clr/1983/1983_3_369.pdf

(1983)its portofolio to the Universal Life Insurance Co. Ltd., the latter took over the policies issued for the members of the scheme by Gresham. The deceased became a member of the scheme on the 1st January, 1962, and until the 31st December, 1974, the day preceding his death, the contributions were as follows: By the deceased C£1,697.180 mils By the Company C£4,711.160 mils. Upon the death of the deceased a sum of C£14,598.- became payable to his legal representatives according to the amended scheme which came into force on the same day. 5 10 The respondent Commissioner decided that the aforesaid sum attracted liability to estate duty and hence this recourse: Held, that the policy in question was neither "effected" nor "kept up" by the deceased for the benefit of a donee and therefore section 7(

1. g)of the Estate Duty Law, 1962 (Law 67 of 1962) is not applicable; that since the deceased contributed towards the cost of the benefit, the beneficiary had an enforceable right to it and the beneficial interest arose in favour of the beneficiary on the employee's death; that since this was a Policy provided by the deceased in concert or arrangement with another; and that since in any event what came to the beneficiary was property that the deceased was at the time of his death competent to dispose the amount in issue is taxable under section 7(
2. h)of Law 67/62. Application dismissed. Observations with regard to the need of amendment of therelevant legislation. Cases referred to: Barclays Bank Ltd. v. The Attorney-General [1944]2All E.R.208; Re J. Bibby & Sons Ltd., Pensions Trust Deed. Davies v. Inland Revenue Commissioners [1952] 2 All E.R.483; Re Miller's Agreement [1947] 2 All E.R.78; Attorney-General v. Quixley [1929] All E.R. (Rep.) 969; Re Kilpatrick's Policies Trusts [1966] Ch. 730 at pp. 766-767. 370 30 35 15 20 25 3 C.L.R. 5 Ionides v. Republic Recourse. Recourse against the decision of the respondent to assess the estate of the deceased Loizos Rossides at C£16,182.- for estate duty purposes. L. Papaphilippou, for the applicants. A. Evangelou, Senior Counsel of the Republic, for the respondent. Cur. adv. vult. A. Loizou J. read the following judgment. By the present 10 recourse the applicants as administrators of the estate of the deceased Loizos Rossides, late of Strovolos, seek from the Court the following remedies: 15 20 25 30 "(A) A declaration of the Court that the act or decision of the respondent dated the 15th January, 1979, to assess the estate of the deceased Loizos Rossides at C£16,182.- for estate duty purposes, is null and void and of no legal effect whatsoever. (B) A declaration that the omission or refusal of the respondent to reduce the amount of the proceeds from aninsurance policy taken out on the life ofthe deceased Loizos Rossides by the Trustees of the Pension and Life Assurance Scheme of his employer from C£14,598.- to C£3,866.- ought not to have been made and that whatever has been omitted should have been performed. . (C) A declaration that the omission or refusal of the respondent to allow as a proper deduction from the value of the estate the sum of C£6,000.- which is the estimated amount of rents collected by the deceased Loizos Rossides over the years 1966-1974 from the renting of an upstairs flat of his wife, ought not to have been made and that whatever has been omitted should have been performed". The relevant facts which are simple and not in dispute are 35 these: The deceased was the Chief Accountant of Dianellos and Vergopoulos Ltd., formerly the Ardath Tobacco Co. (Cyprus) Ltd. Whilst serving with the aforesaid Company, he joined the Company's Pension and Life Assurance Scheme which wasan arrangement for thebenefit of itsqualified employ371 Λ. Loizou J. lonides v. Republic

(1983)ees in Cyprus and assured by the Gresham Life Assurance Society Ltd. Therules of thispension scheme have beenattached to the application and are exhibits 1 and 2 before me. The original rules of the scheme were those in exhibit 1 which were later amended and replaced as from the 1st January, 1975, by 5 exhibit 2 which happens to be also the date of the deceased's death which came about by a heart attack. This scheme was introduced by a Trust Deed dated 15th March, 1953, and under it both the deceased and the Company were making contri­ butions to a Provident Fund for the purpose of securing the 10 benefits provided for by the scheme for the employees. These contributions were paid to the Trustees of the Fund who took out with the Gresham Assurance Co. Ltd. assurance policies and paid therefrom the premiums on the policies of assurance issued on the life of the employees. When the said Assurance 15 Company transferred its portofolio to the Universal Life Insur­ ance Co. Ltd., the latter took over the policies issued for the members of the scheme by Gresham. The deceased became a member of the scheme on the 1st January, 1962, and until the 31st December, 1974, the day preceding his death, the contributions were as follows: By the deceased By the Company 20 C£l,697.180 mils C£4,711.160 mils. Upon the death of the deceased a sum of C£14,598 became payable to his legal representatives according to the amended 25 scheme which came into force on the same day. The issue which arises for determination now in this case is whether the aforesaid sum so paid to the estate of the deceased attracts liability to estate duty. The second question that was in issue in this recourse under relief (C) has been disposed of at the re- 30 quest of both sides in the recourse before reserving judgment upon statements made by both sides in relation thereto. Counsel for the respondent conceded that in respect of the claim by the widow of the deceased for C£6,000- which is the estimated amount of rents collected by the deceased there had 35 not been a proper inquiry into the subject and that no reasoned decision had been given. Upon that statement being made, 1 was invited by counsel for the applicant to exercise my powers under Article 146 of the Constitution and annul that part of 372 3 C.1..R. lonides v. Republic A. Loizou J. the subject decision of the respondent which related to the facts so conceded, in annulling that part of the decision I had this to say: "As 1have no reason to disagree with the statement madebycounselfor both sidesregarding thelack ofdueinquiry 5 and the absence of proper reasoning regarding the widow's claim for C£6,000.- representing an alleged debt owed to her and as this stand is born out by the document already adduced inevidence,thatpart ofthesubjudicedecisionshouldbetreated for all intents and purposes as null and void and the matter 10 should be re-examined by the respondent Commissioner of Estate Duty. 1 have followed this course so that there will beno further delay in the examination of the matter but I shall have to refer to it in my judgment which will be delivered in due course". 15 20 25 30 The grounds of law relied upon on behalf of the applicant in respect of the sole issue left now for determination are as set out in the application (Schedule 'B') the following:"1. The Respondent's actto includeinthevalue oftheestate liable toestate duty the whole amount paid on an insurance policy on the life of the deceased, the premiums on which weremet partly out of the contributions of the deceased to the Pension and Life Assurance Schemeof his employer, and partly out of the contributions to the Scheme by the Employer, is ultra vires and contrary to the provisions of para, (g)of section 7of the Estate Duty Laws, 1962-1976 and/or the Respondent acted under misconception of facts and/or of Law. 2. The inclusion in the assessable estate should have been limitedtotheproportion oftheproceedsofthelifepolicy which corresponds to the contributions of the deceased in the premiums paid. 3. 35 4. The Respondent acted under misconception of facts in thathedidnottakeintoconsiderationand/or disregarded and/or did not weigh properly the rules and regulations of the Pension Life Assurance Scheme as particularly stated in the facts hereof". The statutory provisions invoked by the two sides in support 373 \ Λ. Loizou J. loaides v. Republic

(1983)of their respective cases are paragraphs F, G, and Η of section 7 of the Estate Duty Law 1962 (Law No. 67 of 1962) which Law has been amended by Law 3 of 1976 but with which amendments we are not concerned in this case. These provisions read as follows: 5 "(στ) περιουσιακά στοιχεία περιερχόμενα εις άλλους δυνάμει συνεστηκότος ή μέλλοντος νά συσταθη καταπιστεύματος γενομένου ύ π ο τοϋ Αποθανόντος δι' έγγραφου μη έχοντος ίσχύν διαθήκης, δια του οποίου έττιφυλάττεται τ ω συστήσαντι το καταπίστευμα (settlor), ρητώς ή σιωπηρώς, 10 συμφέρον τι, Ισοβίως ή δι' Ιτέραν τινά χρονικήν περίοδον καθοριστέαν δι' αναφοράς προς τόν θάνατον, έπϊ τών τοιούτων στοιχείων ή έπϊ των εκ της πωλήσεως τούτων προκυπτόντων χρημάτων, ή διά τοϋ οποίου ό συστήσας τό καταπίστευμα έπεφύλαξεν έαυτω το δικαίωμα Οπως, ] 5 οιά της ασκήσεως οιασδήποτε εξουσίας, ανάκτηση ή άξιώση απόλυτον συμφέρον έπϊ της τοιαύτης περιου­ σίας ή τών έκ της πωλήσεως ταύτης προκυπτόντων χρημάτων: Νοείται ότι διά τοΰ; σκοπούς της παρούσης πάραγράφου, ό όρος 'καταπίστευμα' θα περιλαμβάνη τράστς (trusts) πάσης φύσεως, γενόμενα εγγράφως ή μη συστα­ θέντα προς όφελος οιουδήποτε προσώπου, και έάν ταϋτα έμπεριέχωνται έν τ ω ίδρυτικώ τοΰ καταπιστεύματος εγγράφω ανεξαρτήτως τοϋ δτι τό εγγραφον έγένετο έπϊ αντιπαροχή είτε άνευ αντιπαροχής μεταξύ τοΰ συστήσαντος τό καταπίστευμα (settlor) καΐ οιουδή­ ποτε έτερου προσώπου- 20 25 (ζ) χρήματα εισπραττόμενα δυνάμει ασφαλιστηρίου εγγρά­ φου γενομένου υπό τοϋ αποθανόντος έπϊ της ζωής του 30 όταν τά ασφάλιστρα καταβάλλωνται καθ' ολοκληρίαν ύπό τοϋ αποθανόντος προς όφελος δωρεοδόχου τίνος (αρχικού ή έκδοχέως), ή μέρος τών τοιούτων χρημάτων άνάλογον προς τά ύπό τοϋ αποθανόντος καταβληθέντα ασφάλιστρα είς περιπτώσεις καθ' ας τά ασφάλιστρα 35 καταβάλλονται μερικώς ύπό τοΰ αποθανόντος διά τό τοιούτον όφελος* (η) ετησία παροχή ή έτερον τι συμφέρον αγορασθέν ή συστα­ θέν ύ π ό τοϋ αποθανόντος, είτε μόνου είτε τη συμπράξει 374 3 C.L.R. Ionides v. Republic A. Loizoa J. μεθ* έτερου προσώπου, κατά τήν έκτασιν της αξίας τοϋ προκύπτοντος λόγω επιβιώσεως ή άλλως οφέλους έπϊ τ φ θανάτω τοϋ αποθανόντος". And in English reads: 5 10 15 20 25 30 "(

1. f)property passing under any past or future settlements made by the deceased by any instrument not taking effect as a will whereby an interest in such property or the proceeds of sale thereof for life or any other period determinable by reference to death is reserved, either expressly or by implication, to the settlor, or whereby the settlor may have reserved to himself the right, by the exercise of any power, to restore to himself or to reclaim the absolute interest in such property or the proceeds of sale thereof: Provided that in this paragraph the expression 'settlement' shall include any trust, whether expressed in writing or not, in favour of any person, and if con­ tained in an instrument effecting the settlement, whether the instrumentwas made for valuable consideration or not as between the settlor and any other person: (
2. g)money received under a policy of insurance effected by the deceased on his life where the policy is wholly kept up by him for the benefit of a donee, whether nominee or assignee, or a part of such money in proportion to the premium paid by him, where the policy is partially kept up by the deceased for such benefit; (
3. h)any annuity or other interest purchased or provided by the deceased, either by himself alone or in concert or by arrangement with any other person, to the extent of thebeneficial interestaccruingor arising by survivor­ ship or otherwise on the death of the deceased". Para, (
4. g)of the aforesaid section 7 corresponds to section 35 2(l)(
5. c)of the English Finance Act 1894 incorporating the last paragraph of section 11

(1)of the Customs & Inland Revenue Act, 1889. 375 Λ. Loizou J. Ionides v. Republic

(1983)The prerequisites of this section are that: (

1. a)the policy of insurance must be "effected" by the deceased, that is, the insurance contract must have been made by him and it is immaterial who paid the first premium (see Hanson's Death Duties, 10th Ed., p. 261, para. 618). And. 5 (
2. b)thepolicy has to be "kept up" by him. which expression implies a continuous process. In Barclays Bank Ltd. v. The Attorney-General [1944] 2 All E.R. 208, the deceased settled two policies on his life together \Q with two trust funds, upon trust, inter alia, to pay the premiums on the policies out of the income of the trust funds. It was held that the trustees were not agents for the deceased but kept up the policies as principals. Moreover, since "keeping u p " policies involves paying premiums as they fall due, the deceased f 5 could not be said to have kept up the policies merely because he had provided in advance the means to do so. As commented in Hanson's, para. 617 (supra): "Liability under this subsection by itself attaches, therefore, only if the deceased paid the premiums himself, or employed an agent 20 to pay them by means of sums provided or to be provided by him, e.g., a mandate to a banker to pay out of current balances". The effect, however, of this decision was nullified by section 76 of the Finance Act, 1948, which imposed duty on the monies payable under a policy on the deceased's life kept up, 25 under the terms of a settlement or agreement out of funds or income provided by him either directly or indirectly or out of funds provided by another under any reciprocal agreement by him (see Hanson's (supra), para. 1421, p. 963). This amendment, however, introduced by section 76 of the Act of 1948 does not appear inour law and therefore the position should be examined as it existed in England before its introduct­ ion. The nature, therefore, of the scheme under exhibit 1 has to be examined. In the first place this was contributory scheme and the legibility for membership is set out in rule 2 whereby all employees who at the date of commencement of the scheme 376 30 35 3 C.L.R. lonides v. Republic Λ. Loizou J. were within certain categories and who produced evidence of their date of birth to the satisfaction of the Assurance Society were eligible for membership of the Scheme. It appears that the deceased was eligible for membership 5 and so joined the Scheme. For employees who joined the service of the Company after the commencementof the Scheme it was a conditionof their employment that they should become members of the Scheme. Rule 3 thereof is entitled "Contri­ butions and Policies to be Effected" and each member is obliged 30 to contribute towards the cost of the Scheme by deduction from salary or otherwise in accordance with the scales set out therein. The Company having to contribute: 15 20 in respect of each Member, such further amounts as may be necessary to secure the benefits provided by the Scheme for such' Member. The contributionsfrom both Members and theCompany shall be paid to the Trustees who will utilise them as premiums on the Policy of Assurance effected with the Assurance Society onthe life of the Member in question. Such Policy of assurance shall be of a type known as a Double Endowment Assurance (without the right to parti­ cipate in the profits of the Assurance Society) and will be for such amount.as shall be sufficient to provide the benefits of the Scheme in respect of the Member. -5 Whenever a Member receives an increment in Salary then as from the next or coincident Entry Date the contributions payable shall be increased and the benefits secured by the assurance on his life shall be increased accordingly by endorsement on the assurance policy. 30 Each Member will be given a Certificate showing'the amount of the benefits secured by the assurance policy effected on his life. The actual policy will, however, be held by the Trustees". Rule 4 provides for the Benefits. 35 "The following benefits will be provided for Members: (
3. a)Pension Upon retirement at Normal Pension Date a Member shall be entitled to an annual pension of: 377 Λ. Loizou J. lonides v. Kepublk

(1983)(

1. i)Inthecase of MaleMembers,one-eightiethof Pension­ able Salary for each complete year of Pensionable Service. or (
2. ii)In the case of Female Members, one-seventieth of Pensionable Salary for each complete year of Pension­ able Service. 5 Provided that if the annual amount of such pension would belessthan£25,thenacash sum will bepaid in lieu thereof. The pension would be payable throughout the lifetime of 10 the Member by monthly instalments in advance thefirst instalment falling due at Normal Pension Date. Should the Member die before sixty monthly instalments of the pension have been paid then the pension shall continue for the benefit of the estate of the Member, until the 15 completion of such sixty instalments. (
3. b)Life Assurance Benefit If a Member dies prior to Normal Pension Date, whilst still in the active service of the Company then theamount payable under the assurance policy on that Member's life 20 in such circumstances shall be granted to the Member's legal personal representatives. The Trustees shall be entitled to require such evidence of title from the claimant as they, in their absolute discretion, may consider necessary". 25 From the various terms of the Scheme in question and taking intoconsiderationwhat was statedinBarclays Bankcase (supra) i have come to the conclusion that the Policy in question was neither "effected" nor "keptup"by the deceased for the benefit of a donee and therefore section 7(
4. g)is not applicable. In 30 other words, the contributions of the employers and the employees weregiven to thetrustees for thepurpose of securing pensions and other benefits and the trustees utilized this money whichwerethemoneyof theemployees andnotof the employers to pay the premiums. This is clear from the fact that if an 35 employee did not die prior to normal pension date the money paid both by employer and employee would come to the employee as being entitledto them as part of his salary and the 378 3 C.L.R. lonides v. Republic A. Loizou J. totality of his emoluments received by him in return of the services rendered. Having found that para, (
5. g)of section 7 of the Law does not apply, the further question arises whether this attracts an estate 5 duty under the law. It has been argued on behalf of the respondents that the amount of the insurance is taxable under sections 7(
6. h)and possibly 7(
7. f)of the Law. Section 7(
8. h)corresponds to section 21(
9. d)of the English Finance Act of 1894 which has been set 10 out earlier in thisjudgment. In the case of Re J. Bibby & Sons Ltd.,Pensions Trust Deed.Davtesv. Inland RevenueCommission­ ers [1952] 2 All E.R., p. 483, the Company adopted a pension scheme which was created by an indenture made between the company and some of its directors who were designated trustees. 15 The scheme was non-contributory, and the pensions fund was to consist of £60,000 provided by the company and such further sums as the company should thereafter provide. The fund was vested in the trustees, and was stated to be "primarily established for the benefit of retired employees of the company 20 and its predecessors in business whose character and length of service may in the judgment of the trustees entitle them to claims upon it". The trustees were to have an absolute and uncontrolled discretion in the exercise of the powers conferred on them. The Crown claimed estate duty under the Finance 25 Act, 1894, s.2(l)(d). It was held: on the true construction of the deed of 1924 (as amended), the benefits were entirely in the discretion of the trustees, and, therefore, the pension was not "property" within s.2 of the Act of 1894; the widow had no "beneficial interest" within s.2(l)(
10. d)since she had no enforceable 30 right tothepension, norwas any interest "purchased or provided" by Α., the pension being a gratuitous provision by the company without any bargain or agreement between the company and Α.; and, therefore, no estate duty was exigible. (Re Miller's Agreement [1947] 2 All E.R. 78), applied. 35 It is useful to quote here from the judgment of Harman, J. ;.t p. 486: "The Crown argues that the pension to which this widow is entitled subject to the discretion of the trustees to withdraw it in certain contingencies as, for instance, for misconduct, 379 Λ. I.oizou J . lonides v. Republic

(1983)is an item of property which accrued on thedeathof the deceased and she has a beneficial interest in it. Moreover, it is said. the annuity was provided by the deceased in the sense that, but for the fact that he was the workman of the company over his years of service, therewould have been nopension for his widow. 5 The taxpayer's answer to that is. first of all, that this is not. property at all but a mere spes or hope of getting something. and secondly, even if it is a species of property, it is not provided by the deceased. The taxpayer says that the whole of the annuity is provided by the providers of the fund, and the lideceased did not pay a penny. His work may have been the causa sine qua non of the granting of the pension, but not the causa causans. The essential provider is he who provides the money. The dead man provided nothing, nor did he bargain that anything should be provided because he had already ful- 15 filled the necessary ten years before there ever was a pension scheme and there is no evidence that he or the company ever changed either of their positions on the strength of this voluntary offer which the company made. Thirdly, says the taxpayer. that which accrued on the death of the deceased to his widow 20 was not a beneficial interest in property because it was nothing which the court would protect as such. When Iread thedeed,without travelling outsideit and looking at the fact, for instance, that everybody knows that a good employer will not see the widow of his faithful employee left 25 in the street with nothing, 1can only come to the conclusion that this is a purely discretionary trust deed. It is true it is a trust, but it is a trust under which, so far as any employee is concerned, it seems to me the trustees have an absolute dis­ cretion either to give or to withhold a pension according to 30 their views of the desirability of paying it. They are notbound, 1 think, to give any reason, nor bound to do anything but honestly consider the merits of the plaintiff's case. It is true that the plaintiff, perhaps by herself or it may be, in a represent­ ation action, might come to the court for this much assistance, 35 that she could prevent the trustees from embezzling the fund or paying it back to the company and thereby defeating what is called themain object created by cl. 7of thedeed. The whole matter is there. It is not 'Who have claims upon it?' but 'Who in the judgment of the trustees have claims upon it?', and the 40 added words about widows and children seem to me exactly 380 3 C.L.R. lonides v. Republic A. Loizou J. inpari materia for this purpose. Every person wanting a share in this fund must submit himself or herself to thejudgment cf thetrustees, and, if there was a threatened diversion of the moneys sothat the trustees could not perform their part of that 5 function I conceive the Court of Chancery might protect the fund, ormightevenadminister itbywayofscheme,but it would still remain vis-a-vis any one widow or any one ex-employee or child of an ex-employee completely discretionary in the trusteeseither to withhold or to giveany moneysat all". 10 If anything, the Schemeinour case is acontributory one and in no way discretionary in the trustees either to withhold or to give any money at all. They are bound in our case to pay over the pension or the insurance money if that eventuality arises and the employee and his beneficiaries have"a claim in 15 law and equity and they are entitled to them as having a legal right. In Green's Death Duties, 7th Ed-, p. 255,theposition issummed up as follows: 20 25 "Among the cases falling under s. 2(l)(d) are— anannuity orlumpsumpayableunder apartnershipagreement to the widow or dependant of a deceased partner -provided that the benefit can be said to arise on the deceased partner's death and that it is enforceable by the beneficiary; a benefit payable under superannuation arrangements to the widow, dependant, or nominee of a deceased employee—but only if— (a) the deceased contributed towards the cost of thebenefit; and 30 (b) the beneficiary had an enforceable right to it; and (c) a beneficial interest arises infavour of the beneficiary on the employee's death, a condition which is satisfied only if the identity of the beneficiary is notfinally determined until the death". 35 As pointed out in Halsbury's Statutes of England, 2nd Ed., Vol. 9, p. 352: "The general purpose of this provision is to 381 Λ. Loizou J. lonides \. Republic

(1983)prevent a man escaping estate duty by subtracting from his means, during life, money or money's worth, which, when he dies, are to re-appear intheform of a beneficial interest accruing or arising on his death" (per Lord Loreburn, L.C. inLethbridge v. A-G., [1907] A.C 19, at p. 23). Even if, however, my approach was found to be wrong as regards the taxability of the amount in issue under section 7(h), yet on the authority of the Attorney-General v. Quixley [1929] All E.R. (Rep.), p. 696, 1 would hold that an estate duty is attracted under section 7(a) of the law which provides that property deemed to pass on the death of the deceased shall be deemed to include the property following, that is to say, a property not belonging to the deceased of which the deceased was at the time of his death competent to dispose. 5 |0 In Quixley's case a school-teacher died and her legal personal 15 representative became entitled to receive a "death gratuity" under the School Teachers (Superannuation) Act, 1925, s.5(l). The gratuity was paid and an estate duty was claimed in respect of it. It was held by the Court of Appeal that the gratuity was property of which the teacher was "competent to dispose" 20 within the meaning of the FinanceAct 1894, s.22

(2)(

1. a)andthere­ fore, estate duty was exigible inrespect of it by virtue of s.2(l)(
2. a)of that Act. Rowlatt, J., whose judgment was affirmed on appeal, had this to say at p. 698: " Under those circumstances is this property which 25 passes on her death? Reference has been made to the Finance Act, 1894, s. 2(l)(
3. a)and (d). Section 2(l)(d), which comprises the commoncase of provisions being made by insurance, does not very readily fit this case, because as annuity or other interest purchased or provided by the 30 deceased does mean something which she has voluntarily purchased or provided, and if it is imposed on her, ί feel very great difficulty in saying that she has provided it by herself. If she had been left to herself, it is the last thing in the world that she would have done. I cannot 35 say that she has done anything by concert or arrangement with any other person when she has not had a chance of refusing or concerting, or arranging anything. But I do not think the difficulty arises, because I am in favour of 382 3 C.I.R. lonides v. Republic A. Loizou J. the Crown on s. 2(I)(a), by virtue of the definition of competency to dispose. Reading sub-s. (l)(
4. a)alone: 5 'property passing on the death of the deceased shall be deemed to include property of which the deceased was at the time of his death competent to dispose*. 10 I should not be prepared to hold that included property in the form of posthumous right to have money paid to her executors of which shecould, of course, bywill dispose prospectively after her death. I think that so far the merewords inpara, (a)point to adisposition which a man canmake at thetime of his death inthe senseof effectively while he is still alive and till the moment of death when the breath leaves his body—in other words,at his disposition inter vivos". 15 Sankey,L.J.,summed up the position as follows at p.702: 20 25 "The question to be answered here is: had the deceased at the time of her death such an interest in property as enabled her to dispose of the property by will? In my viewtheanswermustbe-that, indeed, Igatherwasadmitted by the defendant—in the affirmative. She had such an interest, and she had power to dispose of it by will, but counsel for the defendant took a point in limine which savours rather more of metaphysics than of law; he contended that, at the teacher's death, no property in fact existed, but only a conditional right or interest which had not been ascertained or quantified. I think this is a fallacy". It is clear from the facts and circumstances of this case that the deceased contributed towards the cost of the benefit, the 30 benaficiary had an enforceable right to it and the beneficial interest arose in favour of the beneficiary on the employee's death and that this was a Policy provided by the deceased in concert or arrangement with another, and that in any event what came to the beneficiary was property that the deceased 35 was at the time of his death competent to dispose. Having reached this conclusion I need not deal with the applicability of section 7(
5. f)of the Law. Before concluding, however, I must say that this case has 383 Λ. Loizou J. lonides v. Republic

(1983)not been-devoid of difficulty, particularly so in view of the constant changes of the law effected in England on which we have modelled our law, and which changes take note of the judicial interpretationsof the various sections. I find, however, comfort in the words of Diplock L.J., who in Re Kilpatrick's 5 Policies Trusts [1966] Ch. 730, had this to say at pp. 766-767: "As in nearly all appeals about estate duty, I reach my decision without confidence. Were I a betting man I should lay the odds on its being right at 6 to 4 (i.e., 3 to 2) on—or against. If ever a branch of law called for reform 10 in 1966, it is the law relating to estate duty. It ought to be certain: it ought to be sensible—it is neither. One cannot read even the score of cases which have been cited in the present case without realising that it has got into a mess from which I see no hope of the court's 15 rescuing it without drastic legislative assistance". 1 hope that the appropriate Authorities will consider a review of this legislation which no doubt has to be certain and sensible. For all the above reasons this recourse is dismissed but in the circumstances I make no order as to costs. 20 Recourse dismissedwithnoorder as to costs. 384