Commissioner of Stamp Duties (NSW) v Simpson [1917] HCA 69

Held, by Barton and Gavan Duffy JJ. (Isaacs J. dissenting), that sec. 3 limits the meaning of the word "settlement" to instruments which are " contracts or agreements," that there is nothing in the Act which " indicates or requires" that the word " settlement" in seo. 49 (2) (a) (a) should have any other meaning, and therefore that where, in exercise of a general power of appointment contained in the will of her father, A executed a deed poll of appointment creating thereby trusts to take effect after her death, no duty was payable under sec, 49 (2) (a) (a) in respect of the property passing on A's death by virtue of the deed poll.

H.C. o A. 1917. SYDNEY, Aug. 21, 22; Sept. 5; Dec. 10.

Decision of the Supreme Court of New South Wales: Simpson v. Com sioner of Stamp Duties, 17 8.R. (N.S.W.), 217, affirmed.

The Commissioner of Stamp Duties for New South Wales stat ed a case for the Supreme Court, which was substantially as follows

1. By the will of John Thomas Baptist, deceased, the fai of Amelia Curtis, dated 16th August 1869, certain lands an hereditaments in this State were devised to the trustees the upon trust during the life of the said Amelia Curtis to pay rents and annual income thereof to her as therein mentioned, a from and after the death of the said Amelia Curtis upon trust

divers remainders over. i 2. The testator died on 15th September 1873, and probate of his said will was shortly thereafter granted by this Court to the executors and trustees therein named, 3. At the date of the deed of appointment in the next succeedi paragraphs hereof mentioned the said Amelia Curtis was a widow

death. Amelia Curtis, in exercise of the powers given to her by the said will of her said father and of every or any other power enabli her in that behalf, thereby absolutely and irrevocably appointed a directed that from and after her decease the trustees of the s

of all property whether real or personal over which she then had might at the time of her decease have any power of appointment under the said will of the said testator, upon trust to sell and conv the same into money, and stand possessed of the proceeds of sale and conversion upon trust to make thereout in the first pla

_ tioned, and to hold the balance of the said proceeds after making _ the payments aforesaid upon trust to pay and divide the same _ amongst certain of her nephews and neices therein mentioned and Magdalen Bryne, the wife of her nephew Edward Baptist Bryne, and the said Amelia Curtis thereby directed that the share of the said Magdalen Bryne should be held on trust for her for her life and thereafter on trust for her children as therein mentioned. 5. The said Amelia Curtis died in England on 17th April 1915, eaving a will probate whereof was duly granted by the High Court _of Justice (Probate Division) to Alfred Thomas Simpson, the executor therein named. Exemplification of probate of the said will was on 2nd December 1915 duly resealed by the Court on the application of Sir Thomas Hughes, the duly appointed attorney of the said executor. _ 6. The value of the property the subject of the said deed poll _ of appointment was, at the date of the resealing of probate of the said will of the said Amelia Curtis, £63,641 9s. 10d.: such property is vested in the said Sir Thomas Hughes and Charles Baptist Bryne, as the trustees of the said deed poll, by an order of the Chief Judge _ in Equity dated 16th November 1916. _ 7. The said Amelia Curtis was at the date of her death possessed of other property of the value of £502 18s. 2d. 8. The Commissioner claimed that duty was payable on the said appointed property on the ground that the said deed poll of appointment constituted a settlement within sec. 49 (2) (a) (a) of the Stamp Duties Act 1898. 9, The Commissioner duly assessed the duty payable in respect of the said appointed property and the said other property of the F dat the sum of £6,200 13s. 8d., being at the rate of £9 2s, 3d. centum.

ing the duty already paid upon the execution of the said a4 ee poll of appointment, the net amount of duty claimed by the

_ certain payments of the amount and to the persons therein men- H.- ©. or A.

12. The said executor paid the said sums of £5,905 13s. 8d. and £350 6s. 3d. under protest, and called upon the Commissioner to state and sign this case.

13. The said executor claims that the said deed poll of appoint- ment does not constitute a settlement within the meaning of the said section, and claims that duty is not payable in respect of the property, the subject of the said deed poll.

The only material question for the determination of the Court

: Is the duty payable in respect of the said appointed property ?_

ee Full Court by a majority (Sly and Ferguson J., Pring I dissenting) answered the question in the negative: Simpson v. Commissioner of Stamp Duties (1).

From that decision the Commissioner of Stamp Duties appealed to the High Court.

Leverrier K.C. and 8S. A. Thompson, for the appellant. The Stamp Duties Act 1898 is a consolidation Act. The definition of "settlement " was taken from the Stamp Duties Act of 1880, which - did not contain a provision similar to that in sec. 49 (2) (A) (a). - That section was taken from the Stamp Duties Acts Further Amend- ment Act of 1894, an Act which was quite independent of any other Act. There being no definition of " settlement " in that Act, that word had its ordinary meaning, and would have included such a settlement as that in this case. The Court may look at prior legis- lation in order to interpret sec. 49 (2) (a) (a) (Halsbury's Laws of © England, vol. xxvu., p. 142; Nolan v. Clifford (2)). Primé facie, in interpreting an Act which is purely a consolidation, the Court will endeavour to interpret it in the same way as the Acts which are consolidated. The definition in sec. 3 is not to apply if "the context or subject matter otherwise indicates or requires." It is" not necessary to show that the context or subject matter impera- tively requires a different meaning to be given to "settlement" in sec. 49 (2) (a) (a), but it is sufficient if there is an indication that it should have a different meaning. One indication is that, if "settlement " had the special meaning in sec. 49 (2) (a) (a), the result would be to remove all settlements from taxation under the section,

for they would all be made by deed poll. The section was considered H- ©. oF 3.

in Commissioner of Stamp Duties v. Stephen (1), where it was held to be limited to the exercise of general powers of appointment only. The Act was therefore amended by the Stamp Duties (Amendment) Act 1904, and by sec. 20 it was provided that sec. 49 (2) (a) (a) should be deemed to have extended and should extend to special or limited powers of appointment. If sec. 49 (2) (a) (a) does apply to a special power of appointment, the word settlement cannot have the limited meaning, for a special power of appointment cannot be exercised by a contract or agreement. See Farwell on Powers, 3rd ed., pp. 457, 473. An interpretation section should be applied only in deter- mining the meaning of ambiguous words (Halsbury's Laws of England, vol, xxvur., p. 131), and the form of sec. 3 shows that it should be used only in that way in sec. 49 (2) (a) (a). The word " settle- ment" in the latter section should be interpreted in its ordinary legal meaning, because the idea of the exercise of a special power of appointment is repugnant to the idea of a bargain or contract, the words " contract or agreement " implying a benefit to the appointor. The words " has disposed of " in sec. 49 (2) (A) (a) are not apt words to use in reference to a contract. They refer to a transfer of rights in rem, and not to the creation of contractual rights. If the defini- tion does apply, then a deed poll is a "contract or agreement " between the appointor and the appointees. See Anson on Contracts, Mth ed., p. 72. It is a promise by the appointor that on his death the appointees shall have the property, and that promise cannot be altered, and can be enforced by the beneficiaries. The fact that it is under seal makes it a formal contract. The action for breach of trust is an action ex contractu (In re Maddock ; Llewelyn v. Wash- ington (2)).

A "settlement " according to the definition includes a contract in writing or even a verbal contract, but that is inconsistent with the kind of "settlement " referred to in sec. 49 (2) (a) (a), which must be by will or deed. The words " under any authority enabling

that person to dispose of the same by will or deed, as the case may (

(1) (1904) A.C, 137, (2) (1802) 2 Ch., 220. (3) LR. 18 Eq., 11.

~~ Com- MISSIONER or Stamp Doties (N.S.W.) v Srmpson.

• be," raise an ambiguity in the context, for they may refer to

authority to dispose of in either of two ways, or they may an authority to dispose of by will only or an authority to of by deed only.

Knox K.C. (with him Lingen), for the respondent. Jud tribunals, in interpreting a taxing Act, must " stick to the le the Statute" (Emmerton v. Federal Commissioner of Land Tas ( whether it is or is not a consolidating Act (Bennett v. Minister Public Works (N.S.W.) (2); Williams v. Permanent Trustee Co. New South Wales Lid. (3)). A word defined in an Act must havet meaning somewhere in the Act; if it is only used once, orifitis used in the same collocation, it must have that meaning. fact that, by the Act of 1904, sec. 49 (2) (a) (a) was amended so to include special powers of appointment does not affect the que for such a power as well as a general power of appointment executed by a contract - e.g., a marriage settlement. The es thing in fraud on a power is intention to benefit someone outs the power (Farwell on Powers, 3rd ed., p. 458; Watcher v. P (4) ); so that it cannot be an objection to the exercise of a that it is by a marriage settlement, for instance. Neither the c nor the subject matter requires or even indicates that the d should not be applied to sec. 49 (2) (a) (a); the word "indi cannot be given such a meaning as to put the Court in the pe 0 of the Legislature. The word " requires " means that unless ano meaning is given the section will be insensible. The "indicates" means that the definition may be disreg: the language of the context or subject matter of the p: section shows plainly that the Legislature did not intend to us word defined in the sense of the definition. The words " or agreement" in the definition require that there shall be ment between the parties.

[Isaacs J. referred to Anson on Contracts, 10th ed., p. 4; v. Acting Commissioner of Stamp Duties (N.S.W.) (5).)

As to the words " under any authority," &c., in sec. 49 (2)

@) 7G.LR., 372. (5) (1913) A.C., 747. (3) (1906) A.C., 249.

; cannot affect the question whether the property is disposed of H- C. or A. the authority of the instrument creating the power, that the 1?!"

a= ver is exercised by a contract. A very common form of limitation - Com-

life estate to A with a general power of appointment by deed "i30NE*

-will. If the appointee wishes to sell, he does so by way of appoint- Sirs, Tt could not be doubted that the appointment although a ee ntract was under the authority of the power. Unless the definition """°

fied to sec. 49 (2) (a) (a), transactions for bond fide pecuniary

ier K.C., in reply, referred to Farwell on Powers, 3rd ed., p. ARTON J. referred to Taylor v. Corporation of Oldham (1).]

ordinary sense, even though it do lead, in our view of the case, absurdity or manifest injustice. Words may be modified or where their import is doubtful or obscure. But we assume tions of legislators when we depart from the ordinary meaning he precise words used, merely because we see, or fancy we see,

meaning." Stamp Duties Act 1898 (No. 27 of 1898) purports to be a dation of the taxing Statutes on that subject. Dealing with a

rpretation conveying the probable meaning of Parliament, Griffith . said in Bennett v. Minister for Public Works (N.S.W.) (3): e have to look at the language of the Legislature, and where we

1. 4 Ch. D., 395, at p. 405. (2) 11 GB., 378, at p. 391. (3) 7 C.LLR., at p. 378.

• find that the Legislature has expressed itself in clear and unmis

able language, we must give effect to that language, although re

may conjecture that it was used through inadvertence." 4 in the case of Lumsden v. Commissioners of Inland Revenue ( Viscount Haldane L.C. said: " A mere conjecture that Parliament: entertained a purpose which, however natural, has not been embodi in the words it has used if they be literally interpreted is no sufficient reason for departing from the literal interpretation." : In respect of taxing Acts the rule is even more strongly stat by high judicial authorities. For instance, in the case just cited Haldane L.C. said (2) : - *' The duty of Judges in construing Statut is to adhere to the literal construction unless the context renders it plain that such a construction cannot be put on the words. This rule is especially important in cases of Statutes which impose taxation." These principles must be kept in view in construing sec. 49 of the Stamp Duties Act 1898. That section enacts (sub-sec. 2) that the duties to be levied, collected and paid according to the Schedule shall also be charged upon " (a) all estate, whether real or personal - (a) which any person dying after" a certain date 1894.' has disposed of, whether before or after that date, by will by settlement containing any trust in respect of that estate to tah effect after his death, under any authority enabling that person to dispose of the same by will or deed, as the case may be." By sec. 3 of the same Act "settlement" means any cont or agreement (whether voluntary or upon any good or valuable consideration other than a bond fide pecuniary consideration whereby any property, real or personal, is settled or agreed to b settled, or containing any trusts or dispositions to take effect afte the death of any person. In this interpretation section, the meanings assigned to the wot ds and phrases set forth are to apply " unless the context or sul matter otherwise indicates or requires." The context or subject matter referred to must be that of the Act. There is nothing in th context, in my view, to point out or require any other mea than the section itself assigns to the word " settlement." As fo (1) (1914) A.C., 877, at p. 892. (2) (1914) A.C, at p. 896.

subject of stamp duties on deeds or that of estate duties (sec. 49) which either shows or demands that the Legislature intended the word " settlement " in sec. 49 (2) (a) (a) to bear a larger meaning

than the rather narrow interpretation attached to it by the definition clause, The instrument which is the subject of controversy is a deed poll

executed by Amelia Curtis, deceased, under a power given her by the will of John Thomas Baptist, deceased, to appoint certain property upon trust by deed or will. There is no serious contention that this deed poll is a contract or an agreement within the qualifying words in the interpretation section. If such a contention were serious, I should waste no more words than I am using now in saying that it is entirely untenable.

No doubt, there is great room for speculation as to whether the Legislature wished that the word "settlement" used in sec. 49 _ should bear the restricted meaning assigned to it in sec. 3. It is : conjectured at some length that, because of the concluding words of par. (a), the meaning the Legislature attached to the word in that paragraph was more comprehensive. I should think the _ speculation and conjecture very reasonable as such, and I should bis also think that the wider use of the term " settlement " was more than possibly in the mind of the Legislature. But as Griffith C.J. said during the argument in the case of Bennett v. Minister for _ Public Works (N.S.W.) (1), already cited, " that may be the object of the Legislature, but the question is what have they said." To use the words of Lord Macnaghten (for the Judicial Committee) in r Williams v. Permanent Trustee Co. of New South Wales Ltd. (2), the _ Act of 1898 must "be read and construed as it was enacted. The 's Court has no authority to take the Act to pieces and to rearrange s sections so as to produce an effect which, on the face of the Act iS

asit stands, does not seem to have been intended." To pursue such @ process in the case of any Act would, in my view, be a dangerous departure from principle. If it can be more dangerous in one case than in another, then the taxing of the subject is the last case for 'its application.

the subject matter, there does not appear to be anything in the H. ©. or A.

ew Com- MISSIONER or STAMP Duties (N.S.W.) v. Srpson.

1 am therefore of opinion that the majority of the Supreme were right in their decision, and that the appeal should be di: with costs.

Isaacs J. Amelia Curtis, by deed poll of appointment dated 8 July 1910 creating trusts to take effect after her death, exereis a general power of appointment which, in the events that h happened, she then possessed under her father's will. She d 1915. The value of the property which passed on her death virtue of the appointment was £63,641 9s, 10d. The only property she had at the time of her death amounted to £502 The Commissioner, under sub-sec. 2 (A) (a) of sec. 49 of the 8 Duties Act of 1898, claims as duty on the appointed property 13s. 8d., the balance left after deducting a sum of £295 already upon the deed of appointment.

No question was raised in argument as to quantum, the contention being as to liability. That turns on whether the d a "settlement " within the meaning of the sub-section refei It is not disputed that it is a " settlement " for the purpose of pa

" settlement," and to understand this it is necessary to e amendment of 1904. The Principal Act was passed in 1898 (No. 27), and is

Part I. of the Act of 1898 is preliminary, and contains an int tation section (sec. 3). That section begins: "In this Act, unle context or subject matter otherwise indicates or requires," a follow a number of expressions defined, subject to the words quoted. Among the expressions so defined is " settk Sec. 4 imposes the duties in respect of the several instrum matters described or mentioned in the Act, and in the Se Third Schedules, subject to the exemption mentioned. It d "Such duties shall be denoted in stamps upon the materia which any such instrument or matter is written or exp!

is dutiable is always an "instrument or matter,' and 'that every dutiable "instrument or matter" is written or d on material on which a stamp may be placed. The two ules mentioned contain the whole list of dutiable " instru- and matters."

Second Schedule contains the "Duties on deeds or other ruments relating to transactions between living persons." contains no imposition on "settlements " as such, but contains | statement : "Deed of any kind whatever not otherwise charged

objects of a power of appointment created by a previous nt duly stamped in respect of the same property, or by will probate duty has been paid in respect of the same property rs¢ mal estate."

far, any "deed " of appointment, even such as in the present would be liable under the main part of the Schedule. It would i "instrument of appointment" within the meaning of the ption, and the words "a previous settlement " would appear ecognize it as a "settlement " for the purpose of the Second Jule - which is an important step in the present case.

Third Schedule refers to duties on the estates of deceased and is divided into two parts. Part I. relates to duties e probate or letters of administration" of the deceased own estate at time of death. Part I. is confined to ment of property taking effect after death of settlor," that y which upon his death did not belong to his " estate" use it never was his or because his death was the event under the settlement another person became entitled.

I. of the Act relates to " Duties on estates of deceased Sec. 49 is the first section of this Part. Sub-sec. 1 refers 1a | property of the deceased which constitutes his '" estate " Sub-sec. 2 refers to other property. Par. (a) is

at Com- MISSIONER or STamp Domes (N.S.W.) v. Smpson.

the one with which this appeal is directly concerned. That graph was the subject of decision in Stephen's Case (1) in 1903, which it was held that as the Act then stood par. (a) was co to general powers of appointment. In the following year Parlia reviewed the whole field of stamp duties, in Act No. 24, and stat its intention as to various matters which presented themselves in the working of the Principal Act. It declared by sec. 20 that 49, sub-sec. 2 (A) (a), extended to special or limited powers of app ment. It also by Schedule I. added to the list of specifically mer tioned instruments others therein described. Included in this "settlement," making the instrument dutiable ad valorem as on ; conveyance on sale ; with a provision for deduction of that new duty. from any duty payable under sec. 49 of the Principal Act. Und this provision the duty of £295, in accordance with the practi

hitherto prevailing, was charged and paid on the and, in accordance with the same practice for thirteen years, balance now sued for was claimed by the Commissioner on the deat of the settlor, but this payment was challenged, and hence action and appeal.

In this case two learned Judges of the Supreme Court thought th property was not dutiable, while the third thought it was. Pring J., who thought it was, did not definitely say the case was not withi the statutory definition, but came to the conclusion that though th strict definition " probably " did not cover the case the contex or subject matter indicated or required that the matter fell within the taxing provisions. Sly J. thought there was no " contract agreement," and as in his Honor's opinion the strict definitio could be applied to sub-sec. 2 (a) (a) of sec. 49 so as to make cle sense, that ended the alternative view. Ferguson J. consid all settlements excluded from the strict definition that were n "contracts." His Honor said it was not within the alternative view, but gave no reasons.

All their Honors pointed out the anomaly involved in the respon dent's contention - because a settlement by will (and, they mig! have added, a settlement by deed inter partes) left the prop taxable but a settlement by deed poll under the same circumstance

did not. The usual course here in such cases, as Pring J. justly H- ©. oF A.

observed, is to execute a deed poll; and therefore the Legislature, of necessity, if its intention were as held, must have known that in future such settlements would always be by deed poll, leaving its words as to " will" and its intention as to deeds inter partes inoper- ative, and consequently making sub-sec. 2 (a) (a), and probably also sub-sec. 2 (a) (e), practically futile provisions, with a vast effect on the public finances. This, though an astonishing anomaly in a

_ finance Act, and one for which no reason can be assigned, may be

the inescapable result of the inadvertent language of the Legislature,

and it is the duty of a Court to follow the language to whatever

conclusion it leads, when sensibly read. Such a position, however, must induce great caution before assenting to that construction. No doubt, in a taxing Act an impost requires clear and unambiguous words; but even taxing Acts must be read reasonably. The Golden Horseshoe Estates Co. Ltd. v. The Crown (1) is an illustration (see at p. 488).

The question turns on (1) whether the statutory definition of "settlement " is not, upon its true construction, satisfied by the deed in this case ; and (2) whether, assuming that on a true construction of that definition such a deed as exists in this case is not within it, the context or subject matter of sub-sec. 2 (A) (a) of sec. 49 indicates

_ or requires that the strict statutory definition should not apply.

'The peculiarity of this case is that, in addition to the ordinary task

_ of construing the words of a Statute, the determination of either

of the points mentioned involves the consideration of various fundamental principles of both law and equity. On the right understanding and application of those principles, which the Legis- lature must be assumed to have had in mind, the whole value of Part III. of the Stamp Duties Act depends, and, as will appear, even that of other portions of the Act also. In view of the various Views entertained, there appears to me to be no short cut possible

for judicial expression, and unless the intention of Parliament was

as I conceive it, no short cut would be safe for legislative alteration, So as to avoid future litigation or disturbing the general scheme of the Act. The Act of Parliament seems to me as it stands to have

made a very carefully and clearly balanced scheme of taxatio n, alteration of any part of which probably affecting other parts, a the duty of the Court is to interpret that scheme as it stands, not think Parliament has either blundered or left such an a

past, and in the claim it makes in the present instance. I wou answer the two questions | have stated in its favour.

1. The Construction of the Statutory Definition. - The his

Act of 1898 is, as has been stated, a consolidating Act. It do profess to amend the law. There is therefore a legislative

Parker in Ramdas Vithaldas Durbar v. 8. Amerchand & Ci The original Stamp Duties Act was passed in 1880, and containe statutory definition of settlement as at present. It was amend by 50 Vict. No. 10, which does not affect the question. It w further amended by 57 Vict. No. 20 (1894), sec. 2 of which mad identical provision that is contained in sec. 49 (2) (a) (a) of 1 present Act. It is true the Act was an amendment of the A 1880 and 1886, but it did not expressly say that the statu definition of " settlement " in the former Acts should apply. may be so by implication, but, in determining whether that tion should be made, we must remember that the Act of 18 not expressly apply the definition, and it used language whic facie excluded part of it, namely, the first alternative, and adopted from cognate English legislation an expression which well known to conveyancers, namely, " settlements containing trusts" &c.; and, further, it referred the settlement to a por and not to a contract, and it did this in respect of a new subj matter, namely, property not belonging to the appointor, and as which he primd facie could not be supposed to contract. ; As the law stood, then, before the consolidation Act of 1 would have been a most violent construction to attach to the w " settlement" the meaning that a "contract or agreement " exist in every case, including the Act of 1894.

of 1898. Apart from the preliminary governing words of sec. 3, the definition of "settlement" should be read in conjunction "with the whole document, that is (inter alia) with the aid of the age in sec. 49, sub-sec. 2 (A) (a), namely, "Settlement containing ny trust in respect of that estate to take effect after his death " ; of the language in par. (ec) of the same section, namely, "in this -section the expression ' voluntary settlement' includes any trust, sr expressed in writing or otherwise, in favour of a volunteer ; and of the language in the exemption contained in the Second chedule to the Act of 1898 commencing "any instrument of appoint- " Tt should also receive the aid of the general principles which ntiate a " contract " from a " trust" (see Bank of Scotland v. Macleod (1) ), and from a " disposition" which is a complete transfer, it is, complete in itself (Duke of Northumberland v. Attorney-General (2) and Richards v. Delbridge (3) ). And see the import of the word disposition " in par. (b). So reading the definition, I think its struction will best appear by adhering to its very words in their "own order, but arranging the definition thus: " Settlement"

onal is settled or agreed to be settled, or (2) containing any trusts dispositions to take effect after the death of any person. The (2) means, of course and by necessary implication, a " settle- it" or an instrument containing any trusts or dispositions, &e. whole Act is dealing with "instruments." Internal examina- of the definition materially assists this view. If " contract © agreement" governs the second limb of the definition the result

ualifying "contract or agreement " would be "(i.) whereby any property real or personal is settled or agreed to be settled," and

• Git) containing any rasta or dispositions, &c." a. would

branch includes all cases of contract or agreement aici "settled or agreed to be settled." But if we can

(1) (1914) A.C., 311, at pp. 323-324, (2) (1905) A.C., 406. 7. (3) LR. 18 Eq., 11.

be extraordinary. In that case the alternative words

si now deal with the words of the definition as they stand in the H.C. or A.

Com- MISSIONER or STAMP Doris (N.S.W.) v. Srireson.

imagine a contract that is to be a "settlement " and yet does

"settle or agree to settle " the property, and must, withou

either settling or agreeing to settle the property (that is, either by of trust, or dispositions or otherwise), nevertheless contain the nee : sary trusts or dispositions to satisfy the second limb, and make it a " settlement " within the definition, what strange sort of con' is it to be?

Taking the construction as pressed by the respondents, that th trusts must be in some contract, though not a contract within first limb, it may be a contract for building a house or for purchase of sheep, and, if only the " trusts or dispositions " of tl property referred to in sub-sec. 2 (a) (a) be contained in it, that is; good settlement ; but the same trusts or dispositions, standing b themselves, do not amount to a settlement. That view strongly presses itself, if we give proper weight to the fact that the ph in sub-sec. 2 (A) (a) is "' Settlement containing any trust &e." a not ''Contract or agreement containing any trust &c." Thi construction I have suggested, if correct, reconciles the whole Act removes the anomaly admitted by all, and works reasonably a justly with respect to par. (a) and par. (e) and the Schedules.

But suppose it to be said that the second limb of the definiti as I have framed it, requires the introduction of the word " settle- ment" or "instrument." My first answer is that it is there by necessary implication. My next answer is that if it must be regardet as absent, that simply leaves a blank, because it is too absurd

imagine instead a "contract or an agreement" which does not "settle or agree to settle the property," and which yet is to be regarded as a "settlement." And, if a blank is left, the Court is" then thrown upon the ordinary meaning of the term as used in sub-sec. 2 (a) (a), and that admittedly includes the present deed.

On the true construction of the definition, therefore, my opini is that the present case is one of those expressly provided for by th definition, and, therefore, under sub-sec. 2 (A) (a), in the events that have happened the Crown should succeed. 3

But suppose, as has been contended, that the deed in the present

case is outside that definition, does sub-sec. 2 (A) (a) of see. 49

apply? I now deal with the matter on the assumption that the H. C. or A.

definition is limited to "contracts or agreements" throughout.

(2) Non-application of Statutory Definition - In my opinion, both the context and the subject matter of sub-sec. 2 (a) (a) not only indicate but require that "' settlement " should not, in relation to that paragraph, be limited to " contract or agreement " even if it be so limited otherwise. What appears to me to be the most con- vincing and decisive consideration as to the conteat is that occasioned by the concluding words of the sub-section, namely, " under any authority enabling that person to dispose of the same by will or deed, as the case may be."

The "estate," to be dutiable, must not only be "disposed of," but must be disposed of by (1) a " will" or (2) a " settlement con- taining any trust &c." But if disposed of by " will," that will must

be one which is made " under any authority &c.," generally called

"a power of appointment." A contract to make a will might certainly be made in the case of a general power, but the appointment, if made accordingly, would not be "under the authority " of the contract but of the power. "Authority" connotes permission given to the actor by another, and not the will of the actor himself, Where there is a power to make an appointment by will, even general, a contract to make such an appointment, it must be remembered, is not specifically enforceable, and does not dispose of the property, even in equity. The " authority " must be followed. The same words, however, qualify the "settlement." Both the "will" and the "settlement," being made " under the authority," must conform to it, as is shown by the final words " as the case may be." So that the "settlement " is the "deed " that is authorized

_ by the power, just as the will is the " will" authorized by the

power. The power is to be the source or basis of the will or the settlement, as the case may be; and whether the disposing instrument is a will or a settlement, the " authority " may be given by will or by deed. And it is essential to observe that the "deed" in that case is not required to be a "contract or agreement." 'This fundamental condition that the source or basis of the will or settlement must be the " power " is, upon the assumption made by the respondent's

argument, absolutely inconsistent with the definition (and p: larly with regard to a special or limited power); because on assumption the source or basis of the actual disposition by
deed, where there is a contract or agreement " whereby the pi is" (not "settled," but) "agreed to be settled," is necess

personal " contract " or "' agreement " of the settlor. Conseq the source or basis of a voluntary settlement is, upon that argum assumed to be the voluntary agreement itself. But, as I unders the law - and I regard this as going to the root of this matt voluntary agreement has no force whatever, at law or in e to pass property, unless fully executed. No executory agree voluntary or for value, passes property, even in equity, unl it is specifically enforceable, and a voluntary agreement is specifically enforceable. In the recent case of Central Trust and 8 Deposit Co. v. Snider (1) the Privy Council expressly stated the] on this subject with reference to agreements to settle land, an need not further refer to that case. The House of Lords in Sf v. Keeble (2) laid down the same doctrine as also applicable to ts For the earlier authorities see Farwell on Powers, 3rd ed., pp. 315, where a general power to appoint is treated for this p equivalent to a man's own property. So that even a contract fo valuable consideration whereby property, though belonging to # settlor, is agreed to be settled does not necessarily satisfy 1 requirement of "settlement " in the sense of actually " dis;

of the property either at law or in equity. When the subject matter is considered along with the contex the position becomes, as I respectfully think, quite plain. cardinal fact in this connection is that the property which is subject matter of the sub-section is not the propesty of the se He settles it under an " authority," that is, "a power " bestowed on him by another, and that '' power " is either general or limited. "3 The Act of 1904 (No 24), by sec. 20, declares that sub-sec. 2 (a) ( "shall be deemed to have extended and shall extend " to limit powers of appointment. (See Brunton's Case (3).) The appointment took place in 1914. Sec. 1 requires the Act

(1) (1916) 1 A.C., 266. (2) (1915) A.C., 386. (3) (1913) A.C., at p. 756. :

nt" as requiring a contract or agreement in all cases applies to -sub-sec. 2 (A) (a), so as to control the word " settlement " in that -section, it applies both to a general power and a limited power. In Tatnall vy. Hankey (1) it is said: "' Now the principle which erns the constitution of powers, and their very nature, is this, that whatever is given by the donor" (? donee) 'of a power in execution that power, passes to the appointee, or the party in whose favour r ne power is executed by the donor" (? donee), " but is conveyed, not y force of the appointment, or by any act of the donee, but by the ct of the donor of the power, by virtue in fact of the power, and not of the appointment under it." But how can a definition such as the respondent insists on apply a limited power, which simply prescribes a "deed " as the method appointment ? Suppose a contract made by the donee of the er for valuable consideration to himself, which it is assumed i definition includes as a possible case. It would be a fraud on e power. Suppose, instead, a voluntary agreement that the erty is "to be settled"; what would it amount to? It would e unenforceable. Bearing in mind the law already stated, that no contract that property is to be settled passes any interest in it ss the contract is specifically enforceable, the following passage Farwell on Powers, at p. 315, is important : "Specific perform- cannot be granted of a contract to exercise a limited " power, can damages be awarded, "for to enforce such a contract in way would be inconsistent with preserving that duty of free

• choice which the fiduciary nature of a limited power is held to impose on the donee." The learned authors cite the authorities, and also er to a matter upon which the respondent relied very much in ent, but which really is beside the present question. The mee of a power, though unable to fetter his judgment in the

t to forego his power in whole or in part. He may release (1) 2 Moo. P.C.C., 342, at p. 350.

• altogether, or may fetter it so as pro tanto to release it, and thi

release, total or partial, may prevent him from fully exercising power. And, if he exercises the power, subject to the release he a

But, as already indicated, the source of the exercise of the Pr is the authority of the donor of the power, and not the release abandonment of that power assented to by the donee. This i forcibly shown by the rule of law that a contract by an appoint

under a limited power for a benefit to himself must not even be th reason, much less the basis of the appointment (see per Lord West- bury in Cuninghame v. Anstruther (1)). The contract or agreemi referred to in the statutory definition, being one whereby th property is settled or agreed to be settled, is manifestly not a contr or agreement which is only permitted to operate negatively as an agreement not to settle property. The case of In re Evered; Molineur v. Evered (2) bears out the whole position (see particularly pp. 156- 157, per Lord Cozens-Hardy M.R., and p. 161, per Buckley L.J., now Lord Wrenbury). This last consideration applies as much to a general as to a limited power. The principle is forcibly stated by Lord Hardwicke in the passage quoted by Lord Buckmaster L.C. in O'Grady v. Wilmot (3). The position is further accentuated when the power is in the nature of a trust. (See the authorities colle in Farwell on Powers, at p, 525.)

The subject matter, therefore, considered along with the cont

• for the two are naturally in harmony - demands that the statuto1 definition, assuming the present deed is not within it, should not govern sub-sec. 2 (a) (a). On the further argument, specially directed to this branch of the case, Mr. Knoz's principal arguments were two: first, he said, a settlement by contract or agreement if by deed might be " under the authority" of the power; next, he said, if the definition were not to apply to sub-sec. 2 (4) (a) double taxation would in some cases ensue. The double taxation was said to arise in such a case as the following. If the donee of general power contracted by deed for pecuniary consideration to sell the remainder after his death, then not only the " settlement," as it

(1) L.R. 2 H.L.,Sc., 223, at p. 238. (2) (1910) 2 Ch., 147, (3) (1916) 2 A.C., 231, at p. 246.

is called, would, on his death, render the property taxable under the H. ©. or A.

sub-section, but, if he left property, probate duties on his estate

might be so much the more by reason of the consideration he had

As to the first, it is possible that an appointment by deed of sale where there is a general power of appointment would be considered as an effective exercise of the power. I do not stop to consider whether that is universally true. I rather think it confuses the exercise of the power with the " property " which results from it. (See per Lord Sumner in O'Grady v. Wilmot (1).) But, however

_ it may be with regard to a general power, what I have already said as to the non-enforceability of contracts to exercise limited powers establishes that as to them at least such a contract cannot be said to be " under the authority " of a power. And no argument on this point can be sound that applies the definition of "' settlement " in the sub-section to general powers and refuses it to limited powers. The suggested instance of a marriage settlement does not alter the case. A marriage settlement itself based on a contract to marry is not within the sub-section, because it is not made under any "authority." The exercise of any power of appointment contained in such a settlement is in the same position as if the power were _ contained in any other document.

With respect to the argument as to double duty, it presents no real difficulty. There is no real double duty. Double duty means two duties on the same thing. The suggested case is not that. If it were, then there is double income tax duty whenever money constituting profits of one man passes on to constitute profits of another. Similarly, there would be double duty in every case of sale: the conveyance is taxed, and the consideration money "goes to swell income and is taxed, and again, if in the seller's hands when

he dies, is once more taxed. The argument is unsound. But in

_ any case it could not prevent the natural meaning of the words "under the authority " &c. being applied to them.

There is, however, a more direct answer based on one of the pro- _ Visions of the Act already quoted, namely, the reference to " settle-

ment" in Schedule I. of the Act of 1904. Supposing " settlement "

last thirteen years the Legislature has contemplated (a) proba' on the consideration money, if it still exists as part of the se estate, (b) an ad valorem duty as on sale upon the property sol (c) probate duties under sec. 49 upon the settled property - ded therefrom what may be paid under (6). The matter seems (I say with deep respect) to be divested of any substantial d or doubt.

This would be sufficient for the present case ; but as the m in the Supreme Court decided also that, assuming the Legi used the word "agreement " to cover sub-sec. 2 (A) (a), still the d in this case was not in the circumstances an " agreement" in sense, I think it highly desirable to say that I am not pre to concur in that view, and therefore propose to deal with that
also.

3. Agreement. - Par. (e) of the same sub-sec. 2 (A) is affe well as par. (a). If the respondent rests on the strict legal me: of voluntary " agreement " - which must be larger than " conti

• then the question is: What in law amounts to a volunta agreement by which property is settled so as to dispose of it by w of trust on the death of the settlor? I may note in passing th the word "containing" may, if necessary, be read as "inch (Henfrey v. Henfrey (1)). Now, to test the matter, supp appointees had signed at the foot of the deed a formal ace of the gift, what then would have been the position ? should say, an "agreement" on the face of the document. then, assent otherwise given make any difference in law? opinion, No. (Reuss v. Picksley (2).) If it were necessary for m come to any decided opinion on this, I should, in view of par.

instruments which the definition was dealing with. The authot bearing on the point are principally London and County Ban Co, Ltd. v. London and River Plate Bank Ltd. (3), partici joint judgments of Lord Lindley and Lord Bowen (then !

(1) 4 Moo. P.C.C., 29. (2) LR. 1 Ex., 342. - (3) 21 Q.B.D., 535.

; Hill v. Wilson (2), per Mellish L.J.; Townson v. Tickell (3), Bayley J.; Baker v. Yorkshire Fire and Life Assurance Co. (4), and Thakur Umed Singh v. Sobhag Mal Dhadha (5).

ab-section, because that has been examined in argument only inci- ally so as to compare it with par. (a), and a final view must await vant occasion. But the result of that examination so far as has gone is to make it difficult for me at present to give the ragraph any substantial effect if the view of the majority of the preme Court on this point be adhered to.

Gavan Durry J. On 8th July 1910 Amelia Curtis executed a poll in exercise of a general power of appointment contained the will of her father. The question for our consideration is er the property passing by that deed is subject to taxation er the provisions of sec. 49 (2) (A) (a) of the Stamp Duties Act

ent" in that sub-section. The word "settlement," as far as n aware, occurs only in five places in the Stamp Duties Act 1898, umely, in secs. 3, 49, 58, and in the Second and Third Schedules. definition of the word "settlement" in sec. 3, the whole of sec. the exemption with respect to certain instruments of appoint- mt in the Second Schedule, and the Third Schedule so far a 'it relates to settlements, are taken from the Stamp Duties Act of 1880. Sec. 49 (2) (A) (a) is taken from 57 Vict. No. 20, sec. 2 (1) a), and sec. 49 (2) (a) (e) from 57 Vict. No. 20, sec. 2 (1) (e). When e then existing law was consolidated in the Stamp Duties Act the draftsman made the definition of the word " settlement " icable throughout the whole of the Act instead of only to the ons taken from the Stamp Duties Act of 1880. Were I at y to assume that the intention of the Legislature in enacting a Duties Act 1898 was to reproduce the existing law and (1) 3 Rep., (4) (1892) 1 Q.B., 144,

) LR. Ao 888. (5) L.R. 43 Ind. App., 1. | 3B. & Ald,, 31, at p. 38. e

tices) and the passage in Butler and Baker's Case (1) there referred 1- ed A.

nothing else, I should have no difficulty in coming to the conclu:

such assumption. I must gather the meaning of the Legislai from its language. Sec. 3 says: "In this Act, unless the conte subject matter otherwise indicates or requires, . . . © settlemer

means any contract or agreement (whether voluntary or upon any good or valuable consideration other than a bond fide pecuniary cot sideration) whereby any property, real or personal, is settl 0 agreed to be settled, or containing any trusts or dispositions to t: effect after the death of any person." It is conceded by the dent that the deed poll executed by Amelia Curtis is a settlement as that term is understood by conveyancers, but it is said that iti not a settlement within the meaning of the definition, and that th is nothing in the context or subject matter which indicates or requires that any meaning should be given to the word " settleme in sec. 49 (2) (A) (a) other than that prescribed by the defini To this the appellant's counsel answer that in this case there y such an agreement as is required by the definition, because th beneficiaries could take nothing under the deed poll unless by of an acceptance expressed or implied, and that the appointment and the acceptance constituted an agreement. In my opinio Y collocation of the two words " will" and " settlement" in s (2) (a) (a) and the limitation of the word " settlement " aff by the phrases " containing any trust in respect of that estate "& and "under any authority enabling that person to dispose of same by will or deed, as the case may be," indicate that the « settlement " in the sub-section means an instrument, and that sub-section refers only to disposition of property by an instr which is either a will or a deed, and that if the settlement must! contract or agreement the whole of such contract or agreement be contained in the deed. It is said that if this is so, the conte subject matter indicates or requires that the word " settlem

should here have a meaning other than that provided by the def tion, because it is impossible to exercise a power of appointm by means of an agreement or contract ; that an agreement or contt may accompany such an exercise, or that a power may be exer in pursuance of an agreement or contract, but that the cont itself cannot be the exercise of the power. The deed which is

deed is within the terms of sec. 49 (2) (a) (a) if it contains a trust to take effect after the death of the person disposing of the property, es J agree that an indenture is an awkward and unusual vehicle for the exercise of a special or limited power of appointment, but I 'see no difficulty, much less impossibility, in the donee of a power disposing of property by means of an indenture whenever, to use

• the words of the sub-section, he is authorized to dispose of the same

'its applicability depends not on the substance of the transaction, mt on the form of instrument used, and that Parliament could have intended that a transaction carried out by means of a poll should escape taxation while the same transaction would taxable if carried out by means of an indenture. Such a result omewhat startling, but the sub-section is in fact open to a similar ticism whatever meaning be given to the word "settlement " in it, for it operates only on settlements made under an authority mnabling the settlor to dispose of the property by will or deed, and unless the power of appointment is directed to be exercised me or other of these ways, the sub-section is not applicable. seems to me impossible to say that Parliament might not have nded to impose a tax on property passing by will or indenture, don that only. On the other hand it is not improbable that draftsman of the Stamp Duties (Amendment) Act 1904 overlooked lefinition section in the Stamp Duties Act 1898; it is possible he erroneously imagined that when introduced into the con- idating Act it would not have any application to provisions introduced into the Stamp Duties Act 1898 from sources other than e Stamp Duties Act of 1880. If Parliament has not expressed its e intention it may correct the error, as it has already done with pect to the same sub-section by sec. 20 of the Stamp Duties

to the common law as an indenture is itself a contract, and such a H. C. or A.