The subject matter of the Act we are dealing with is estate duty in the true sense. It is not a succession duty. In Attorney-General v. Peek[5] the distinction was pointed out. In arguendo Lord Wrenbury (then Buckley L.J.) said[6]: "There is a difference between estate duty and succession duty in this, that the former is a proportion of the dead man's estate which is taken by the State, while the latter is a sum of money which is claimed and taken away from the person who succeeds to the estate." In his judgment[7] the learned Lord Justice again referred to the distinction, and restated it in other words but to precisely the same effect. This is supported by what Lord Shaw said in Winans v. Attorney-General [No. 2][8]. That means that an estate duty looks to the property left by the deceased, and not to persons either in Australia or elsewhere, as the subjects of taxation. Necessarily, the person to whom by law the property is entrusted is made the vehicle for payment of the duty. The scheme of the Act is this: - On the death of any person anywhere in the world who leaves property described in the Act, a duty is imposed on the mass of that property, called "the estate of the deceased person." That estate is defined to include (broadly speaking): (1) all real and personal property actually situated in Australia, and (2) all personal property anywhere if the deceased was domiciled in Australia. The first is in right of territory, and the second in right of jus gentium exercised by Statute. So far for property which legally and ostensibly belonged to the deceased at his death. But further, since experience has shown that gifts inter vivos are frequently made in contemplation of death and intended to operate as testamentary dispositions, though not technically such, it has been for many years the recognized practice of Legislatures to protect the revenue by regarding, for duty purposes, all such gifts inter vivos as if they had not been made. It has further been a recognized test, in order to avoid difficulty, delay and litigation that would often be required to establish that such gifts were in fact made to operate as testamentary gifts, to provide a limit of time before death as determining the question. This has been followed by sub-sec. 4 of sec. 8, and in that case all property within the meaning of that sub-section, which passed from the deceased person by a gift inter vivos within a year before his decease, is deemed for the purposes of the Act to be part of the estate. It follows that not merely Australian property, but also foreign property, which a domiciled Australian had within a year before his death and which was not his at the time of his death, may be his "estate" for the purposes of the Act. Whether Australian or foreign, the gifts inter vivos may have been for a foreign charitable purpose, yet by sub-sec. 4 it becomes taxable as notionally part of his estate. If under sub-sec. 4 no distinction is made between foreign and Australian charitable purposes, we think it tells greatly in favour of the absence of any such distinction in sub-sec. 5. In view of the necessary effect of sub-sec. 4 in this respect, it appears to us that not only is it impossible to say that this provision is to be territorially restricted, but also that it is improbable that the Legislature, if it meant to create the distinction contended for, would have failed to say so expressly. And there is one other consideration, which seems to us to be of weight. The common law of England, notwithstanding its repugnance to inalienability of property, real or personal, always relaxed its prohibition in favour of "charitable purposes," in the large Elizabethan sense, whether in England or elsewhere. Such a purpose is a favoured purpose, not merely because executed in England, but for its own sake. This leads to the conclusion that the mass of property constituting the "estate" is first made primâ facie dutiable, and then such part of it as bears the character, not of private benefit but (inter alia) of "charitable" benefit, is exempted. The Legislature in effect declines to take from such a purpose - irrespective of the nationality of the recipients - any portion of the property. On the whole, we think the following words of Lord Haldane L.C. with reference to the English Finance Act, in Attorney-General v. Milne[9], apply: - "All we are permitted to look at is the language used. If it has a natural meaning we cannot depart from that meaning unless, reading the Statute as a whole, the context directs us to do so. Speculation as to a different construction having been contemplated by those who framed the Act is inadmissible, above all in a Statute which imposes taxation." It is scarcely necessary to add that, as this conclusion is reached on the nature and language of the particular Statute, it leaves entirely untouched the effect of provisions somewhat analogous in other Statutes.

The Commissioner also relied on sec. 21 (b) of the Acts Interpretation Act 1901. We think that that section does not apply; and, if it did, having regard to the subject matter and the language of the Statute under consideration, the contrary intention appears so far as relates to the question we are dealing with.

For these reasons, we are of opinion that the first question should be answered in the negative, and the second in the affirmative.

The question raised by this case is whether the exemption from estate duty of so much of an estate as is bequeathed for charitable purposes provided for by the Estate Duty Assessment Act 1914, sec. 8 (5), is limited to bequests for charitable purposes within the Commonwealth. The Act by sec. 8 (3), (4), sweeps into the net real and personal property physically situated in Australia, and also brings constructively within the Act personal property wherever situate. Property which, in reality, is the subject of "death-bed" gifts of semi-testamentary dispositions is also deemed to be part of the estate for the purpose of the Act. This aggregation of property is Australian, to be taxed for Australian purposes by an Australian Statute.

The controversy in this case is concerned with the ambit of sec. 8 (5), and the scope of its operation. That sub-section is as follows: "Estate duty shall not be assessed or payable upon so much of the estate as is devised or bequeathed or passes by gift inter vivos or settlement for religious, scientific, charitable or public educational purposes." In the construction of this sub-section I differ from my brethren, and venture respectfully to apply to its interpretation the language of Cozens-Hardy M.R. in Tomalin v. S. Pearson & Son Ltd.[10]: - "It seems to me reasonably plain that this is a case to which the presumption which is referred to in Maxwell on the Interpretation of Statutes in the passage at p. 213 ... must apply: In the absence of an intention clearly expressed or to be inferred from its language, or from the object or subject matter or history of the enactment, the presumption is that Parliament does not design its Statutes to operate beyond the territorial limits of the United Kingdom." Society, no doubt, encourages benevolence and charity, but it is not the proper function of a State to reach outside its boundaries into foreign countries and apply its revenues to the support of religion, charity or education for the benefit of mankind at large. Ordinary State policy and statutory presumption are opposed to the implication of the grant of a privilege by the Legislature such as that now contended for. It is familiar knowledge that certain Statutes of individual States of the Commonwealth, speaking generally, exempt from rates churches, universities and colleges, hospitals, benevolent institutions and buildings used exclusively for charitable purposes, and that, with the exception of churches, these institutions and purposes are subsidized out of the public revenues of their respective States, and I think that sec. 8 (5) is framed so as to harmonize with the general local law and similarly to exempt local purposes.

The wider construction claimed for the sub-section would occasion difficulties in the collection of the revenue, and necessitate the settlement of the rights of the parties litigiously. Assuming a bequest is made for some foreign charitable purpose, a Court would be called upon to inquire and determine whether the proposed object would be good as a charitable purpose in Australia, and, if so, whether it is good according to the law of the country in which the gift is to be applied. The Act in question was passed during the War, and the exemption provided by sec. 9 in favour of the estates of certain soldiers and sailors who served against enemy countries presents some incongruity with an exemption in favour of a charitable purpose in an enemy country.

I do not propose to speculate as to the possibility of a different construction of the sub-section. I base my opinion upon the language used. The so-called generality of the sub-section is restricted not merely by the considerations I have referred to, but also by the language used in the Act itself indicating a limitation of operation. Take, for example, the words "public educational purposes," which include the establishment or endowment of an educational institution for the benefit of the public or a section of the public. What public? Surely not the public of Germany, Bulgaria, Turkey or China. My answer is: Certainly not, but the public or a section of the public of Australia. These words, in my opinion, colour the other words used in the sub-section, and lead me to the conclusion that the Commissioner's contention is correct.

In my opinion the answer to the first question is Yes; and to the second, No.

First question answered in the negative, and second question in the affirmative.

Solicitors for the appellants, Dibbs, Parker & Parker.

Solicitor for the respondent, Gordon H. Castle, Crown Solicitor for the Commonwealth.

[2] (1907) 1 K.B., 746, at p. 764.

[10] (1909) 2 K.B., 61, at p. 64.