
have served a copy o f the notice o f change on the
plaintiff’s solicitors before they issued the summons
to dismiss under Order V II, rules 2 (1) and (6).
No damage was done to anyone by the irregularity
and the point was not raised in the Court below.
In the Court o f Appeal it was held that Order 70,
rule (1) identical in terms with Order 69, rule (1)
R.S.C. 1905 shows that non-compliance with the
rules does not render the proceedings void and
that the proceedings may be dealt with as the Court
thinks right. The right thing to do in the present
case was to ignore the irregularity.
(
b
) It was held that by analogy with the Statute
o f Limitations if a plaintiff allows an action to sleep
for six years the Court in its discretion will usually
dismiss the case for want o f prosecution in the
absence o f good reason and the reasons before the
Court were insufficient. (Krakauer
v.
Katz 1954,
1. W.L.R. 278).
f
■
Proceedings fo r damages fo r professional negligence were
contemplated against a firm o f surveyors and the claimants’
solicitors had an interview with the defendant firm to
discuss a settlement. The discussion was without prejudice
and it was arranged that the defendant firm should explore
the possibility o f obtaining an insurance policy to protect
the claimant against risks arising from defects in property
which he hadpurchased after obtaining the surveyors’ advice.
No settlement was reached and after the institution o f
proceedings the defendants in their affidavit o f discovery
claimed privilege against disclosure o f correspondence with
insurance companies and other persons and the report
prepared as the result o f the conference with the plaintiff’s
solicitors. Were the documentsprotected against disclosure
?
Yes. In Whiffen
v.
Hartwright the Judge refused
to order the production of letters passed without
prejudice observing that he did not see how the
plaintiff could get over the express agreement though
he by no means agreed that the right o f discovery
was limited to the use which could be made o f it
in evidence.
In Stotesbury
v.
Turner (1943 K .B . 370) the Court
held that nothing which is written or said without
prejudice should be looked at without the consent
o f both parties for otherwise the whole object o f
the stipulation would be destroyed. This applied
to efforts to compromise pending litigation. In
the present case the. Court held that the reports
and correspondence referred to were clearly made
as a result o f a “ without prejudice ” interview and
made solely for the purpose o f “ without prejudice ’*