Report No. 110
There is an inconsistency1 between sections 173 and 174. Under section 173 even if a fund is set apart for the payment thereof, an annuity is to be taken as for life only (and not as a perpetual one). Under section 174, however, where a fund is set apart for the payment of the annuity, the annuitant has the option to claim the capital asset (fund) so set apart and the section (174) is widely expressed so as to cover even life annuities.
Thus, where a fund is set apart for payment of an annuity, there arises a conflict between the two sections. The conflict can be reconciled by excluding, from section 174, cases where the annuity is for life only or where it otherwise appears that it is not intended to be perpetual.
1. Cf. Paruck Session Act, (1966), p. 393.