P L D 1954 Privy Council 12 (PLP)

After making provision for the sale by advertisement of the properties not selected by the appellant, Reuben or Jacob's administrators it was agreed by clause 5 that out of the assets of the estate a sum of $ 300,000 should be distributed equally amongst the appellant, Reuben, and Jacob's administrators. Then after laying down how other properties real and per sonal should be dealt with it was provided in clause 13 that with an exception not material to the issues in this appeal all- accounts of the administration of the testator's estate and also of the management of the properties held in common from the date of the testator's death to the 22nd November 1946, should be deemed to be correct and to have been stated and settled between all the parties thereto. Clause 14 was in the following terms :- "(14) In each half-yearly account of the estate. calcula tions have been made by the Accountants for interest on beneficiaries' drawings and the principle upon which such calculations have been made is agreed to by all the parties and is as follows. The beneficiary who has drawn the least is not debited with any interest but the other two beneficia ries who are for the time being overdrawn as compared with the beneficiary who has drawn least are debited with interest on such overdrawings at the bank rate of interest." It is unnecessary to set out in detail any other of the provisions of the agreement but it should be, noticed that in the course of the proceedings in Calcutta and Singapore the appellant had made allegations involving charges of fraudulent or, dishonest conduct, or culpable negligence against Reuben, the third respondent and Jacob and that it was a term of the agreement that the appellant should withdraw all such allegations. In exercise of the option conferred on him by clause 2 of the compromise agreement the appellant selected one of the properties specified in the first part of the second schedule to the agreement. This was conveyed to him on the 22nd October 1947, and he was debited in the trust accounts with the sum of $3,000 000 the value attributed to the said property in the said schedule. On the 27th July 1948, the accountants to the estate of the testator rendered to the trustees thereof the accounts for the half-year ended the 31st December 1947. The said ac counts were prepared on the footing that clause 14 of the compromise agreement was applicable and that the said sum of $3,000,000 was a drawing by the appellant which ought to be taken into account in calculating the interest chargeable The appellant disputed this construction of the agree ment and on the 21st June 1949 took out a summons in the administration action then pending in the High Court of the Colony of Singapore asking for an order that no interest was or would be chargeable against the appellant in respect of the said sum of $3,000,

000. The summons came before Murray-Aynsley, C. J. on the 2nd June 1950, who held that the sum of $3,000,000 was a drawing against the interest of the appellant which it was proper to take into account in cal culating the interest chargeable under clause 14 of the agree ment. He accordingly dismissed the summons and ordered the appellant to pay the costs of the respondents to be taxed as between party and party. The appellant appealed to the Court of Appeal in Singapore who dismissed the appeal and made a similar order as regards costs but granted leave to the appellant to appeal to Her Majesty in Council. Before this Board Mr. Sen on behalf of the appellant in a lucid argument raised in substance two points. First he contended that clause 14 was dealing entirely with accounts down to the 22nd November 1946, and had no application to any subsequent accounts. Secondly he argued that whether that was so or not clause 2 was self-contained. It contemp lated an immediate partial distribution of the assets, a transaction carried out on the exercise of an option was not an advance and therefore no interest became payable. Their Lordships are unable to accept either contention. If the first contention were well founded clause 14 would be wholly superfluous and it would have been unnecessary to explain the principle on which interest was calculated in the accounts to the 22nd November 1946. Mr. Sen relied on the fact that the clause opened in the past tense, but the intro ductory words were necessary and, in thier Lordships' opinion, were only inserted to lead up to a statement of what the principle was and to record the agreement of the parties to that principle, an agreement which in view of clause 13 would have been unnecessary unless it was to apply to accounts subsequent to the 22nd November 1946. Mr. Sen's second point also fails to satisfy their Lordships. As Evans J. pointed out in the Court of Appeal at the 31st December 1947, the trust funds had not been set aside and no residue at that date had been ascertained, Moreover the parties could not reasonably have expected immediate distribution beyond the :$3, 000,000 mentioned in clause 5 of the agree ment since, as Murry-Ayusley C. J. pointed out, the realisation of the properties to be sold must take a appreciable time though the parties in all probability did not contemplate such delays as actually occurred. Mr. Sen realised that his construction would involve an inequality between the beneficiaries, but he said that that benefit to the appellant was the consideration he received for withdrawing the charges of fraudulent or dishonest conduct and culpable negligence. Their Lordships are unable to trace any evidence of such a- bargain in the agreement and can attach no weight to this argument. Mr. Sen relied on the fact that clause 2 contained no provision for interest but the agreement must be construed as a whole and this omission is explained by clause

14. Apply ing the principle there laid down, interest is chargeable not on the total drawings of each beneficiary but on the over drawings as compared with the drawings of the beneficiary who has drawn least. Accordingly interest might not be payable on the whole amount debited pursuant to clause

2. Their Lordships agree with Murrey-Aynsley C. J. that the sum of $3,000,000 is a drawing against the interest of the appellant. The conclusion is supported by the provision in clause 2 which directs that the party making a selection shall be debited with the value of the property selected. "Debited" must mean debited in the trust accounts and the natural place in which to include such debit is the drawing account of the beneficiary. As a subsidiary point Mr. Sen argued that Murry-Ayiisley, C. J. and the Court of Appeal had gone wrong in principle in allowing a separate set of costs (a) to the first and second respondents and (b) to Reuban(now represented by the fourth respondent). He relied on the decision of the Court of Appeal in England in Re Gillson ((1949) Ch. D 99). In that case four respondents in the same interests and with precisely the same arguments to advance were represented by three different counsel and they were allowed only one set of costs between them. Lord Greener M. R. said :- The practice, in my experience, always was in such a case, to allow only one set of costs, certainly where costs are being charged on residue, for instance, or on a fund in which the persons interested are either absent or are infants and, therefore, are not in a position to consent. Their Lordships respectfully approve that practice but they observe that Lord Green's observations were made when dealing with the costs of the proceedings before the Court of Appeal, not with an application to vary an order as to costs made in a lower Court. Their Lordships find nothing in those observations to justify their Lordships interfering with the orders of the Singapore Courts in a matter so essentially within their discretion as costs and they do not therefore find it necessary to consider whether the same practice is applicable where the order does not direct payment out of a fund but by l a party to the litigation. For these reasons their Lordships will humbly advise Her Majesty that the appeal should be dismissed. The appel lant must pay the costs of the appeal. A. H. Appeal dismissed