Greenan (estate Ebbelaar) and Another v Commissioner for Inland Revenue, Greenan (estate Terblanche) and Another v Commissioner for Inland Revenue (537/94, 538/94) [1996] ZASCA 53 (24 May 1996)

Greenan (estate Ebbelaar) and Another v Commissioner for Inland Revenue, Greenan (estate Terblanche) and Another v Commissioner for Inland Revenue (537/94, 538/94) [1996] ZASCA 53 (24 May 1996)

The Supreme Court of Appeal held that section 19 of the Estate Duty Act imposes personal liability on an executor only for estate duty payable in respect of specific property distributed in contravention of section 18. The phrase 'in respect thereof' restricts liability to duty attributable to the property actually transferred, not to the value of the property or to duty attributable to assets never under the executor's control. Since the proceeds of the Sanlam policy were paid directly to Nedbank and never formed part of the estate assets administered by the executor, the executor could not be personally liable for the estate duty attributable to those proceeds. The respondent's...

Citation
[1996] ZASCA 53
Parties
Appellant: HA Greenan (estate Ebbelaar); Appellant: ABSA Trust Limited; Respondent: Commissioner for Inland Revenue; Appellant: HA Greenan (estate Terblanche)
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
24 May 1996
Case Number
537/94, 538/94
Procedural Posture
Civil Appeal / Appeal From the Witwatersrand Local Division; Motion Proceedings
Outcome
Appeals upheld; cross-appeals dismissed.
Judges
Van Heerden, Hefer, Harms, Scott, Zulman
Legal Topics
Estate Duty, Executor Liability, Distribution of Estate Assets, Personal Liability of Executor
Tax Law Civil Procedure Estate Duty Executor Liability Distribution of Estate Assets Personal Liability of Executor

Case Brief

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Parties

HA Greenan (estate Ebbelaar)

Appellant

ABSA Trust Limited

Appellant

Commissioner for Inland Revenue

Respondent

HA Greenan (estate Terblanche)

Appellant

Procedural Posture

Civil Appeal / Appeal From the Witwatersrand Local Division; Motion Proceedings

Legal Issues

  1. 1 Whether an executor who distributes estate assets without paying estate duty attributable to policy proceeds is personally liable under section 19 of the Estate Duty Act.
  2. 2 Whether section 19 of the Estate Duty Act imposes personal liability on the executor for duty in respect of property never in his possession or control.
  3. 3 Interpretation of the phrase 'in respect thereof' in section 19 of the Estate Duty Act.

Ratio Decidendi

The Supreme Court of Appeal held that section 19 of the Estate Duty Act imposes personal liability on an executor only for estate duty payable in respect of specific property distributed in contravention of section 18. The phrase 'in respect thereof' restricts liability to duty attributable to the property actually transferred, not to the value of the property or to duty attributable to assets never under the executor's control. Since the proceeds of the Sanlam policy were paid directly to Nedbank and never formed part of the estate assets administered by the executor, the executor could not be personally liable for the estate duty attributable to those proceeds. The respondent's...

Court Disposition

Appeals upheld; cross-appeals dismissed.

Orders

  • It is declared that neither of the applicants is liable personally to pay to the respondent the sum claimed by the respondent in respect of estate duty payable by the estate of the deceased.
  • The respondent is interdicted from entering judgment against the applicants for payment of the said estate duty in terms of section 25 of the Estate Duty Act 45 of 1955.