Inland Revenue Commissioners v. Stype Investments (Jersey) Ltd., [1981] Ch. 367

[1981] 	

	 		
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	[CHANCERY DIVISION] 		

	INLAND REVENUE COMMISSIONERS v. STYPE INVESTMENTS 		
	(JERSEY) LTD. 		

	[1980 C. No. 8322] 		

	
1981 Feb. 23, 24, 25, 26, 27; March 12 	

		
Goulding J. 	

	

	Executor and Administrator - Executor - Executor de son tort - No grant of probate in England - Defendant resident out of jurisdiction holding land as nominee for deceased during lifetime - Sale of land on instructions of deceased - Deceased's death before completion - Defendant removing proceeds of sale out of jurisdiction - Whether removal amounting to intermeddling - Finance Act 1975 (c. 7), ss. 25 (6) (a), 51 (1) 		

	C. conveyed land in England to the defendant, a company resident in Jersey, to hold as nominee for himself. In accordance with his directions the defendant sold the land, completion of the sale being fixed to take place on September 28, 1979. On July 26, 1979, C. died. Completion of the sale of the land took place as arranged but as there was no duly constituted personal representative in England, the defendant was obliged to receive and retain the purchase money. The defendant requested the purchasers to remit the purchase money direct to its bank account in Jersey. The Inland Revenue Commissioners sought to determine the amount of capital transfer tax chargeable in respect of C.'s unsettled estate, of which the purchase money represented the greater part. They obtained leave, pursuant to R.S.C., Ord. 11, r. 9, to serve an originating summons on the defendant in Jersey claiming, inter alia, an account for the purpose of ascertaining the amount of tax due on the basis that the defendant was a personal representative within the meaning of sections 25 (6) (a) and 51 (1) of the Finance Act 1975. 1		
	On the question whether, by causing the proceeds of sale of the land to be removed out of the jurisdiction to its own place of residence the defendant had made itself liable as an executor de son tort within the meaning of section 25 (6) (a) of the Act of 1975:- 		
	Held, that the liability of the defendant to C.'s estate was unaffected by the local situation of the money since C.'s personal representatives in England, when duly constituted, would be entitled to it, and the act of removing the money out of the jurisdiction of the English court to be held in suspense at the defendant's place of residence did not of itself effect a change of title, nor did it denote an assumption of the authority, or an intention to exercise the functions of an executor or administrator; that, accordingly, the defendant had not been brought within the language of section 25 (6) (a) of the Act and the Crown had failed to show that the case was a proper one for service out of the jurisdiction (post, pp. 382F - G, 383A - B). 		
	New York Breweries Co. Ltd. v. Attorney-General [1899] A.C. 62, H.L.(E.) distinguished. 		
	1 Finance Act 1975, s. 25 (6) (a): see post, p. 377D. 		
	S. 51 (1): "... personal representatives' includes ... any such person mentioned in section 25 (6) (a) of this Act." 		

 
	
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	The following cases are referred to in the judgment: 		

	Hooper v. Summersett (1810) Wight. 16. 		
	New York Breweries Co. Ltd. v. Attorney-General [1899] A.C. 62, H.L.(E.). 		
	Serle v. Waterworth (1838) 4 M. & W. 9. 		

	The following additional cases were cited in argument: 		

	Atkins v. Davis (1783) Cald. 315. 		
	Bayne v. Slack (1857) 3 C.B.N.S. 363. 		
	Bird, in re, Ex parte The Debtor v. Inland Revenue Commissioners[1962] 1 W.L.R. 686; [1962] 2 All E.R. 406, C.A. 		
	Dodd's Case (1858) 2 De G. & J. 510. 		
	Rex v. Gardner (1774) 1 Cowp. 79. 		
	Siskina (Owners of cargo lately laden on board) v. Distos Compania Naviera S.A. [1979] A.C. 210; [1977] 3 W.L.R. 818; [1977] 3 All E.R. 803, H.L.(E.). 		
	Stewart Chartering Ltd. v. C. & O. Managements S.A. (Practice Note)[1980] 1 W.L.R. 460; [1980] 1 All E.R. 718. 		
	Tyne Improvement Commissioners v. Armement Anversois S.A. (The Brabo) [1949] A.C. 326; [1949] 1 All E.R. 294, H.L.(E.). 		
	Vitkovice Horni A Hutni Tezirstvo v. Korner [1951] A.C. 869; [1951] 2 All E.R. 334, H.L.(E.). 		

	MOTION 		
	On September 12, 1980, on application to the vacation judge (Dillon J.) under section 14 of the Crown Proceedings Act 1947, the plaintiffs, the Inland Revenue Commissioners, were given leave to issue an originating summons, and to serve notice of the summons on the defendant, Stype Investments (Jersey) Ltd., out of the jurisdiction, at Dow Street, St. Helier, Jersey, pursuant to R.S.C., Ord. 11, r. 9. The defendant meanwhile was to be restrained until further order from removing any of its assets from within the jurisdiction of the court. By an originating summons dated September 15, 1980, issued pursuant to the court's order dated September 12, the plaintiffs claimed against the defendant (1) an order, pursuant to, inter alia, section 25 (6) (a) and 51 (1) of the Finance Act 1975 and paragraphs 2 and 39 (1) of Schedule 4 to the Act, for delivery of an account of property forming part of the estate of Sir Charles Clore at the date of his death on July 26, 1979; (2) an order pursuant to paragraph 39 (2) of Schedule 4 for the delivery of books, papers and other documents supporting that account; (3) an injunction restraining the defendant from removing any of its assets from within the jurisdiction until delivery of the account, and any capital transfer tax shown to be due, and for which the defendant was liable, had been paid. 		
	On October 7, 1980, Fox J. ordered that the defendant be restrained until after the determination of the originating summons from removing any of its assets from within the jurisdiction of the court. 		
	On November 14, 1980, the defendant gave the plaintiffs notice of motion seeking an order discharging the order of the vacation judge of September 12, 1980, and asking that the originating summons issued 		

 
	
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	pursuant to that order and subsequent proceedings, including Fox J.'s order, be set aside or discharged accordingly. The grounds of the application were that leave to serve process out of the jurisdiction ought not to have been given under R.S.C., Ord. 11, r. 1 having regard to the privileges and immunities granted to the inhabitants of Jersey by Royal Charters and Orders in Council governing constitutional relations between the United Kingdom and Jersey; alternatively, that a good arguable case had not been made out for the relief sought; alternatively, that for other reasons the case was not a proper case for service out of the jurisdiction. 		
	The facts are stated in the judgment. 		

	Leolin Price Q.C. and P. W. E. Taylor for the defendant. The defendant company asks that the order of the vacation judge dated September 12, 1980, which gave the Crown leave to serve its originating summons out of the jurisdiction, should be set aside. The summons under R.S.C., Ord. 11, r. 9, is merely a procedural one asking for compliance with certain statutory obligations under the Finance Act 1975 as to the filing of accounts and delivery of documents; there is no substantive claim for capital transfer tax which might be due on the death of Sir Charles Clore, but the Crown says the defendant company has so intermeddled with the effects of Sir Charles's estate as to be brought within the statutory provisions and to become liable in the United Kingdom as an executor de son tort on the whole of the assets transferable on his death. For that claim to be tried, the Crown will first have to show that it has a good arguable case which means something more than a merely arguable case; the second difficulty for the Crown will be that, under the ancient privileges granted to the inhabitants of Jersey, there is immunity from process and immunity from taxation. 		
	The defendant company says that at all times after the contract for the sale of land in Herefordshire, which the company concluded as bare trustee for Sir Charles, it was accountable to him in respect of rights arising under that contract, and his death made no difference to the performance of the company's obligations under the contract. After his death, the company was accountable for the proceeds to his estate in Jersey; the specific assets here were the rights under the contract for the sale of the land; they were not changed as to title by anything that happened after his death. 		
	The question is whether that transaction and the events connected with it involved an intermeddling with the estate as claimed by the Crown. [Reference was made to the capital transfer tax provisions in sections 19-25 of the Finance Act 1975.] Under section 25, subsections (5) and (6), the acts which are said to make the defendant company liable as trustee are those by which the contract was entered into. By section 51, the interpretation section, an intermeddler can also be a personal representative under section 25 (6) (a). 		
	[On service of process out of the jurisdiction, reference was made to R.S.C., Ord. 11, r. 1 (1) case (o) allowing service "in respect of" a claim by the Inland Revenue Commissioners for capital transfer tax, also to note 4 to the rule, giving a summary of the principles on which leave to serve out of the jurisdiction is granted, and the cases there 		

 
	
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	cited: Tyne Improvement Commissioners v. Armement Anversois S.A. (The Brabo) [1949] A.C. 326; Vitkovice Horni A Hutni Tezirstvo v. Korner [1951] A.C. 869 and Siskina (owners of cargo lately laden on board) v. Distos Compania Naviera S.A. [1979] A.C. 210.] 		
	The facts of this case are not in dispute but there will be a dispute as to the motive for transferring assets to Jersey. The court should bear The Brabo [1949] A.C. 326 in mind in exercising its discretion in the circumstances of this case. All the Crown is asking for in the originating summons is an order for an account of all property forming part of the estate and an order for delivery of documents required by statute, the purpose being to enable the Crown to claim - if it is able to claim - capital transfer tax from the defendant company. Looking at the summons, it is possible to say it does not fall naturally within R.S.C., Ord. 11, r. 1 (1) case (o) but more naturally within case (i) because there a person can be required to do something within the jurisdiction, e.g. deliver an account and books and papers. 		
	We are here concerned basically with whether capital transfer tax is payable and, the defendant not residing within the jurisdiction of the court, whether it comes within the statutory provisions making it liable or accountable to the Crown. If the court, looking at case (o) and case (i), decides that what is said about the statutory provisions is right, it ought to be very chary about the exercising of discretion by reference to (i) which is truly ancillary to the determination of liability for and collection of capital transfer tax. 		
	The Crown is saying that the defendant, since Sir Charles's death, acted in such a way in relation to his property as to become liable under section 25 (6) (a) of the Act of 1975, but what had to be done by the defendant as trustee was done outside the executorship: the completion of the contract and the receipt by the defendant of the purchase money did not involve any intrusion into the duties of an executor. [Reference was made to Williams & Mortimer, Executors Administrators and Probate (1970), pp. 40, 41, and to section 28 of the Administration of Estates Act 1925.] It is said the defendant did something on the footing of executor and that it did so wrongfully. Under section 28 the defendant cannot be said to have acted so as to release any debt due to the estate. There is no room for the operation of the principle of liability as an executor in his own wrong, whether it be under common law or statutorily under section 28. The extent of liability is restricted. 		
	If it should be argued that what the defendant did by completing the contract with the purchaser was sufficient to make it an executor de son tort, the answer would be that there could be nothing wrong in the receipt of money due, and if it is said the defendant acted as agent for a principal, the answer would be that the character in which the defendant acted was distinct from that of a mere agent and could properly be categorised by an English lawyer as that of a bare trustee in possession of a legal asset. [Reference was made to Williams & Mortimer, Executors Administrators and Probate, p. 45, and New York Breweries Co. Ltd. v. Attorney-General [1899] A.C. 62, 72.] At all times until completion the defendant had possession of its rights under the 		

 
	
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	contract for the particular purpose of accounting to the beneficiaries for the proceeds. In taking possession of and administering the assets at completion, nothing was done in relation to the proceeds of sale which created a fresh title in another party nor did it change the title in any manner which would have made the defendant liable to anyone else. [Reference was made to Williams & Mortimer, Executors Administrators and Probate, p. 41, and to Hooper v. Summersett (1810) Wight. 16 and Serle v. Waterworth (1838) 4 M. & W. 9. 		
	The defendant therefore says the Crown has not made out an arguable case for service out of the jurisdiction. 		
	The alternative basis for the defendant company's application to the court is its immunity from English process and from taxation because of the privileges granted to the inhabitants of Jersey by Royal Charters which govern constitutional relations between Jersey and the United Kingdom. Matters arising in Jersey are matters for the Jersey court. That is the case here where the defendant is called on to deliver an account to the Crown over property. Accountability would be enforceable against the defendant in Jersey where its books and documents are. The immunities from process and from taxation are of a special kind but they nevertheless come into operation in the same way as here. 		
	So the defendant says there is nothing about the discharge of the deceased's moneys which makes it liable as executor, and the court is invited, on the intermeddling point, and as the principal support of the defendant's application, to say that the Crown has failed to establish a case within the statutory provisions of the Act of 1975. If the defendant is mistaken about that, the court should hesitate long before exercising the discretion given to it, for it ought not to be exercised where intermeddling - if any - is so implausible. Unless the court can find possession as executor, disposal of property as executor, or intermeddling as executor, there is no room for saying that the defendant should have been compelled in this country to comply with the statutory requirements of the Act of 1975. 		
	On the other side of the case arising from the Royal charters giving immunity from process here, the defendant as an inhabitant of Jersey is naturally and properly accountable in Jersey for the moneys now in a bank in Jersey. [Reference was made to Dodd's Case (1858) 2 De G. & J. 510 where process had been served by one Jersey inhabitant on another under the Common Law Procedure Act 1852, which made legal a writ for service abroad]. On a habeas corpus, charter privilege was expressly raised before the Royal Court. The substance of charter immunity is that an inhabitant shall not be drawn into any process. The Act of 1852 managed things by section 18 in a manner which treated service or admitted service of a writ on residents out of the jurisdiction as a matter inconsistent with the exercise of discretion. There was no distinction between any country outside England, the exceptions being Scotland and Ireland. Under section 19 there was no exception at all but the substantive time for consideration under section 18 is the time when the ancient charter was infringed or when the time for process arose. 		

 
	
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	Dodd's Case, 2 De G. & J. 510, is not authority for any proposition that the issue of the writ and its service was more than a preliminary matter to an important hearing under the statutory arrangements then in force, and the question of the charter privileges of Jersey would surely have been an important matter. [Reference was made to the service of process and the reciprocal enforcement of judgments under Jersey laws enacted in 1960 and sanctioned by the Privy Council.] It would be wrong to assume that Dodd's Case is a decision on the charter now referred to. The reciprocal Jersey law of 1960 does not refer to charter rights [Reference was made to Rex v. Gardner (1774) 1 Cowp. 79 and Atkins v. Davis (1783) Cald. 315.] 		
	Summarising the defendant company's case: (1) there was nothing in the nature of intermeddling to bring it within the ambit of the provisions in the Act of 1975 making persons liable to account for tax; (2) there is charter immunity which is available to the inhabitants of the island of Jersey, and the defendant, if liable, could only be liable in Jersey as a trustee for the money owed to the estate. As to accounts and papers, its office in Jersey is the only place where they could be produced. As to the island's charter immunity in respect of taxation, it cannot be said that such a charter ever gave exemption from Parliamentary legislation, for tax could be levied in terms which would override the old charter privileges: see section 525 of the Income and Corporation Taxes Act 1970. One looks in vain for such a provision in the Finance Act 1975 and the defendant says that Parliament has not overridden the privileges granted to Jersey as mentioned in the charter. 		
	The case is of great constitutional interest for people in Jersey and particularly with matters arising out of Sir Charles's death, but it is not a case that ought to be subjected to the process required by the Crown's originating summons. Further, the injunction in the nature of a Mareva injunction which was asked for in the summons seems to be stretching matters too far. [Reference was made to Stewart Chartering Ltd. v. C. & O. Managements S.A. (Practice Note) [1980] 1 W.L.R. 460.] 		
	What is claimed is truly a claim for tax and not a claim "in respect of" tax. 		
	Peter Gibson for the Crown. The Crown will follow the order of the defendant company's submissions and deal first with whether a good arguable case is made out by the Crown and, secondly, with whether the charter immunities apply to the defendant as an inhabitant of Jersey. 		
	As to the capital transfer tax provisions of the Finance Act 1975, see section 45 on domicile, and the provisions in Schedule 4, paragraphs 2 (1) and 39, relating to delivery of an account of property. Sir Charles Clore had only a financial connection with Jersey. In paragraph 2 (2) of the Schedule the relevant property for the account is all property which formed part of the deceased's estate immediately before his death. 		
	Leave to serve the originating summons out of the jurisdiction was granted under R.S.C., Ord. 11, r. 9. It was issued pursuant to section 14 of the Crown Proceedings Act 1947 as amended for the purposes of capital transfer tax. The relevant rules of court are under R.S.C., Ord. 77, r. 8. 		
	As to the application of the rule for service out of the jurisdiction, 		

 
	
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	the notes in The Supreme Court Practice 1979, p. 81, set out the principles on which leave is granted and the need for a plaintiff to make out a good case. The Crown says that even ir the intermeddler has intermeddled innocently, that does not matter if in fact he has intermeddled: New York Breweries Co. Ltd. v. Attorney-General [1899] A.C. 62. On the principles for granting leave, see Tyne Improvement Commissioners v. Armement Anversois S.A. (The Brabo) [1949] A.C. 326, 337, 351, 358 and 360. The court there was putting the test on the basis of whether the action was bound to fail; and see Vitkovice Horni A Hutni Tezirstvo v. Korner [1951] A.C. 869, 881, 883 and 885. So, if the court finds the chances of the Crown's success are negligible, then that leave should not have been granted. The Crown must bring itself within one or other of the cases enumerated in R.S.C., Ord. 11, r. 1 (1). The Crown relies on case (o), alternatively on case (i). in case (o) the words "in respect of a claim" are words of wide import. The claim is for capital transfer tax. Section 35 (2) (a) of the Crown Proceedings Act 1947 requires provision to be made by rules of court for providing service of process against persons not resident in the United Kingdom. R.S.C., Ord. 11, applies to all proceedings by the Crown. 		
	[The salient facts were given concerning the necessity for determining liability for capital transfer tax on the basis that Sir Charles Clore had an English domicile and reference was made to the defendant company's transfer of the proceeds of sale of the English estate out of the jurisdiction to a bank in Jersey]. The inference to be drawn from the evidence before the court is that at the time of the transfer to Jersey, the executors would look for payment in Jersey and that the persons who would make title on behalf of the estate would be the Jersey representatives. The defendant had relied on the absence of title being passed to any other person but that would make no difference to intermeddling if property is removed from the jurisdiction with the intention and effect that title would pass to foreign representatives where there is a different legal system. 		
	As to the law on intermeddling, the basic principles are that where a person not lawfully appointed executor or administrator intrudes by his own act on the affairs of the deceased, he may be treated as an executor de son tort. Any act which if done by an executor named in the will would preclude him from renouncing probate would, if done by a person not so named, make him an executor de son tort. The authorities show that the slightest intermeddling with assets of the deceased is in principle sufficient to create liability: see Halsbury's Laws of England,4th ed., vol. 17 (1976), paras. 702 and 754 and New York Breweries Co. Ltd. v. Attorney-General [1899] A.C. 62 (which shows the position in law of a nominee or bare trustee); see also Lewin on Trusts, 16th ed. (1964), p. 279 in support of the proposition that a nominee is a mere name or dummy for another person and is unable to exercise any control over the property of which he is nominee. When the owner dies, the nominee is entitled to put the money he holds in a safe place, which includes on deposit. That is as far as he can go. Certain consequences arise on the death which affect creditors of the deceased or beneficiaries 		

 
	
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	under the deceased's dispositions or under the law of the country where the property is held. There could also be liability in relation to the administration of the property. If the property is moved out of the jurisdiction, that subjects it to the laws of another country and the consequences will then depend on the law of that country. It is a very strong thing for a person to remove assets from one jurisdiction to another following the death of the beneficial owner and the consequences can be serious, particularly in the country from which the assets are released. The doctrine of executor de son tort looks to rights which arise on a death - in relation to creditors as well as beneficiaries. 		
	As to the defendant's claim to immunity from English process, the claim is under the charter giving immunity from tax to inhabitants of Jersey in respect of matters arising in Jersey. The Crown says (1) even if the immunity under the charter is still extant and has not been affected by Acts of Parliament, these proceedings do not concern or touch any matter or cause arising in Jersey; (2) any such immunity must yield to an Act of Parliament and rules made thereunder which expressly or by necessary implication allow service of English process in Jersey. R.S.C., Ord. 11 plainly contemplates service in Jersey. The immunities in the charter may still persist if not affected by an Act of Parliament. The immunities are not complete; prerogatives of the Crown are not affected. [Reference was made to the language of the charter.] The defendant has said that the cause of action arises in Jersey because the defendant is a Jersey company and is called on to deliver an account of the property of the deceased and books and papers in support, but the defendant is confusing the cause of action with the relief claimed. The cause of action in the present case is the intermeddling with the proceeds of sale by their transfer out of the jurisdiction of the English court, and that gives the Crown the right to claim from the intermeddler. The fact that they are now in Jersey does not make the matter a cause of action arising in Jersey. The "cause or matter" arises under English statutes. The language of the charter fits ill with the proceedings before this court. The relationship with Jersey is only a consequential matter; the "cause or matter arising" within the Island is plainly not there. 		
	The immunity given to Jersey by charter is subject to the supremacy of Parliament. [Reference was made to the Common Law Procedure Act 1852; The Crown Suits Act 1865; the Supreme Court of Judicature (Consolidation) Act 1925; the Administration of Justice Miscellaneous Provisions) Act 1933 and the Crown Proceedings Act 1947.] In 1976, case (o) under R.S.C., Ord. 11, r. 1 (1) appeared. There are references to the Channel Islands in rr. 1 (2), 3 (1) and 6 (1) (a). See also In re Bird, Ex parte The Debtor v. Inland Revenue Commissioners[1962] 1 W.L.R. 686, 689 and 690, an illustration of service effected in Jersey relating to a fiscal liability. 		
	In considering immunity from taxation - first as a matter of language - the court should not construe the language of the charter as extending to modern imposts under an Act of Parliament. In any event it is doubtful whether the immunities would have applied in respect of a fiscal liability such as now in issue where it is not the property of the inhabitant which is 		

 
	
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	the subject of the tax but the estate of some other person domiciled in England. The tax we are now concerned with was not within the con-templation of the Elizabethan charter granted, nor was the sort of liability being claimed by the Crown in the present case. 		
	Article 3 (2) of the Double Taxation Relief (Taxes on Income) (Jersey) Order 1952 (S.I. 1952 No. 1216), controls the taxability of income and profits of Jersey residents where there is a possible tax charge. The Crown says such an agreement is inconsistent with the immunity asserted by the defendant company: see also the Finance Act 1975 which contains three references to the Channel Islands and section 49 of the Finance Act 1977 which contains an amplification of section 45 of the Act of 1975 under which certain persons are deemed to be domiciled at a point of time. The consequence is that a person may be an inhabitant of the Islands but nevertheless he is treated for the purposes of the statute as being domiciled within the United Kingdom whether holding property in the Channel Islands or elsewhere. The second reference to the Channel Islands in the Act of 1975 is in Schedule 7, paragraph 5, where there is an express exemption from section 45; it is an express but limited exemption. The third reference is in Schedule 8, paragraph 10. The Act of 1975 clearly had the Channel Islands in mind. As against that, the defendant puts section 525 of the Income and Corporation Taxes Act 1970 (privileges which give no exemption from income tax) and seeks to draw the inference that the absence of corresponding words in the Act of 1975 still means that the charter immunities are applicable. Section 525 of the Act of 1970 goes back to the Income Tax Act 1842, which by section 187 conferred exemption from income tax. It is unsafe to draw any inference from the Act of 1970. 		
	Price Q.C. in reply. Two observations should be made on the Crown's reference to the Double Taxation Arrangement on any curtailments of charter privileges - if there are any they are temporary and last only for the duration of the agreement. It would not appear that there is in this Double Taxation Arrangement any warrant at all for the proposition that the charter immunities are erased as regards the claim in respect of capital transfer tax put forward, or the claim to information and an injunction as presented in the Crown's originating summons. 		
	The provisions of section 45 of the Finance Act 1975 do not appear to be a necessary invasion of charter privileges. The reference in paragraph 5 of Schedule 7 to the Act of 1975 does not necessarily mean that privileges are cut down at all; neither does the reference in Schedule 8, paragraph 10, mean that the defendant here is in any way affected. It is no use saying that because Parliament has said that there is to be no exemption from income tax in the Income and Corporation Taxes Act 1970, an entirely new concept of taxation has arisen and for that there is no need to borrow from the provisions of section 525 of the Act of 1970. It was not thought necessary to override charter privileges in respect of capital transfer tax. In Bayne v. Slack (1857) 3 C.B.N.S. 363 a writ of summons issued under section 18 of the Common Law Procedure Act 1852 was served on a British subject residing out of the jurisdiction in Jersey. 		

Cur. adv. vult. 	

	

 
	
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	March 12. GOULDING J. read the following judgment. The late Sir Charles Clore died in London on July 26, 1979. I shall refer to him simply as "Sir Charles." It is common ground that he was a very rich man. Unfortunately, his testamentary dispositions are under attack in the courts both of Monaco and of Jersey, and those who claim to be the executors of his last will have, as yet, been unable to proceed very far with the administration of his estate. The plaintiffs in this action, namely, the Inland Revenue Commissioners, find that, more than 18 months after his death, no steps have yet been taken to constitute a legal personal representative of Sir Charles in England or elsewhere in the United Kingdom. The Crown is thus impeded in the performance of its duty to determine the amount, and to exact payment, of any capital transfer tax chargeable on his death. Its anxiety is all the greater because it seems probable on the facts that (subject to specific statutory exemptions) the value of all Sir Charles's unsettled estate, wherever situate, is chargeable to capital transfer tax, yet a large part of such estate, as well as other assets that may be so taxable on his death, is located outside the United Kingdom. It is said by the Crown that Sir Charles's outstanding liabilities to creditors in the United Kingdom exceed in value the assets of his estate at present within the Kingdom. 		
	The defendant to the action is a company called Stype Investments (Jersey) Ltd., which was incorporated, and has at all material times been resident, in Jersey. The defendant is possessed, in circumstances which I shall soon have to narrate, of a large sum of money which forms part - probably the greater part - of Sir Charles's unsettled estate. 		
	Because of the litigation I have mentioned the defendant is, as yet, unable to get a good receipt for that money from duly constituted personal representatives of Sir Charles. In those circumstances the Crown, on September 12, 1980, obtained leave, pursuant to R.S.C., Ord. 11 to issue an originating summons and to serve it on the defendant in Jersey. By the motion upon which I am about to give judgment, the defendant applies to the court to set aside the order of September 12, 1980, authorising the Crown to issue and serve the originating summons, and all the subsequent proceedings. 		
	By the originating summons the Crown claims three heads of relief. Put shortly they are as follows: (1) delivery by the defendant of an account for purposes of capital transfer tax of all property comprised in Sir Charles's estate at his death; (2) delivery by the defendant on oath of documents in support of such account; and (3) an injunction restraining the defendant from removing or dealing with its own assets within the jurisdiction of the court until the account has been delivered and any tax and interest due from the defendant has been paid. 		
	Leave to serve the summons out of the jurisdiction was given under R.S.C., Ord. 11, r. 9. I need not consider whether or not the case falls within paragraph (2) of the rule, since Mr. Gibson, for the Crown, agrees that he must show its claim is within one or other of the cases enumerated in R.S.C., Ord. 11, r. 1 (1). He relies principally on case (o), saying that the action is brought in respect of a claim by the Crown for capital transfer tax. He relies also on case (i) submitting that all 		

 
	
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I.R.C. v. Stype Investments Ltd. 	

		
Goulding J. 	

	

	three heads of the relief claimed seek an order requiring the defendant to do or refrain from doing something within the jurisdiction. Mr. Leolin Price, for the defendant, took a preliminary objection that there is as yet no actual claim by the Crown for capital transfer tax. All it is seeking at present is the performance of statutory obligations, alleged to be binding on the defendant, intended to enable the Crown to formulate and quantify a claim for tax. Therefore, it is argued, the present action is not brought in respect of a claim for tax. This contention, although to me attractive, requires, in my judgment, too pedantic a construction of the material part of R.S.C., Ord. 11, and I reject it. In any case the Crown, in my opinion, brings itself within case (i) in rule 1. 		
	I proceed, therefore, to examine the basis of the Crown's claim against the defendant. I need not take time to go through the relevant provisions of the Finance Act 1975, for it is common ground that to obtain the relief it seeks the Crown must, on the hearing of the originating summons, show that the defendant is, in relation to Sir Charles, within the definition of personal representatives contained in section 51 (1) of the Act by reason of being such a person as is mentioned in section 25 (6) (a) thereof, that is: 		

	"... any person who takes possession of or intermeddles with, or otherwise acts in relation to, property so as to become liable as executor or trustee (or, in Scotland, any person who intromits with property or has become liable as a vitious intromitter)." 		

	The primary facts whereby the defendant is alleged so to have intermeddled with property of Sir Charles as to become liable as an executor are not in dispute, save that (as will appear) the Crown does not accept the defendant's evidence regarding its motives in effecting the material transaction, and intends to challenge it in the course of the proceedings if they are allowed to go ahead. In my view (as will also appear) there is enough before the court at this stage to enable me to decide whether the Crown is right in law in treating the defendant as a person within section 25 (6) (a) of the Act of 1975, and on the authorities relating to R.S.C., Ord. 11, I conceive that it is my duty to do so. I must, therefore, set out shortly the history on which the Crown bases its case. It is common ground that the test to be applied is that of the general law relating to the character of an executor de son tort. 		
	The defendant was very closely connected with Sir Charles during his life and is equally closely connected with his estate. Its share capital is held on the trusts of a settlement made by Sir Charles in February 1979 under the laws of Jersey. Sir Charles retained a life interest under the settlement, with remainder on trusts for the benefit of charitable institutions, though not necessarily charitable in the technical sense of English law. The directors of tl e defendant during Sir Charles's life-time were himself, three professional friends or advisers of his, and the manager of Lloyds Bank Trust Company (Channel Islands) Ltd., Mr. J. K. Dobbs. None of them was resident in the United Kingdom and only Mr. Dobbs was resident in Jersey. Mr. Dobbs's employer, Lloyds Bank Trust Company (Channel Islands) Ltd., was and is, secretary of 		

 
	
[1981] 	

	 		
378 	

	
	
Ch. 	

		
I.R.C. v. Stype Investments Ltd. 	

		
Goulding J. 	

	

	the defendant. The day to day conduct of its affairs has clearly rested at all material times very largely in the hands of Mr. Dobbs. The three professional gentlemen I have mentioned are the executors named in what is alleged to be the last will of Sir Charles dealing with all his property, wherever situate, outside the Principality of Monaco. One of them, counsel has stated, has since renounced the office of executor and resigned as a director of the defendant. 		
	In 1961 Sir Charles acquired a large landed estate in Herefordshire from the Board of Governors of Guy's Hospital. As enlarged by certain subsequent acquisitions by Sir Charles, and diminished by certain sales or other dispositions on his part, that property appears to have been known to his advisers as the "Guy's estate," and I shall so refer to it. By a conveyance dated May 23, 1979, Sir Charles conveyed the Guy's estate to the defendant in fee simple. The conveyance discloses no consideration except certain covenants by the defendant to indemnify Sir Charles from liabilities affecting the property, and declares no express trust. By a contemporaneous deed, however, made between the defendant and Sir Charles, an intention was declared that no beneficial interest in the property should pass to the defendant, and that the defendant should hold it as a bare nominee for Sir Charles. This instrument contained an acknowledgement by the defendant of Sir Charles's beneficial ownership and its undertaking to convey the property as he should direct and to account for the future net proceeds of sale and net rents and profits thereof, subject to the defendant's right to pay outgoings from the rents. Sir Charles, however, requested the defendant itself to sell the Guy's estate to the Prudential Assurance Co. Ltd. ("the Prudential"). The defendant acceded to that request and effected the sale in its own name as the legal landowner. For convenience the contract between the defendant and the Prudential was contained in two documents, each referring to the other, relating to different parts of the Guy's estate. The aggregate purchase money was £20,500,000 and a deposit of £1,025,000 was paid by the Prudential to the defendant's solicitors in London as stakeholders. The completion date stipulated in each document was September 28, 1979. I may observe that, after the sale to the Prudential, it was, in my opinion, no longer accurate to describe the defendant as a bare nominee for Sir Charles. The defendant had now assumed the active duty of completing for the benefit of Sir Charles the contract which it had entered into in its own name at his request. 		
	Completion took place on or about the stipulated date. Sir Charles, of course, had by then been dead for two months, and no grant had been obtained in respect of his estate. The defendant was thus obliged to receive the purchase money and to retain it for the time being. Shortly before the completion date the defendant through its London solicitors arranged with the Prudential that the money payable on completion should be remitted direct by the Prudential to the defendant's account with a bank in Jersey. The defendant also instructed its solicitors to transfer to the same account the balance of the deposit held by them, after retaining their costs and expenses. The whole net proceeds of 		

 
	
[1981] 	

	 		
379 	

	
	
Ch. 	

		
I.R.C. v. Stype Investments Ltd. 	

		
Goulding J. 	

	

	sale of the Guy's estate thus came to be deposited in Jersey. The defendant has since been restrained from disposing of them by interlocutory injunctions of the Royal Court of Jersey, in proceedings instituted by Sir Charles's son. 		
	The Crown suggests that the motive of the defendant's instructions to transmit the money to Jersey was to enable the defendant to pay it hereafter to Sir Charles's executors under the authority of a grant of probate in the court of the island, thus eliding the necessity for a English grant, and avoiding the payment of capital transfer tax. An officer of the Crown, in an affidavit, puts the matter as follows: 		

	"It must have been known to the defendant when deciding two months after the deceased's death to transfer the proceeds of sale of the Guy's estate out of the jurisdiction to Jersey that the deceased's interest in the Guy's estate and the proceeds of sale formed part of the deceased's estate at his death and that capital transfer tax was chargeable in respect thereof, that an English grant of probate or letters of administration would be needed to establish the title of the deceased's personal representatives to the net proceeds of sale if left within the jurisdiction and that to transfer the proceeds out of the jurisdiction to Jersey would prevent English personal representatives from establishing title thereto and would entitle Jersey personal representatives to establish title thereto." 		

	The defendant does not accept that allegation. Mr. Dobbs swears that the defendant's bank accounts had always been where its day-to-day management took place, namely at St. Helier, and that until the summer of 1980 it never had any bank account in the United Kingdom. He also says it was thought that a higher rate of interest, after payment of any tax, could be obtained on a bank deposit in Jersey than in the United Kingdom. 		
	The Crown suggests further that the defendant wanted to have the money in Jersey with a view to providing financial assistance to the persons claiming to be executors of Sir Charles's will during the early stages of their administration of his estate, that is for necessary expenses before probate. The defendant, however, says that it was largely indebted to Sir Charles at the time of his death, and that the advances it has made to his executors come from its own funds. In general answer to the Crown's suspicions, Mr. Dobbs has sworn as follows: 		

	"None of these considerations in fact entered into the remitting of the proceeds to Jersey. At the time I and, I believe, my co-directors of the defendant company were unaware that it would make any significant difference to the subsequent disposal of the proceeds. It was not then appreciated that there might be long delays in obtaining a grant of probate in England or Jersey, or in resealing a grant in one of these countries in the other, or that there would be any capital transfer tax issues raised by the remittance of the proceeds belonging to the defendant company. I then thought, and still believe, that the executors would, and should, look for payment 		

 
	
[1981] 	

	 		
380 	

	
	
Ch. 	

		
I.R.C. v. Stype Investments Ltd. 	

		
Goulding J. 	

	

	of the net proceeds of sale from the seat of the defendant company in Jersey after the company had retained its expenses of the sale out of the proceeds." 		

	It is correct to say, as Mr. Price insists, that the evidence of motive from the Crown's side necessarily consists of inference, while Mr. Dobbs is giving direct testimony of things within his own knowledge. Mr. Price has also pointed out in argument that if the defendant's motive was to escape from the clutches of the Crown it did not do so very cleverly, for it left several million pounds' worth of the defendant's own assets invested in United Kingdom government stocks registered at the Bank of England. Those holdings are now the subject of an interlocutory order in these proceedings, restraining the defendant from removing or disposing of them until the determination of the originating summons or further order. However, the Crown (as I have already indicated) does not accept Mr. Dobbs's statements, and desires to test them by the processes of discovery, and by cross-examination on the hearing of the originating summons. I have considered whether I ought not, even on that ground alone, to allow the proceedings to go forward. On the whole however I find it insufficient by itself. Neither side in argument treated the question of motive as crucial, and I think I am bound to decide generally, on the material before me, whether the Crown has shown such a case as justifies the exercise of the court's discretion to allow service in another jurisdiction. I turn, therefore, to the law of executor de son tort. 		
	On that topic three authorities have been cited. The oldest is Hooper v. Summersett (1810) Wight. 16, a decision of the Court of Exchequer. There the defendant was held liable for a debt of his deceased mother-in-law, a publican, on the ground that he had lived in the house and carried on the business, in the same manner as in her lifetime. The judgment of the court was delivered by Macdonald C.B. He said, at p. 21: "The authorities to shew, that this is a sufficient intermeddling, are too strong to be got over," but the court did not find it necessary to formulate any criterion in general terms. The case was indeed, I think, a clear one. Counsel for the plaintiff had argued, at pp. 20-21, 		

	"... he was in fact living in the house, and using the goods exactly as his own, and if that does not constitute him an executor de son tort, nothing will." 		

	The next case is Serle v. Waterworth (1838) 4 M. & W. 9, in the Court of Exchequer. The defendant, though alleged to be chargeable as executrix de son tort, was held liable on an alternative ground, and the judgments really throw no light on the former question. 		
	The third, and the principal, authority debated before me was New York Breweries Co. Ltd. v. Attorney-General [1899] A.C. 62. The appellant company was there held by the House of Lords to have made itself an executor de son tort by transferring shares on its share register from the name of a deceased American member into the names of executors who had proved his will in New York, but had not obtained, 		

 
	
[1981] 	

	 		
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Ch. 	

		
I.R.C. v. Stype Investments Ltd. 	

		
Goulding J. 	

	

	and had no intention of obtaining, a grant in England. The company was held to have intermeddled with an asset of the deceased's estate and to have performed without lawful authority an act of administration because, in the words of the Earl of Halsbury L.C., at p. 69, it "did an act whereby the title to the property belonging to the deceased person became vested in somebody else," and, therefore, prima facie was an executor de son tort. Lord Shand said, at p. 76: 		

	"The right could never have been transferred if they had not interposed or intervened and, to that extent, intromitted in this estate. I think, therefore, that the result was that they became executors de son tort." 		

	Lord Davey said, at p. 77: 		

	"If a man who owes money to a deceased person takes upon himself to pay that money to some one who has no authority to receive it, I think he does an act which is an appropriation in his own hands, and asserts a right to exercise control and dominion over the debt." 		

	In addition to the authorities, I have been referred by counsel to two or three recent textbooks. They draw attention to the provisions of section 28 of the Administration of Estates Act 1925, which is in the following terms: 		

	"If any person, to the defrauding of creditors or without full valuable consideration, obtains, receives or holds any real or personal estate of a deceased person or effects the release of any debt or liability due to the estate of the deceased, he shall be charged as executor in his own wrong to the extent of the real and personal estate received or coming to his hands, or the debt or liability released, after deducting - (a) any debt for valuable consideration and without fraud due to him from the deceased person at the time of his death; and (b) any payment made by him which might properly be made by a personal representative." 		

	The author of Williams & Mortimer on Executors, Administrators and Probate (1970), pp. 40 and 41, takes the view that the foregoing section now defines the liability of an executor de son tort and that it is wide enough to cover all cases in which liability could, in practice, arise, so that it would be difficult to contend that there survives a concurrent and independent liability at common law. Halsbury's Laws of England,4th ed., vol. 17 (1976), para. 753, sets out the terms of the section without suggesting that it replaces common law liability. The next paragraph, para. 754, purports to state the principle as follows: 		

	"The slightest circumstance may make a person executor de son tort if he intermeddles with the assets in such a way as to denote an assumption of the authority or an intention to exercise the functions of an executor or administrator." 		

	The Crown does not now assert that the defendant became an executor de son tort merely by completing the sale of the Guy's estate 		

 
	
[1981] 	

	 		
382 	

	
	
Ch. 	

		
I.R.C. v. Stype Investments Ltd. 	

		
Goulding J. 	

	

	and receiving the purchase money. That concession, I think, is right, for the defendant was contractually bound to the Prudential to convey the land at the completion date and was under a fiduciary duty to secure the money for the benefit of Sir Charles's estate. The Crown's claim is put on the single act of causing the money to be removed out of the jurisdiction of the English court. Mr. Gibson submitted that where a person who is not a lawfully appointed executor or administrator, by his own act intrudes on the affairs of the deceased, he may be treated as an executor de son tort; secondly, that any act which, if done by an executor named in the will of the deceased, would preclude him from renouncing probate, will make a person not so named an executor de son tort; and thirdly, that the slightest intermeddling with the assets of the deceased, is, in principle, sufficient to create such liability. To take money to a bank beyond the seas, with whatever motive, Mr. Gibson argued, is plainly such an intrusion, act, or intermeddling, because it exposes the asset to the operation of a different legal system and may gravely prejudice the rights of English creditors of the estate. 		
	The question is, therefore, this. If an individual, A., appoints a foreign resident, B., to receive money about to arise to A. in England, and A. dies before the money is payable, and B., lawfully in the circumstances of the case, receives it after A.'s death and before a grant of representation has been made by the English court, does B. make himself liable as an executor de son tort merely by taking the money to his own place of residence? 		
	There is no direct authority on the question. Hooper v. Summersett,Wight. 16 throws no light on it. The transmission of the money does not effect any such change of title as founded the decision in New York Breweries Co. Ltd. v. Attorney-General [1899] A.C. 62. Nor, to my mind, on a fair reading of the language of section 28 of the Administration of Estates Act 1925, is it any of the acts there struck at. Nor, if I take the test from Halsbury's Laws, does it, in my judgment, denote an assumption of the authority, or an intention to exercise the functions, of an executor or administrator. 		
	I must not anticipate a case that has not yet arisen, and may never arise, but I must make it clear that I do not think the liability of the defendant to Sir Charles's estate is in the least affected by the local situation of the money. The asset is one to which Sir Charles's personal representative in England, when duly constituted, will be entitled, and if the defendant, in whatever part of the world, should part with it without the authority of an English grant, it must not be surprised if it is alleged to have made itself an executor de son tort on the principle of the New York Breweries case. But that is not to say that the natural act of taking the money to be held in suspense at the place where the defendant resides is to have the like result. The liabilities of an executor de son tort are onerous, and it would in my judgment be wrong to impose them over a wider field than heretofore in order to meet the difficulties of the Crown in the present case. The possibility - and on the evidence it is no more than a possibility - of a fraud on English creditors of Sir Charles's estate. or on the revenue, arises essentially, not from the location 		

 
	
[1981] 	

	 		
383 	

	
	
Ch. 	

		
I.R.C. v. Stype Investments Ltd. 	

		
Goulding J. 	

	

	of the bank account, but from the place of residence of the defendant, in whose name the money stands as a result of Sir Charles's dispositions during his lifetime. 		
	For the foregoing reasons, I am of opinion that I am not bound by authority to hold, and ought not without authority to hold, that the defendant is brought within the language of section 25 (6) (a) of the Finance Act 1975. It follows that in my judgment the Crown has not shown to my satisfaction that its case is a proper one for service out of the jurisdiction. 		
	The defendant put forward an alternative and independent objection to the present proceedings by the Crown. It is founded on the immunities from English process and from taxation in aid of the Crown that have been granted by the Crown, subject to certain exceptions and reservations, to the inhabitants of Jersey. The privileges in question, at least in part, are of ancient origin: in their modern form they may be found in Charters of the fourth year of Queen Elizabeth I (Public Record Office Patent Rolls, C. 66/978 m.37) and of the third year of King James II (Public Record Office Patent Rolls, C. 66/3293 m.32). Their true construction and their legal effect at the present day are plainly matters of substantial concern, both to the commissioners and to the inhabitants of Jersey as a class. Accordingly, I think it is better that the English court should make no observations about those matters until it becomes necessary to do so for the purpose of an actual decision. 		
	For the reasons I have already given, accepting the primary submission of the defendant, I set aside the order of September 12, 1980, authorising the issue and service of the concurrent originating summons. and likewise the consequent proceedings. The exact form of the order can, no doubt, be agreed between junior counsel. 		

 		
Leave to appeal. 	

	
Order of Fox J. of October 7, 1980, to remain in force until disposal of appeal subject to notice being given within 28 days. 	

	

	Solicitors: Solicitor of Inland Revenue; Titmuss, Sainer & Webb.		

	K. N. B.