De Little v Byrne [1951] HCA 62

Procedural Posture

Appeal in an Originating Summons Concerning Administration of an Estate / Appeal From Answers to Questions Made by the Supreme Court of Victoria (dean J.)

Legal Issues

1. 1 ['Whether the rule in Howe v. Earl of Dartmouth applied so that certain estate assets should be notionally converted and the life tenants confined to notional income from authorized investments.' "How the estate's share of partnership profits and losses was to be treated as between capital and income." "Whether the widow's annuity was payable only out of income of each successive year, or whether arrears were payable from future income or corpus." "Whether the daughters as life tenants were entitled to actual income from company shares and the testator's share in his father's estate."]

Ratio Decidendi

The will, particularly the provision making the widow's annuity payable from net annual income including income pending sale and clause 20 requiring annual accounts of actual income and expenditure, showed an intention to exclude the rule in Howe v. Earl of Dartmouth. The actual net annual income of the estate was therefore applicable first to the widow's claims, then to the Drayton Taylor payment if applicable, and thereafter equally among the four daughters as life tenants. The partnership interest was a self-contained asset: only amounts the trustees were entitled to receive as drawings on account of profits under clause 29 of the partnership deed formed estate income, while...

Court Disposition

Appeal allowed.

Orders

• ['Set aside so much of the order of the Supreme Court as answers questions 1 to 7 in the originating summons.' 'Question 1 answered: For the purpose of ascertaining the income of the estate, both profits made and losses incurred by the partnership are to be disregarded save that amounts which the trustees are...