Commissioner of Taxes (Vic) v Lennon [1921] HCA 44

High Court of Australia|1921-07-01|Before: Starke J, Higgine J, Mann J

Appeal allowed. Judgment entered for defen- dant. Respondent to pay costs of the

action, of appeal to Supreme Court and of this. appeal.

itors for the appellant, Parkinson d Wettenhall. itors for the respondent, Boothby & Boothby.

giteSlatute - Interpretation - Consolidating statute - Aleration of Tai

Aministration and Probate Act 1915 (Vict.) (No. 2611), secs. 122, 128, 143- M6,

Ss 148.0) of the Administration and Probate Act 1915 (Viet) provides that

'conveyance or assignment gift delivery or transfer of any real or onal property, whether made before or after the commencement of this Att, porporting to operate as an immediate gift inter vivos whether by way tt transfer delivery declaration of trust or otherwise shall - (a) if made within twelve months immediately before the death of the donor; or (6) i made "at any time relating to any property of which property bond fide possession td enjoyment has not been assumed by the donee immediately upon the

a1gih 19 this case, see now the Administration and Probate Act 1921 (Viet.) 315) Ed. OLR.

Duly (Viet.) - Gifts inter vivos - Rate of duty - Aggregation of several HC, oF A.

HIGH COURT (aoe, gift and thenceforward retained to the entire exclusion of the donor orof nal benefit to him by contractor otherwise, be deemed to have made the pry to.which the same relates chargeable with the payment of the duty pay under this Actas though part ofthe estate of the donor."

Held, by Knox C.J. and Starke J. (Higgine J. dissenting), that, where » testator has made more than one such conveyance, &e., the value of th property to which each separate conveyance, &., relates should be added to the net value of the estate of the testator at the time of his death, andthe rate of duty appropriate to the amount so ascertained is the rate of daty payable in respect of such property.

Heward v. The King, 3. C.L.R., 117, followed and applied.

Brunton ©. Acting Commissioner of Stamp Duties (N.S.W.), (1913) AG, 747, discussed

In construing a consolidating Act, the Court is bound by the precise words used by the Legislature, even though their effect is to alter the law.

Decision of the Supreme Court of Victoria (Mann J.) affirmed.

On the assessment of probate duty in respect of the estate of John Lennon deceased, the Commissioner of Taxes for Vietoria stated a case, which was substantially as follows, for the determination of the Supreme Court : -

1, John Lennon died on 27th September 1920 leaving real and personal estate in the State of Victoria,

By his last will and a codicil thereto he appointed John Philip Lennon sole executor thereof, and the said John Philip Lennon has applied for and obtained from the Supreme Court of Vietoria ® grant of probate of the said will and codicil thereto as such executor

The said executor filed in the office of the Commissioner of Taxes a statement specifying the particulars required by sec. 12 of the Administrction ond Probate Act 1913

It appeared from the said statement that prior to his death the above-named John Lennon deceased had made divers separate gifts to each of his respective children ; each of such gifts related to property of which bond fide possession and enjoyment had not beet assumed by the donee thereof immediately upon the gift or thenet forward retained to the entire exclusion of the donor or of any benefit to him by contract or otherwise,

dng the duty in relation to such gifts by adding the total value such gifts to the net value of the above-named John Lennon's teat his death and adopting a rate of duty in respect to the ts appropriate to the total value thus obtained { Such executor thereupon contended that, in assessing the ssoant of the duty upon such gifts, the value of each separate gift ould be added to the net value cf the testator's estate at his dath and the rate of duty appropriate to the total thus obtained

jn relation to such gift. Such executor relied upon the n of the Full Court in Ferguson v. The King (1), tematively, such executor contended that the total value of all gilts given to each separate person should be added to the net ne of the testator's estate at his death and the rate of duty appropriate to the total thus obtained should be adopted in assessing the duty payable upon the gifts to such person. "7, The question thereupon arose with regard to the said statement "the particulars as to what rate of duty should be adopted upon 'ach gifts. Upon the contention of the Commissioner the total "amount of duty is £651 17s, 11d. Upon the contention first stated of uch executor the total amount of duty is £575 18s. 2d.; upon the altemative contention of such executor the total amount of daty is £591 0s, 5d. & It was agreed between the Commissioner and such executor a-case should be stated by the Commissioner for the purpose ofhaving such question determined, and the Commissioner pursuant tosuch agreement states this case 4 Such executor has, pending the decision of such case, paid the 'tnount of £651 17s, 11d. to the Commissioner under protest. The question for the opinion of the Court is:

Which of the three sums above mentioned is the amount of

The case was heard by Mann J., who, following the decision of the Full Court in Ferguson v. The King (1), answered the question by saying that the sum of £575 18s, 2d. was the amount of duty | Payable by the executor.

5, The Commissioner intimated to such executor his intention of H. C. or A.

HG or A. 1921. Commas. SIONER OF Taxes (Wren) Lexxox.

From that decision the Commissioner of 'Taxes now, by speci) leave, appealed to the High Court.

A. H. Davis, for the appellant. 'The intention of sec. 143 of the Administration and Probate Act 1915 is, where there are sever conveyances, &c., which are hit by the section, to make the agaregate value of the property which is the subject matter of those convey: ances, &e., liable to duty, and not to make the subject matter of each conveyance, &e., separately taxable, 'The word "every" in the section is not synonymous with "each" but with "all." 4. comparison with secs. 144, 145 and 146 supports this view, and the use in them of the phrases "all property of any kind whatsoever" and " any conveyance or assignment." does not suggest that the word "every" was used as meaning "each." It is also supported by see, 122, which provides that all property that falls within any one of secs. 143 to 146 is to be included in the executors statement and the value of the whole added to the value of the testator's estate for the purpose of ascertaining under sec. 128 the rate of duty payable. It cannot be deduced from Hevward v, The King () that each conveyance, &c., is to be assessed for duty separately, In fact, in that case and in Lang v. Webb (2) and Horsfall v. Commis: sioner of Taxes jor Victoria (3) there was an aggregation of several gifts or conveyances for ascertaining the rate of duty.

[Kwox C.J. referred to Brunton v. Acting Commissioner of Stamp Duties (N.8.W.), (4).]

If the decision in Ferguson v, The King (5) is a necessary corollary of that in Heward v. The King (1) the latter decision should be reconsidered, inasmuch as it is opposed to the provisions of secs, 122 and 128, (Counsel also referred to Osborne v. Federal Commissioner of Taxation (6).]

Owen Dizon, for the respondent. There is no ambiguity in sec. 143, That section does not contemplate aggregation in any true sense, but it contemplates the taxation of specific property, the rate

(@) 3CLR,, 117, (5) (1920) V. 51; 42 ALT, (2) 13 CLR, 503, 52, (3) 2% CLR. 422, (6) 29 CLR, 169,

Ssalss of the pps property to that of the testator's estate. 1921. ee

r Coma ifthe duty payable in respect of it (In re Draper; Graham y, S!O%RK oF

(1); National Trustees, Executors and Agency Co. v. O'Hea = }, There is a reason for distinguishing between transactions Luswon. h fall within sec. 143 and those which fall within the three © - -

jing sections: and it is that the former are bond fide dis-

of property and the latter are contrivances for evading

'The word "every" in sec. 143 means " each separate are)

js distributive and not collective. The words of sec. 143, being

mand unambiguous, should be given their plain meaning (Com-

sioner of Stamp Duties (N.S.W.) v. Simpson (3)). Heward

The King (4) is a definite authority for the decision in Ferguson

¥, The King (5). If the words "shall be deemed to have made the

property to which the same relates chargeable with the payment of

duty payable under this Act as though part of the estate of the

» are susceptible of more than one meaning, the only alter-

ives are, on the one hand, that the property to which each gift

es is a separate subject of taxation, and, on the other hand,

that the subject matter of the gift is to be deemed to be part of the

tate of the testator for all purposes of taxation. In Heward v.

'The King (4) the Court adopted the fotmer alternative.

A.H. Davis, in reply, referred to Young v. Gentle (6). -[Rwox C.J. referred to Pacific Co-operative Steam Coal Co. v. tiluay Commissioners of New South Wales (7).]

The following written judgments were delivered :- - Kor. 16 Kyox GJ, anp Starke J. The Commissioner of Taxes stated a

for the opinion of the Supreme Court of Vitoria pursuant to

'$8.12 of the Administration and Probate Act 1915 as to the amount

duty payable in respect of certain gifts mentioned in the case.

(BVER, 14; 25am, 290, (0) (1915) 2 KB, 60, at p68, Wie "208 ap 215. (7) (1904) A.C, 795.

sonal property by the donor falling within the ambit of sec. 143 of

The facts and the contentions of the parties are fully set forth iy that case. The parties on the hearing of the case admitted thatthe decision in Ferguson v. The King (1) governed the present case in all respects, and Mann J. gave judgment in accordance with the principles there laid down. An appeal was brought by special leave to this Court. This appeal, therefore, is in substance an appeal from the decision in Ferguson v. The King.

'The case of Heward v. The King (2) decided that real or personal property the subject of a conveyance or assignment, &c., of real ot personal property falling within the ambit of sec. 11 of the Adminis. tration and Probate Act 1903 (now sec. 143 of the Administratim and Probate Act 1915) must, for the purpose of calculating duty under that Act, be treated as an estate in itself, and not as part the estate of a deceased person, It also decided that such property must be aggregated with the estate of the donor for the purpose of determining the rate of duty on that separate estate.

Tn Ferguson v. The King (1) the Supreme Court held that it was a necessary corollary of this decision that such property though aggregated with the estate of the donor for the purpose of deter: mining the rate of duty could not be aggregated with property the subject of other conveyances or assignments, &c., of real and per:

the Act of 1915. This conclusion is well founded. The order in Heward's Case (2) did apparently aggregate two separate assign ments of property falling within sec. 11 of the Act of 1903, but the point apparently eseaped the attention of the parties and the Court,

In the present case Mann J. held that the value of each separate gift should be added to the net value of the donor's estate at his death for the purpose of determining the rate of duty on that gift, and he rejected the Crown's contention that the total value of all gifts should be added to the donor's estate for the purpose of deter mining the rate of duty on each gift. This decision was a proper application of the prineiples established in Heward v. The King (2) and Ferguson v. The King (1). But on the argument before this Court our brother Higgins pointed out that secs. 122 and 128 had been altered since the decision in Heward v. The King was

'helow, or if noticed were regarded as unimportant, Its clear the draftsman did not contemplate any alteration in the law x Explanatory Paper, vol. 1. of the Statutes of 1915, p, xiv.), but ave bound by the precise words now enacted by the Legislature.

'uaroidable in consolidation. Now sec. 122 preserves the distinc- m between real and personal property of which the estate of the duoeased person consisted at his death and property which is deemed

'be made chargeable with payment of duty under sec. 143 of the vt, Further, sec. 122, sub-sec. 1, does not direct that any balance struck as did sec. 97 of the Act of 1890. Tt simply requires a fement specifying certain particulars, An alteration of the law amot be deduced from this section alone, So we must turn to ¢.128,which prescribes that duty shall be paid by every person whom has been granted probate or letters of administration pulated as to its rate at the percentage fixed in Part I. of the Tinth Schedule for an estate of the value (after deducting all debts) tf the final balance appearing upon such person's statement. The

tion, with some immaterial alterations so far as this case is cemed, remains in the same form as it was when Heward's Case i) was decided, Does this section then direct that the value of ll the property mentioned in sec, 122 (a) and (B) be aggregated and duty be paid on the balance remaining after deducting the ts and liabilities of the deceased? The opening words of sec. s, which contain an exemption from liability for duty in the g words, " except in the case of any person to whom has been 'Fanted probate or letters of administration in respect of any estate thetotal value of which after deducting therefrom all debts does not 'aceed two hundred pounds," clearly relate to the estate of a deceased 'Heron properly so called. 'The exception is as to an estate in respect Which probate or letters of administration have been granted. Inthis case an aggregation of all the property described in sec. 122 (a) and (b) is not contemplated. Again secs. 143 and 122 differen- te between the estate of a deceased person and an estate which Snotin fact the estate of a deceased person but which is chargeable

Apparently these alterations passed unnoticed in the HC. or A.

with the payment of duty at a rate determined by the that estate and " the estate of the donor" (cf. Brunton v. deting Cy missioner of Stamp Duties (N.S.W.)(1)). 'The words * calculated to its rate at the percentage fixed in Part I. of the Tenth Schedule an estate of the value (after deducting all debts) of the final b appearing upon such person's statement" require consideration, rates fixed for estates in the Schedule are rates for the estates r and personal of deceased persons, which would no doubt incl property which the Legislature directed should be treated as ps of the estate of a deceased person. Instances of such a direc can probably be found in secs. 144, 145 and 146 of the Act, B when we find that sec. 143, according to the decision in Hevonf Case (2), treats certain property as a separate estate from that the deceased person for the purpose of duty, and that sec. 122 pn serves this distinction in the very words of sec. 143, then sec should be so construed as to give effect to that separation and w to defeat it. Therefore the duty payable under sec. 128 must be the duty payable on the final balance appearing upon the statemeat for the estate in respect of which it is chargeable, 'Thus the mite duty payable in respect of the estate of a deceased person will that fixed by the statute on the amount of the final. balance appes ing upon the statement of that estate, whilst the rate of duty fr the estate described in sec. 143 will be that fixed by the statute a the amount of the final balance appearing upon the statement that estate aggregated with the estate of the doncr. These balan can be computed from the particulars filed pursuant to see, 'The decision of Mann J. was therefore correct, and the ayp should be dismissed.

Hicers J. This is an appeal by the Victorian Commission Taxes from a decision of the Supreme Court on a case stated. J, sitting as the Court, followed, as in duty bound, a decision of Full Supreme Court in Ferguson v. The King (3); and the que is really as to the soundness of that decision.

'The testator, John Lennon, died on 27th September 1920. Bel

of property which admittedly came within see, 143 (b) of the ion and Probate Act 1915. Under this section every eyance or gift of property under such circumstances " shall be deemed to have made the property to which the same relates charge- be with the payment of the duty payable under this Act as though of theestate of the donor." 'The Commissioner contends that the jueofall the gifts should be added to the value of theestate passing wider the will, and the rate of duty (it is a progressive duty) ascer- ined on the basis of the total value of the gifts and the estate, fle executor's main contention, as stated in par. 6 of the case, is the value of each separate gift should be added to the value of the estate proper actually left by the testator and the rate of duty the gift (but not for the estate proper) ascertained on the basis the total, For this contention the executor relies on Ferguson's ue (1); and in Ferguson's Case the Full Court of Victoria relied expressions used in a case in this Court (Heward v. The King (2) There are certain differences in the form of language used in 143 as compared with the language used in sec. 144 (as to ftmsfers made by the testator to himself and another jointly), in M5 (as to the testator exercising a general power of appoint- ment), and in sec, 146 (as to gifts with intent to evade the payment duty). But, passing by these variations in language for the ant, the effect of sec. 143 would seem to be, if taken by itself, every such conveyance or gift is to be treated as making the erty conveyed or given chargeable with duty "as though part the estate of the donor." That is to say, the value of each reyance or gift is to be added to the value of the estate left by will, and the rate of duty is to be calculated on the aggregate of es. Then secs, 122 and 128 point clearly to the same conclusion. kt sec. 122 (1) the executor has to file a statement specifying #) the real and personal property of which the estate of the tator consisted at his death ; (b) all property which pursuant to 'Provisions of secs. 143, 144, 145 and 146 is deemed to be made ble with the payment of duty" (as expressed in sec. 143) 'to form part of the estate of the deceased " (as expressed in () 920) V.LR., 451; 42 ALT, 62. @)3 CLR, 17.

,death the testator made separate gifts to each of his children - H.C. o A.

secs, 113, M4, 145, 146) "for the purpose of estimating the du payable under this Act; (c) the value of the property referred ty in paragraph (a) or paragraph (}); (d) the debts and lit the deceased ; and (¢) the relationship (if any) to the deceased the person or persons entitled under the will." 'Then follow sever sections with regard to the settlement of these particulars; sec, 128 prescribes that, except as to estates not exceeding £2 and as otherwise expressly provided, "there shall be paid to th Commissioner . . . duty calculated as to its rate as the pet centage fixed in Part I. of the Tenth Schedule for an estate ofthe value (after deducting all debts) of the final balance appearing up such person's statement." E

But for what was said in Heward's Case (1) there seems to be no room for doubt under these provisions that the property em prised in all the gifts and the property passing by the will are tob aggregated together, and duty paid according to the value of th aggregate, In Heward's Case (2), however, the late Chief Just Griffith said : - " So far as the duty on that property " (the assigiel property, the property given inter vivos) "'is concerned it is payable at such a rate as if the property actually, as well as notional, formed part of the estate of the testator at time of his death B it does not follow that the rest of the estate - the estate proper is affected, so as to be made liable to pay duty at a higher Though the property assigned is chargeable with duty as though were part of the estate of the donor, it is not made part of his esta 'That particular property is affected as if it were part of the but there are no express words saying that the estate of the dont

on the property assigned, or saying that the persons entitled to th benefit of the estate which passes under the testator's will, shall liable to pay a higher rate of duty on that estate." Itisnot surp isi therefore, that the Full Supreme Court felt constrained by Howard Case to answer the special case adversely to the Commissioner. when Hevard's Case was decided (1905) the present consolidated had not been passed ; and there was no such provision as that in 122 (1) (b), bringing all the property subject to sec. 143 (as wel (2) 3C.L.R., 117. (2) 3 CLR., at p. 124

dajueted in order to find the" final balance" on which duty is to |. Whatever doubts there may have been as to the meaning

ailyelear. This Court in Heward's Case(1) unanimously held that w roperty the subject of the gift is just as much chargeable with

that the duty on the estate proper should not be calculated at higher rate by reason of this artificial addition, Personally, 1 that Hewari's Case, introduced unnecessary complications the interpretation of the Act. But now, under secs, 122 and {no duty is payable at all except on the aggregate sum of the values of the estate actual and the estate artificial (less debts), and the rate for the composite balance as fixed in Part I, of the Tenth ghedule, 'The words of sec. 128 are not that duty is to be caleu- don "the" estate, or the actual estate, of the testator, but for an estate of the value (after deducting all debts) of the final nee appearing" on the statement prescribed in sec. 122 - is, on an hypothetical estate consisting of both the aetual and artificial estates. It is quite true that neither in sec. 122 'nsec. 128 is there any express direction to strike a balance wl to state it, as there was in the Act of 1890 (see. 97). But we find in sec. 122 a direction to make a statement setting 'the particulars and values of the assets and the debts, and in 1% a direction that duty is to be calculated, &e., for an estate the value (after deducting all debts) of the "final balance

on the statement, it is necessarily implied that some

lity to act on the words of the consolidating Act of 1915 as expres ng the present will of the Victorian Parliament (per Cozens-Hardy

in Bristol Tramways and Carriage Co. v. Fiat Motors Lid. (2) ) As for the variances in the language used in secs, 14, 145, 146,

subject to secs. 144-146), with the property actually passing H.-C. ov A.

they are not sufficient, in my opinion, to negative the clear effect

the sections to which I have referred. Sec. 144 prescribes that "all property" the subject of a joint transfer, &c., shall on 4

death of such person "be deemed. to form part of his estate for the purpose of estimating the duty" ; sec. 145 prescribes thatall property appointed under a general power shall upon his death "be deemed to form part of his estate for the purpose" &e. ; see, Mg prescribes that "if any person... makes any conveyance," ke, "with intent to evade the payment of duty" the property shall be "deemed to form part of his estate upon which duty shall be payable under this Part." See. 143, as it was adopted from an English Act, uses different phraseology ; but the property is chargeable with duty "as though part of the estate of the donor" 'The conveyance or act of giving is to be deemed, as it were, a8 con taining a clause or term making the property chargeable with the duty "as though part of the estate of the donor." The languages clumsy as it stands in this Act; but the effect is clear. 'There is sound sense in the statements contained in Mazwell's Interpretation - of Statutes, 6th ed., pp. 557, 564, to the effect that, although itis

always well to use the same word for the same thing and not to

change the language unless a change in meaning is intended, the presumption that arises from variations in language is of very slight force if the words in themselves are sufficiently clear.

There is a decision of the Judicial Committee of the Privy Connel_ under an analogous Act of New South Wales (Brunton v. Acting Com 'missioner of Stamp Duties (N.S.W.) (1) ), to the effect that under that Act there is to be no aggregation of the estates actual and artifical for the purpose of determining the rate of duty on the whole. The decision is, of course, based on a careful scrutiny of that Act a amended, and of the law as it existed at the time of the amendment; and the familiar principle is followed that an intention to increase a tax or duty already imposed cannot be inferred from ambiguous words. Perhaps it is enough to say that the words are not the same in the Victorian Acts as in the New South Wales Acts; but I may also point out that in the New South Wales Act there was no such

icon with regard to the property the subject of dispute (pro- H-€. oF A. sty as to which the deceased had a special power of appointment) 192: here is in the Victorian Act with regard to the property the comes abject of dispute (property given inter vivos): there was no pro- "pee" gon that the property was to be treated as part of the estate of (ViC®) fhe donor - "chargeable with the payment of the duty payable Laxxow ander this Act as though part of the estate of the donor." Their Higsines {ondships actually pointed out the distinetion between the language fue, 52 of the Act of 1898 and the language of sec. 21 of the Act 'sf 1904 (the section in question), inasmuch as sec. sift with intent to evade duty, or a donatio mortis causa, was to 'edeemed "part of the estate" of the deceased ; whereas sec. 21 avided merely (as to property under a power of appointment)

uch estate shall for the purposes of those Acts be deemed to ie the estate of the person dying." These latter words merely meant hut what was not actually estate of the deceased was to be deemed an estate of his for the purposes of duty (see p. 758). More- , there was not in the New South Wales Act any such provision 'that contained in the Victorian Act (secs. 122 and 128 combined) tothe effect that the actual estate and the artificial estate are to leaded together, in values, the debts deducted, and the duty - sole duty - caleulated on the final balance struck, Tam of opinion that the appeal should be allowed; and that question should be answered in favour of the £651 17s Ud.

Solicitor for the appellant, E. J. D, Guinness, Crown Solicitor for Victoria, Silicitors for the respondent, Cleverdon c& Fay.

At a glance

Court

Decision date

Before

Source

Judgment (90 paragraphs)

Cited By (5)