COUNSEL: Danckwerts for annuitants under the deeds of covenant.

Pascoe Hayward for an annuitant under the will.

Geoffrey Cross for a legatee.

Guest Mathews for the tenant for life of the residue.

 

SOLICITORS: Solicitors: Sharpe, Pritchard & Co., for Foster, Calvert & Marriott, Norwich; Woodcock, Ryland & Co.; Withers & Co.

 

JUDGE: Simonds, J.

 

DATES: 1942 Feb. 25, 26.

 

 

Background: Testator executed deeds of covenant covenanting that after his death his legal personal representatives would pay certain annuities.

 

SIMONDS J. The question is whether, in the administration of the estate of the testator, it would be proper for the estate to be distributed without provision being made for the payment of certain annuities. Such a course would be the cause of much confusion. It is true that the court will as a rule allow distribution without making provision for future contingent liabilities. That principle was stated and explained by Neville J. in In re King (1), and the practice was carried to its extreme limit in In re Johnson (2), where Crossman J. authorized the distribution of an estate without making provision for a future liability although it was not only possible but very probable. In that case there was no argument on behalf of the creditor, and I cannot help thinking that the learned judge may have been influenced by the fact that the residuary legatee, the King Edward Hospital Fund for London, could be presumed to be easily accessible and able to recoup any future liability. However that may be, I am satisfied that it would not be consistent with the practice of the court to adopt that procedure where there are covenanted sums the payment of which at a future date is not dependent on any contingency except the survivorship of the annuitants.

 

(1) [1907] 1 Ch. 72.

 

(2) [1940] W. N. 195. [*274]

 

It would be wrong to leave creditors of an ascertained sum at a future date to recover from one or more of a number of legatees who might be called on to make good the deficiency the sum which might be then due from the estate. The proper course is to direct the trustees not to distribute the estate without retaining such a sum as, when invested, would produce the amount of the annuities which the testator had covenanted to pay.