The Gazette 1975

Recent Irish Cases

A childless spouse, who, though entitled to do so, does not lake his legal right of a half-share under the Succession Act, 1965, is not liable for Estate . Duty in respect of that half share Mrs. Kathleen Urquhart died on 4th May, 1969. She was survived by her husband, Douglas Urquhart, who died on the following day, 5th May, 1969. They Were both domiciled in Ireland. Mr. Urquhart died childless, unaware of his wife's death, -and was unconscious at the time. Mrs. Kathleen Urquhart made a will on 6th April, 1967. whereby she made certain provisions if her husband survived her one month. If he survived for a lesser period, her estate worth £95,000, was to be disposed of to a number of relatives. On the same date, in April, 1967, the husband, Douglas Urquhart, made a will in similar terms relating to his wife. Arising out of Douglas's death, the Revenue Com- missioners have unconvincingly tried to contend that nothing vested in Douglas by reason of the .death of his wife, and that no property passed on his death under that head. His executors, the Provincial Bank, contend that under S . l l l ( l) of the Succession Act, 1965, Douglas was entitled as of right to a half share In his deccased's wife's estate. The Revenue Com- missioners put forward the tall proposition that under S. 118 of the Act, the half share of the wife's estate should bear its due proportion of Estate Duty paid on the wife's estate. The executors contended that Douglas had never had an opportunity to elect to take the wife's estate under S. 115 of the Act and therefore was not entitled to any share of the estate; they also contend that, as ,under the will, he did not survive his wife by a month, the gift to him under the will lapsed. The Revenue contend that the right conferred by S. I l l of the Act was a vested right which took effect immediately, and would continue to be effective unless divested by the election pro- vided for under S. 115 (4). As "there had been no election, it followed that Estate Duty should be pay- able on the half share of his wife's estate as part of estate after his death. The Succession Act, 1965, brought about a revolu- tionary change in the law of succession. Previously this had been determined by the Irish State of Dis- tribution 1695 and the Intestate Estate Act 1954. Briefly a person who died testate after 1965 could deal with his property as he thought fit. Part II of the Succession Act, 1965, comprising Sections 10 to 15, went a long distance in abolishing the difference between real and personal estate. Section III of the Succession Act operates in respect of both real and personal estate; which is reminiscent of the Custom of Ireland abolished by Section 10 of the Act of 1695. The net point is whether, under S. I l l , a spouse can

claim as of right one half of the estate, or whether the spouse has merely a right to claim one half of the estate. S. I l l (1) says clearly that the surviving spouse has a right to one half of the estate. S. 115 states that the personal representative must notify the surviving spouse in writing of his right to elect to take either a devise or bequest under the will, or the share to which he is entitled as a legal right; if there is no election normally within six months, the spouse shall be entitled to take under the will. S. 114 provides for the case where a testamentary gift to a spouse is expressed to be in addition to the legal share, and may be so devised or bequeathed. The whole of the structure of these sections is based on an implicit assumption that a legal right arises on the moment of the death of the testator. When a testator makes a devise or bequest in his will to a spouse, and it is not expressed to be in addition to the share as a legal right, then the spouse has a statutory right to take the share as a legal right, but the share does not vest until he takes it. The right to take the legal share requires a "taking" to vest the share in the spouse. This may be an actual taking by express election, or a constructive taking, by dealing with the legal share in an incon- sistent manner. If the death of the spouse takes place before an election is made, then the legal share does not form part of the spouse's estate, because the spouse before death had done nothing to take the share as a legal right. Under S. 115, the surviving spouse is entitled to take the share as a legal right, but it must be taken. Where there is no "taking" of the property, there is no competence to dispose of it. Penrose's case — (1933) 1 Ch. 793 — is no authority for the proposition that, if at the time of death, the deceased possessed the ability to make property his own by exercising an option or an election, then, whatever his wishes or action in the matter, the property must be deemed to pass on his death. The Finance Act 1894 never contemplated that Estate Duty would be payable in' respect of property which a person could obtain by exercising an election—and nevertheless foregoing a testamentary disposition in respect of the property not passing bv the will, where in fact no such election was ever made. It follows that at the date of his death, Douglas was entitled to take the half share of his wife's estate as a legal right, but, as he did not in fact do so before his death, this was not property which he was competent to dispose of for the Estate Duty purposes. Kenny J.'s decision is accordingly reversed, and the appeal allowed. (The Revenue Commissioners v. Provincial Bank of Ireland—re Douglas Urquhart Deed.—Supreme Court —Majority judgments by Fitzgerald C. J. and Walsh J. — Dissenting judgment by Henchv J. — Separate judgments by each Judge — unreported 30th Julv, 1974.)