Death Duty - Dutiable estate - Property wrongly included - Shares in company not registered in State - Company engaged in mining operations within State - Deceased shareholder neither domiciled nor resident within State - Constitutional Law - Legislative power of State Parliament - Claim for refund - Action against Commissioner - Proof to satisfaction of Commissioner - Mistake in the con- struction of this Act" - Constitution Act 1902 (N.S.W.) (Wo. 32 of 1902), sec. 5 - Stamp Duties Act 1920-1924 (N.S.W.) (No. 47 of 1920 - No 32 of 1924), sec. 103 (1) (6)* - Stamp Duties Act 1920-1931 (N.S.W.) (No. 47 of 1920 - No. 18 of 1931), sec. 140 (1), (3)*."

Sec. 5 of the Constitution Act 1902 (N.S.W.), so far as material, provides

t "The Legislature shall, subject to the provisions of the Commonwealth of Australia Constitution Act, have power to make laws for the peace, welfare, and good government of New South Wales in all cases whatsoever."

Sec. 103 of the Stamp Duties Act share and all stock held by such person. 1920-1924 (N.S,W.) provides: - "(1) __at the time of his death in any company, The estate of a deceased person whether _ corporation or society, whether regis- domiciled at the time of his death in or tered or incorporated within or out of out of New South Wales shall also be New South Wales, and carrying on the deemed to include . . . (6) every business of mining for oli or other

Bvatt J, dissenting), that the provisions of sec. 103 (1) (b) of the Stamp Duties _ Act 1920-1924 (N.S.W.) which, for the payment of death duty, purported to authorize the inclusion in the dutiable estate of a person, dying resident and ~ domiciled out of New South Wales, of shares held by him in a company incor- porated out of and having no share register within that State, but which carried on the business of mining within the State, were in excess of the powers of the Legislature of New South Wales.

Per Rich, Dixon and McTiernan JJ.: A shareholder has no property legal or equitable in the assets of the company.

By the provisions of sec. 140 (1) of the Stamp Duties Act 1920-1931 (N.S.W.) 'no refund of death duty shall be made in respect of any property wrongly included in the dutiable estate of a deceased person " by reason of any mistake in the construction of this Act."

Held, by Rich, Starke, Dizon and McTiernan JJ., that the inclusion by the Commissioner of certain shares in the dutiable estate of a deceased person upon the erroneous supposition that sec. 103 (1) (b) of the Stamp Duties Act 1920-1924 was valid was due not to a mistake in the construction of the Act, but to a mistake as to the extent of the legislative power.

An action may be brought under sec. 140 (3) of the Stamp Duties Act 1920- 1931 (N.S.W.) irrespective of whether it has been proved to the satisfaction of the Commissioner that the property in question had been wrongly included in the dutiable estate of the deceased person.

Perpetual Trustee Co, Ltd. v. Commissioner of Stamp Duties, (1930) 30 S.R.

Decision of the Supreme Court of New South Wales (Full Court): Millar ¥. Commissioner of Stamp Duties, (1932) 33 S.R. (N.S.W.) 157, reversed.

LS from the Supreme Court of New South Wales. Fanny Beatrice Millar and the Trustees and Executors and Agency Ltd., the executrix and executor of the will of Edwin Franks

New South Wales, or of treating Such minerals, or the business of or agricultural production or getting in New South Wales." e. 140 of the Stamp Duties Act 1931 (N.S.W.) provides : - " (1) re it is proved to the satisfaction Commissioner that any property

'been wrongly included in the estate of a deceased person -death duty paid in respect of such shall be repaid by him, but

and twenty-four) no refund shall be made in 'respect of any property wrongly included in the dutiable estate of any person . . . by reason of any mistake in the construction of this Act. . . . (3) Any claim for a refund of duty so paid in excess may be enforced by action or suit against the Commissioner in his official name as nominal defendant on behalf of the Crown in any Court of competent juris- diction and not otherwise."

Held, by Rich, Starke, Dixon and McTiernan JJ. (Gavan Duffy C.J. and H.C. or A.

Millar, deceased, brought an action under sec. 140 of the Stamp Duties Act 1920-1931 (N.S.W.) against the Commissioner of Stamp Duties of New South Wales to recover death duty paid in respect of property alleged to have been wrongly included in the dutiable estate of the testator. The facts alleged in the declaration were that the deceased was domiciled and resident in Victoria ; that he held shares in some companies which, though they carried on the business of mining or of treating minerals in New South Wales, were incorporated in Victoria, and had no share register in New South Wales ; that the shares were treated as included in the dutiable estate of the deceased in New South Wales; and that duty was assessed and paid upon them. The declaration contained three counts and each count was demurred to. The first and second counts were said to be bad upon the grounds that they did not allege that the shares were not wrongly included in the dutiable estate of the deceased by reason of any mistake in the construction of the Stamp Duties Act 1920-1931 - the allegation was merely that the shares were not wrongly included in the dutiable estate " by reason of any mistake in construction." The Supreme Court held that the allegation as appearing in the respective counts was sufficient. A further ground upon which the first count was demurred to was that it did not allege that it was proved to the satisfacton of the Commissioner that any of the shares in question were wrongly included in the dutiable estate of the deceased. The Supreme Court followed the decision in Perpetual Trustees Co. vy. Commissioner of Stamp Duties (1) and held that the point was well taken. The third count set out facts showing that the deceased was resident and domiciled outside New South Wales ; and that the shares in question were shares in companies registered outside New South Wales, and having no share register in New South Wales, and then instead of alleging, as in the second count, that it was proved to the satisfaction of the Commissioner that the shares had been wrongly included in the dutiable estate, it alleged that "all the above-mentioned facts : have been and are proved to his satisfaction " and that repayment of the amount of death duty paid in respect of the shares had been requested and had been refused. The Commissioner demurred to

proved to his satisfaction did not constitute proof to his satis- ction that the shares were wrongly included in the deceased's dutiable estate, and, further, that the count did not allege that it yas proved to his satisfaction that the shares in question were ly so included. The Supreme Court, in applying the principle id down by Isaacs J. in Moreau v. Federal Commissioner of Taxation decided that the facts alleged in the third count were such that Commissioner's disregard of them " was so irrational as to be outside the limits of administrative discretion with which" he was

wested and was " really in disregard of the statutory condition " mtained in sec. 140 (1) of the Stamp Duties Act, and held that the

sec. 103 (1) of the Act upon the estate of a deceased person who was neither domiciled nor resident within New South Wales in pect of property not situate within New South Wales. Judgment on the demurrer was given for the Commissioner on the first count d for the plaintifis on the second and third counts: Millar v. nmissioner of Stamp Duties (2) From this decision, as regards the second and third counts, the ndant now, by special leave, appealed to the High Court. The ntifls also appealed from the decision of the Supreme Court in of the first count.

leave to appeal the following facts were admitted by the : - That the deceased was at the date of his death resident ind domiciled in the State of Victoria ; that the deceased duly made iis will, and died on 26th May 1928, without having revoked such g that probate oo the will was Eranted by the Supreme Court

127th August 1928 ; that the probate was vealed by the waclin urt of New South Wales on 28th September 1928; that the ed at the date of his death was the registered holder and the of (inter alia) certain shares in certain companies duly incor- d under the laws in force in the State of Victoria, and not (1926) 39 C.L.R. 65, at p. 69. (2) (1932) 33 S.R. (N.S.W.) 157.

is count on the ground that the facts therein alleged as having H. ©. or A.

H.C. or A. otherwise, as companies limited by shares, and having no share

Res register in the State of New South Wales, which companies at the Comms- date of the death of the deceased carried on the business of mining for minerals, as defined in the Mining Act 1906 (N.S.W.), in New South Wales, or of treating such minerals; that the defendant for the purposes of the assessment in the estate of the deceased of death duty payable under the Stamp Duties Act 1920-1924 treated such shares as included in his dutiable estate and assessed death duty upon such estate upon that basis, and not otherwise; that the

plaintiffs as executrix and executor as aforesaid paid death duty to

Dorres (NSW) the defendant accordingly ; that all the above-mentioned facts had

been and are proved to the satisfaction of the defendant ; that the plaintiffs as such executrix and executor had requested the defendant. to refund and repay to them the amount of death duty so paid in respect of such shares; and that the defendant had refused and still refused to refund or repay such duty or any part thereof to the plaintiffs or either of them.

Teece K.C. (with him Betts), for the Commissioner of Stamp Duties. The provisions of sec. 103 (1) (6) of the Stamp Duties Act 1920-1924 were not in excess of the powers conferred upon the Legislature of New South Wales by sec. 5 of the Constitution Act 1902, and could be applied to the shares of a foreign company carrying on the business of mining for gold in New South Wales. The Legislature is entitled to regard a shareholder of such a company as being a member of a partnership operating in New South Wales (Morgan v. Deputy Federal Commissioner of Land Tax (N.S.W.) (1) ), and the whole of the interest of such a shareholder is liable to duty (Commissioner of Stamp Duties v. Salting (2) ). What is meant by a "mining company" is shown in sec. 3 of the Act. The pleader should state clearly in the declaration why he alleges that the company is not caught by the Act. The matter comes within the jurisdiction of the New South Wales Legislature because the deceased was a partner in a statutory partnership carrying on business in New South Wales. Alternatively, the intention of the Legislature was to tax only the shares in those companies over which it in fact

(1) (1912) 15 C.L.R. 661, at p. 669. (2) (1907) A.C, 449.

issioner of Stamp Duties v. Salting (1)). As, by virtue of

granting of probate or letters of administration, such duty is bate duty in the true sense of the term ; and the duty required o be paid in connection with the property here in question is part of the price of probate, the amount of which is determinable by the islature (R. v. Lovitt (2); New South Wales Institution for the af, Dumb and the Blind v. Shelley (3) )- _ [Dixon J. referred to Bank of Toronto v. Lambe (4).| the facts set out in the third count the duty was paid owing a mistake as to the validity of the Act ; therefore such duty cannot recovered by the respondents as such a mistake is a " mistake in ep raction " of the Act within the meaning of sec. 140. ' includes not only the meaning of the words but so their legal effect (Chatenay v. Brazilian Submarine Telegraph . (5); National Pari-Mutuel Association v. The King (6) ). (Dixon J. referred to R. v. Roberts; Bx parte Whitworth (7).] e Act should be construed so as not to exceed the legislative of New South Wales, and is valid to that extent (Australian ; ays Union v. Victorian Railways Commissioners (8); see also e. 144 Stamp Duties Act 1920-1931 (N.S.W.)). The third count isalso bad because it does not allege that the shares were not wrongly included by reason of any mistake in the construction of the Act. e count should have negatived the exception. The declaration

included in the dutiable estate (Perpetual Trustee Co. v. issioner of Stamp Duties (9) ). It is not sufficient to allege ts on which, if he properly interpreted the law, the Commissioner to be satisfied. The condition in sec. 140 that the wrong usion must be " proved to the satisfaction of the Commissioner "" be literally complied with (Cornell v. Deputy Federal Commis- er of Taxation (S.A.) (10); Thomson v. Federal Commissioner (6) (1930) 47 T.L.R. 110. (7) (1924) 40 T.L.R. (8) (1930) 44 C.L.

(9) (1930) 30 S.R. (N.S.W. (10) (1920) 29 C.L.R, 39.

as jurisdiction, that is, companies confined to New South Wales H.C. or A.

• of Taxation (1); Federal Commissioner of Taxation v. Australian

Boot Factory Ltd. (2): see also Verner v. General and Commercial Investment Trust (3) ).

{Evarr J. referred to J. C. Williamson's Tivoli Vaudeville Pty. Ltd. v. Federal Commissioner of Taxation (4).]

Weston, for Fanny Beatrice Millar and the Trustees and Executors and Agency Co. Ltd. Death duty is a charge on an estate through the executor or administrator ; it is a misnomer to refer to it as a price paid for probate (see Stamp Duties Act, secs. 100-123,

particularly sec. 116). The provisions of sec. 117 simply ensure

the payment of the duty, but the grant of probate is not dependent upon such payment. The correct construction of sec. 103 of the Act is that it relates to a company carrying on any business anywhere provided it carries on business of a designated character in New South Wales. The Act does not tax the operations or activities of the company from the products but taxes the value of the share outside New South Wales, which the Legislature is not competent to do (Commissioners of Stamps (Q.) v. Wienholt (5) ).

{Srarke J. referred to Merchant Service Guild of Australasia v. Commonwealth Steamship Owners' Association [No. 3] (6).

{Evarr J. referred to Nathan v. Federal Commissioner of Taxation (7).]

The primary test of territorial jurisdiction is that the subject of the legislation must be a person, thing, or circumstance within the territory (Commissioners of Stamps (Q.) v. Wienholt (8) ).

{Evarr J. referred to Merchant Service Guild of Australasia v. Commonwealth Steamship Owners' Association [No. 3] (6), as showing a distinction between the Commonwealth power limited and the State power unlimited except by the phrase " in all cases whatsoever."'|

The test is, in the main, territoriality. Unless the duty is imposed only on property over which the State has territorial jurisdiction,

(1) (192: LR. 73. (4) (1929) 42 ©, LR. 452, at p. 469,

(2) (1926) 38 C.L.R. 391, at pp. 396, (5) (191 . 397. (6) (1920) (3) (1894) 2 Ch. 239, (7) (1918) (8) (1915) 20 C.L.R., at pp. 5

stee Co. (Watt's Case) (1) and Merchant Service Guild of Aus- sia v. Commonwealth Steamship Owners Association (2); see London and South American Investment Trust vy. British bacco Co. (Aus.) (3)). The legislative jurisdiction is territorial, nd the jurisdiction so attracted is limited to legislation to the , thing or circumstance in the territory, so that when a company is carrying on a business in New South Wales the juris- liction of that State, whatever it may be, which is attracted by it circumstance does not extend to impose a tax by way of a ge upon a person domiciled in (say) Victoria who happens to

a partnership, the incidences associated with, and the law erable to partnerships being very different in many material ects from those associated with and referable to companies. The question of constitutionality was neither argued nor considered in Nathan v. Federal Commissioner of Taxation (4). By the rovisions of sub-sec. 3 of sec. 140 of the Stamp Duties Act an in ependent power is conferred upon the Court irrespective of the sions of sub-sec. 1 of that section. The words "so paid" in sec. 3 mean " paid in consequence of a wrongful inclusion in e estate." The Supreme Court was right in saying that in the ation satisfaction might be imputed to the Commissioner.

Teece K.C., in reply. The correct principles were applied by Supreme Court in Perpetual Trustee Co. v. Commissioner of Duties (5) and in this case (R. v. Commissioners of Inland we; Inve Nathan (6) ). The satisfaction of the Commissioner annot be reviewed by the Court. As to the validity of see. 103 of Stamp Duties Act, once there is some circumstance that attracts the jurisdiction of the State Legislature this Court cannot limit the xtent of the taxing power (Bank of Toronto v. Lambe (7) )-

(1926) 38 C.L.R. 12, at pp. 31-33. (4) (1918) 25 C.L.R. 183. (1913) 16 C.L.R. 664, at pp. 689 (5) (1930) 30S. I. (6) (1884) (1927) 1 Ch, 107. (7) (1887)

is invalid (Commissioner of Stamp Duties (N.S.W.) v. Perpetual 4. ©. oF A.

• The word " construction " as appearing in sec. 140 (1) of the Stamp :

Duties Act 1920-1931 also means " interpretation," and includes consideration of the validity or otherwise of an enactment (Commis- sioners of Stamps (Q.) v. Wienholt (1) ).

Gavan Durry C.J. anp Evarr J. The present appeal raises an important question as to the validity of sec. 103 (1) (6) of the New South Wales Stamp Duties Act 1920-1924. The sub-section, for purposes of death duty, includes in the estate of persons wheresoever domiciled, every share held by such persons in any company, whether registered or incorporated within or without New South Wales, which, at the time of the death of the shareholder, carries on in New South Wales the business of mining for any mineral or

By the New South Wales Act No. 20 of 1894, sec. 1 (1) (6), itwas " provided that where application was made in New South Wales *! for probate or letters of administration, or for an order to collect *! in respect of the estate of any person dying domiciled without New South Wales, the estate should, for the purposes of the Stamp Duties Acts 1880 and 1886, be taken to include every share held by that " person in any company carrying on the business of mining for any mineral in New South Wales, notwithstanding that the shares were not at the time of the death of the said person bona notabilia within New South Wales. In the consolidating Act of 1898, sec. 1 (1) (b) ® of the 1894 Act reappeared as sec. 51 (1) (b), but the words "where il application is made for probate or letters of administration, or for ity

an order to collect in respect of the estate," were not repeated as it was made clear elsewhere that the duty was to be collected as yy at the time of a New South Wales grant in respect of the estate. The Act of 1920 repeats the provision from the Act of 1898, but also affects businesses other than those of mining for minerals.

The case was argued in the Supreme Court upon demurrer to each of three counts of the declaration of the plaintifis, who sued the appellant as nominal defendant under sec. 140 of the Stamp

ul Act, claiming that certain shares of the testator had been "wrongly included" in the estate of which they were executors. If sec. 103 (1) (6) is not beyond the competence of the New South fales Legislature, it is clear that the Commissioner is entitled to judgment, because each of the three counts complains of the very 'inclusion in the estate of company shares of the character expressly described in sec. 103 (1) (6) of the Act.

It appears from the pleadings that the testator was domiciled in

yurt of New South Wales in its probate jurisdiction for a reseal that Court of the original Victorian probate. By sec. 107 (2) the Wills, Probate and Administration Act 1898 such probate, so sealed by the Supreme Court of New South Wales, has the same operation in New South Wales, and every executor is subject to the same duties and liabilities, as if probate had been originally nted by the Supreme Court of New South Wales. By sec. 97 (1)

the same Act the executor applying for, and obtaining, such

ing, is deemed resident in New South Wales, and, if not actually must, before the issue or sealing of the probate, file with e Registrar a Sydney address, service at which is to be deemed

sonal service. By sec. 108 (1) it is provided that the seal of the lourt shall not be fixed to any foreign probate until all such probate

ate had been originally granted in New South Wales.

_ The Stamp Duties Act also contains a provision that no probate issue from the Supreme Court Office until death duty has en paid and the probate duly stamped (sec. 119).

Tt therefore appears that the respondent executors applied to the Supreme Court of New South Wales for a reseal of the original in probate, because assets other than the shares in question e situate within New South Wales, that, in order to administer h New South Wales assets, they were compelled to seek the uM 'ity of the New South Wales Court, and that they obtained

only upon fulfilment of the statutory condition of payment of

ity in respect, not only of the locally situated assets, but also of the shares the inclusion of which is now said to be beyond the ence of the New South Wales Legislature. Mr. Teece, for

the Crown, argued strenuously that, by invoking the jurisdiction of the Supreme Court in Probate, upon the clearly defined statutory conditions, the respondents placed themselves in the position of having to pay the full duty as the price of obtaining the seal and authority of the New South Wales Court so as to enter lawfully upon the administration within that State. He contended with much force that the quantum of duty chargeable in such cireum- stances was a matter entirely within the discretion of its Legislature, which, over all property and all State tribunals within its borders, has full control and authority.

But it is unnecessary to elaborate further upon that aspect of the case. The jurisdiction of the New South Wales Legislature is subject to the Commonwealth of Australia Constitution Act, which distributes powers of legislation between Commonwealth and State Parliaments. But no question of competing or overriding power arises in this case; and the only ground upon which the validity of the enactment contained in sec. 103 (1) (b) of the Stamp Duties Act has been attacked is that it is beyond the territorial jurisdiction of the New South Wales Legislature. Unlike the powers of the Commonwealth Parliament, those of the New South Wales Parlia- ment are not defined by reference to subject matter, but, subject to the powers of the Commonwealth Parliament, extend to the peace, welfare and good government of the State in all cases whatso- ever. It is, in our opinion, competent to the New South Wales Legislature to select any event, circumstance, or course of activity within its borders as the foundation of liability to contribute to the revenue of the State. In the present case, at the time of the testator's death, the company in which he had share capital embarked, was carrying on the business of primary production in New South Wales. The incorporation of the company, the technical legal situs of the shares, the residence and domicile of the testator, were all outside New South Wales. But, as has already been indicated, the Legislature thought fit, as long ago as 1894 with respect to companies carrying on mining businesses within New South Wales, to make a levy upon the capital which was, partly at least, employed in extracting or endeavouring to extract wealth

n the soil of the State. The moment selected for the levy was of the death of the holder of any part of the share capital. In our opinion, the holding of shares in a company carrying on ess Within the State, furnishes a connection between the holder nd the State which is sufficient to found a taxing jurisdiction. decisions of this Court in Nathan v. Federal Commissioner of ion (1) and in Murray v. Federal Commissioner of Taxation , although relating to Commonwealth income tax, tend to show the New South Wales Legislature's jurisdiction cannot be lenged in such a case, although there may be practical difficulties in collection. In the latter case Knox C.J. said (3): " We are all opinion that Nathan v. Federal Commissioner of Taxation, rightly ided that dividends on shares in a foreign company resulting ly from profits derived in Australia are properly subjects of tion under the Income Tax Assessment Act in the hands of a eholder."" In the case of a shareholder being taxed upon the lends he receives from a company which carries on a business within New South Wales, the Legislature may lawfully treat New South Wales as the territorial source of the shareholder's income, though he has no legal interest in any part of the company's property within that State. And in such a case, can it be asserted hat the power of the Legislature is limited to the imposition of a ax upon that part only of the dividends paid which is referable to e profits made by the company in New South Wales? It is sible that the company may be deriving income from businesses ied on, not only within New South Wales, but without it. The ainment of the precise part of the dividends which is attribut- to the New South Wales business, may be impossible, and we 0 not see why the Legislature may not resolve this practical ty by saying that, in such cases, all the dividends received m such a company may be taxed. The wisdom and expediency of such legislation are none of our concern. So, too, in the case of the inclusion of the shares in the estate of the shareholder dying domiciled outside New South Wales. If the late (and the Commonwealth) may lawfully levy income tax upon

(1) (1918) 25 C.L.R. 183. (2) (1921) 29 C.LR. 134. (8) (1921) 29 C.LR,, at p. 138.

• his dividends, it may levy a capital tax upon his shares; and for

the same reason. He belongs to the class of persons who are sufficiently identified with a New South Wales activity or concern to become subject to the power of the New South Wales Legislature in respect of their business connection with it. He may say, and with truth, that only part of his interest in the company's New South Wales business is referable to New South Wales, because another part of its business is conducted elsewhere. The broad answer to his contention is that, given jurisdiction because of the business connection between the shareholder and the State, the Legislature cannot be pinned down to any one scheme or method of taxing the shareholder in relation to that business connection. The argument of the respondent - that there must be a "logical" relation between the amount of the tax and the circumstance which founds jurisdiction, and that the Legislature can tax only such part of the value of the shares as is ascertained by fixing a ratio between the property owned by the company in New South Wales and that owned by it elsewhere, cannot prevail. The impossibility or great difficulty of undertaking such an elaborate quantification of the value of the subject matter of tax, and the great improbability that companies of the specified character will also be carrying on substantial businesses elsewhere, led the New South Wales Legis- lature to impose taxation upon the total value of the shares. This being in our opinion within its powers, as a law for the peace, welfare and good government of New South Wales, the appeal should be allowed, the cross-appeal dismissed, and the defendant's demurrer to each of the three counts of the declaration should be upheld.

Ricu, Drxon anp McTiernan JJ. The first question raised by this appeal is whether before its repeal par. (b) of sec. 103 (1) of the Stamp Duties Act 1920-1924 operated to require that, in the dutiable estate of a person dying resident and domiciled out of New South Wales, there should be included shares held by him in a company incorporated out of the State and having no share register within the State, if the company carried on the business of mining for minerals in New South Wales or of treating such minerals, This statutory provision purported to include in the dutiable estate of

a person domiciled elsewhere every share and all stock held by him at the time of his death in any company, corporation or society ether registered in New South Wales or elsewhere and carrying n the business of mining for gold or other minerals as defined in the Mining Act 1906 in New South Wales or of treating such minerals, or the business of pastoral, agricultural production or timber-getting n New South Wales. The language of this provision, in our opinion, will not bear an interpretation which restricts it to companies whose ire business or property is confined to New South Wales. It is nded to include a foreign company whose business, if of the required description, extended to New South Wales.

In the Supreme Court the provision was held to exceed the erritorial limitation imposed upon the legislative powers of the te. Street C.J. said (1): "The intention to include in the dutiable ite of a deceased person shares and stock wherever locally situated in any company carrying on specified operations in the State, and jive of whether the deceased owner was domiciled here or is plain and express, and it is equally plain that this was an position in excess of the powers of the Legislature of this State."

itive powers of the State. The duty imposed by the Stamp Act is not conditioned upon the grantor sealing probate or s of administration under the law of New South Wales. If he legislation had selected the acquisition of such a right or title the law of the State as the occasion of the duty, it may be ed that it might have measured the quantum of the duty by ce to the property of the deceased wherever situated. But

levied although no administrator is constituted whether in or t of the State; see secs. 115 and 116. Sees. 113 (2) and 114 e no more than machinery for collection when probate or istration is obtained. Among the assets upon which duty is

levied sec. 103 (1) (6) assumed to include the shares in foreign mpi If its operation were restricted to deceased persons had been connected by residence or domicile with New South

H.C. or A. Wales, then again it might be conceded that a sufficient territorial -

a connection would have existed to support the imposition of the i

Comms. duty. But the duty is not based upon any personal connection of

ewitae the deceased with New South Wales. As a shareholder the deceased _

Portes had no property, legal or equitable, in the assets of the company

(N.S.W.) ae. (Macaura v. Northern Assurance Co. (1)). The shares held by

• • • him considered as property were not situated in New South Wales.

ae A shareholder is not a principal acting by the company as his agent.

Comms- 'The existence in New South Wales of a business conducted by the

cata company does not make the shareholder a person who has by his (N.S.W.) representative come under the legislative jurisdiction of the State.

Rich J. Let it be assumed that, in so far as the shareholder obtains an actual Metiernan 3 advantage from the possession by the company of property in New South Wales, that advantage may be taxed by the State. It may be the case that the Legislature can disregard the legal character of the relation between the assets of the company and the share- holders, and can fasten upon the actual benefit or economic advantage which the shareholder derives from property situated in or operations conducted in the State. But the subject of taxation selected by the present enactment is not this advantage or benefit. The subject - « is the entire value of the share. The business in New South Wales of the company may be a small part of its whole undertaking. It may be a source of little profit or, indeed, of continual loss. The operations in New South Wales may not account at all for any of : the value contained in the share. What the Legislature fastens i '

upon as the subject of taxation is the share, not the economic advantage derived by the connection with New South Wales. It does not supply the measure, the quantum, of tax by reference to the share and impose the tax so measured upon some act oceurring or thing situate within its jurisdiction. It assumes to tax the share , as property out of the jurisdiction, but does so because of the

existence of the company's business within the jurisdiction. In doing so, it adopts a connection which is too remote to entitle its enactment to the description a law "for the peace, welfare, and good government of New South Wales": sec. 5 of the Constitution Act 1902. Or, to state the matter in another way, although some

ection between the shareholder and New South Wales may be 4. ©. or A.

iscovered in the existence there of part of the company's under- a

the enactment goes beyond legislating in respect of that Comms. ion. It does not seem possible to construe the provision so "gyi

once to confine it within the ambit of the power of the State Dum

ture and to include the facts of the present case within its vn 7 ration. de 'The second question raised by the appeal is whether in an action wate ought under sub-sec. 3 of sec. 140 of the Stamp Duties Act Comm

1920-1931 duty overpaid because of the unauthorized inclusion of - Stamr

purported pursuance of sec. 103 (1) (6) may be recovered it has been first proved to the satisfaction of the Commissioner rich J. they were wrongly so included. In Perpetual Trustee Co. Metiernan 3. . Commissioner of Stamp Duties (1) it was decided that sub-sec. 3

did not enable the subject who had overpaid duty because property

ad been wrongly included in the dutiable estate to sue the Commis-

unless the Commissioner had been first satisfied that it was

y so included. We are unable to adopt this construction of

c. 140. In the first place, it leaves little practical operation for

ub-sec. 3. If he is satisfied under sub-sec. 1 of the wrongful

clusion of property, the Commissioner is required by that

hiion to repay the excess duty. It seems needless to prov! ide

to beself-imposed. In the next place, considered grammatically, sec. 3 does not appear to incorporate by reference so much of ec. 1 as requires that the Commissioner should be satisfied e words " duty so paid " in sub-sec. 3 refer back to the expression n Sub-sec. 1 "death duty paid in respect of such property," and it expression " such "' relates to the words " wrongly included the dutiable estate" and does not contain any reference to the jirement of proof to the satisfaction of the Commissioner. The lect of sub-sec. 1 is to authorize and require the Commissioner to

inion that the subject had overpaid duty because of the erroneous on of property in the dutiable estate. The effect of sub-secs,

• 3 and 4 is to provide that within three years the Commissioner may

be sued in his official name as nominal defendant in respect of a

claim to such a refund. An action to "enforce a claim" is a proceeding which supposes the claim has not been acceded to. It appears to us to have been provided for on the footing that in the Courts the claim would be examinable although the Commissioner had rejected it. In construing sec. 140, it is desirable to remember

that if the payment of excessive duty were made in order to obtain

an actual issue of probate or letters of administration, it would be

recoverable at common law in the absence of any statutory provision. Thus the construction adopted in Perpetual Trustee Co. v. Com- missioner of Stamp Duties (1) means that the right otherwise existing to recover an excessive exaction would be abridged. r The third question in the appeal is whether the amendment ~* introduced by sec. 7 (d) of Act No. 13 of 1931 into sub-sec. 1 of sec. 140 operates to prevent the recovery of the duty which has been 4 overpaid because shares have been wrongly included in the dutiable estate upon the supposed authority of par. (b) of sec. 103 (1). This amendment adds to sub-sec. 1 the words: "'but (except in accordance with an order of the Court under section one hundred

and twenty-four) no refund shall be made in respect of any property wrongly included in the dutiable estate of any person whether « dying before or after the passing of the Stamp Duties (Amendment) Act 1931 by reason of any mistake in the construction of this Act." It is contended that this amendment affects the right of action - . referred to in sub-sec. 3 and disables the subject from recovering

an excess payment of duty attributable to a mistake in the construe- tion of the Act. Whether this is so or not, we are of opinion that

when the Commissioner included the shares in the estate acting upon the supposition that par. (b) of sec. 103 (1) was altogether within the power of the Legislature, he did not do so by reason of any mistake in the construction of the Stamp Duties Act. His mistake related to the extent of the legislative power, not to the construction of the enactment.

In our opinion the appeal should be dismissed with costs and the cross-appeal should be allowed with costs.

"Srarke J. Under the Stamp Duties Act of New South Wales, 47 of 1920, death duty is payable upon the final balance of the tate of a deceased person. And by sec. 103 (1) (b) - now repealed Act No. 13 of 1931, sec. 6 (c) (i.) ) - the estate of a deceased on, whether domiciled at the time of his death in or out of South Wales, includes "'every share . . . held by such rson at the time of his death in any company . . . whether incorporated within or out of New South Wales, and on the business of mining for gold or other minerals as in the Mining Act 1906 in New South Wales, or of treating y such minerals." Pursuant to this Act, the Commissioner ded in the dutiable estate of Edwin Franks Millar certain shares

itors in respect of these shares. An action was then brought the executors founded upon the provisions of sec. 140 of the mp Duties Act 1920-1931 to recover the duty so paid. In their tion the executors alleged the following facts : - (1) That was domiciled and resident in Victoria; (2) that Millar at e time of his death was the owner of certain shares in companies corporated under Victorian law as companies limited by shares

6 in New South Wales or of treating such minerals; (4) that he Commissioner, for the purpose of the assessment of the estate f Millar to death duty, included the said shares in his dutiable tate, and assessed duty upon the estate upon that basis; (5) that e executors of Millar paid the death duty so assessed; and (6) the shares were wrongly included in Millar's dutiable estate.

'moment because they are not material for the consideration of juestion raised under sec. 103. The Commissioner demurred to

e Supreme Court of New South Wales held that the duty levied 'in excess of the constitutional power of the Parliament of New Wales to make laws for the peace, welfare, and good govern- of New South Wales in all cases whatsoever (Constitution Act

Comanrs. SIONER OF Stamp Duries (NS.W.) v. Mittar. Muar v. Comans- SIONER OF Stamp Dues (NS.W.)

1902, sec. 5). Street C.J. thus expressed the opinion of the Court (1): _

" The intention to include in the dutiable estate of a deceased person shares and stock wherever locally situated in any company carrying on specified operations in the State, and irrespective of whether the deceased owner was domiciled here or not, is plain and express, and it is equally plain that this was an imposition in excess of the powers of the Legislature of this State.""

The authority of every State to tax persons and property within its territory is, of course, unquestionable. In the present case, however, neither the person nor the property was within its territory. But it was said that the legislative authority of New South Wales was attracted for either of two reasons. First, because the companies in which Millar held shares, carried on mining operations or had a business situated in New South Wales (Morgan v. Deputy Commis- sioner of Land Tax (N.S.W.) (2); Commissioners of Stamps (Q.) v. Wienholt (3); Commissioner of Stamp Duties (N.S.W.) v. Perpetual Trustee Co. (Watt's Case) (4) ). It is true that Millar was interested in the companies, but still it was the companies that carried on business as such, and Millar's rights as a shareholder were quite distinct. The connection, therefore, between the companies' operations and Millar's interest is somewhat attenuated. It is not important, however, to consider how far the business operations carried on by the companies in New South Wales attract the taxing power of the State as against Millar or his estate, for in my opinion the tax is not levied in respect of such operations, but upon property

• shares in the present case, which are not situate in New South Wales, are not issued by any company incorporated under the laws of New South Wales, and are not owned by any person resident or domiciled in New South Wales. But the Act, on its proper inter- pretation, extends to such a case, and so far, I agree, is in excess of the powers of the Legislature of New South Wales. Second, because the tax was a quid pro quo - a price - in return for the sealing in New South Wales of probate of the will of Millar (R. v. Lovitt (5) ). The right to tax exists, so it was argued, because the representatives of the deceased required the help of the State to

164, (4) (1926) 38 $ (2) (1912) 15 CLR. 661. (5) (1912) A.C. 212. ;

g of probate. But it is unnecessary, in the present case, to ler whether the right to tax based upon such considerations nds to the assets wherever situate of a deceased person who 'was never resident or domiciled within the State. An examination the Stamp Duties Act satisfies me that the payment of death duties is not the price of probate. The duties are imposed upon eath, and are assessed upon the final balance of the estate of the eased, and constitute a debt due to the Crown and a charge on the whole dutiable estate of the deceased, which is not exempt

eed be or can be made in New South Wales. (See secs. 101, 114, 115, 116.) The provisions of secs. 117, 118 and 119 provide a wenient method of collection and nothing more.

Another question raised by the demurrer turns upon the proper struction of sec. 140 of the Stamp Duties Act 1920-1931. It is follows : - ''(1) Where it is proved to the satisfaction of the Commissioner that any property has been wrongly included in the dutiable estate of a deceased person the death duty paid in respect of such property shall be repaid by him, but (except in accordance with an order of the Court under section one hundred and twenty- ) no refund shall be made in respect of any property wrongly cluded in the dutiable estate of any person whether dying before after the passing of the Stamp Duties (Amendment) Act 1931, by on of any mistake in the construction of this Act. . . . (3) Any im for a refund of duty so paid in excess may be enforced by ction or suit against the Commissioner in his official name as 'nominal defendant on behalf of the Crown in any Court of competent jurisdiction and not otherwise." It has been held that the satis- faction of the Commissioner that property has been wrongly included n the dutiable estate is a condition of the right to obtain a refund duty under the provisions of sub-sec. 3 (Perpetual Trustee Co. Commissioner of Stamp Duties (N.S.W.) (1)). I apprehend , but for the section, a claim might have been made under the against the Government and Crown Suits Act, No. 27 of 1912. The special provisions of sec. 140, however, contemplate, I think,

uire a right or privilege conferred by the State in the grant or H.C. or A.

Commas- SIONER OF Stamp Durres (N.S.W.) v. Mmar. Mirar v. Comans- SIONER OF Stamp Duties (NS.W.)

the case of the Commissioner being satisfied that property has been wrongly included in the dutiable estate, and also the case of the Commissioner being not so satisfied. In the former, it is his duty as a matter of administration, to repay the amount overpaid; in the latter, the subject may bring his action under sub-sec. 3. The addition to sub-sec. 1 by the Act No. 13 of 1931, sec. 7 (d), rather confirms this view, for it precludes the Commissioner making refunds in respect of property wrongly included in the dutiable estate by reason of any mistake in the construction of the Act. The definitive interpretation of an Act is hardly the function of an administrative officer, and usually falls for determination by the Courts of law. Hence the proviso, which makes for uniformity and equality in the application of the law.

Some suggestion was made that the proviso inserted in sec, 140 by the Act No. 13 of 1931, sec. 7 (d), is a limitation upon the right of action given by sub-sec. 3. In my opinion, it is not; but, if it be, then the answer is that the overpayment of duty in the present case is not by reason of any misconstruction of the Stamp Duties Act, but because the Act was not within the competence of the Legislature.

The appeal should be dismissed and the cross-appeal allowed.

Appeal dismissed with costs. Cross-appeat allowed with costs.

Solicitor for the appellant, J. Z. Clark, Crown Solicitor for New

South Wales. Solicitors for the respondents, Norton, Smith & Co.