Livingston v Commissioner of Stamp Duties

Livingston v Commissioner of Stamp Duties - [1960] HCA 94 - HCA 1960 case summary — Zoe

[4]

Mrs. Coulson's death was caused by a motor accident which also caused the death of her husband. They had married little more than a fortnight before, she then being the widow of Hugh Duncan Livingston deceased. The latter had died on 17th November 1948 domiciled and resident in the State of New South Wales. The property which he left included some freehold and leasehold land in Queensland, on which he carried on a grazing business, and the stock and plant of the business. At his death he was also a member of a partnership of five which carried on a grazing business on leasehold land in Queensland, and in addition he was entitled to an undivided fourth interest in some other freehold and leasehold land in Queensland used for grazing. By his last will he appointed his wife his executrix and two other persons his executors. After a specific bequest to his wife he devised his real and bequeathed the residue of his personal estate to these three persons as his trustees. After payment of debts, testamentary expenses and death, estate and other duties, he declared trusts of this residuary estate as to one-third thereof to his wife absolutely and as to two-thirds upon special trusts in favour of his two sons, one of whom is the appellant Hugh Duncan Livingston. There were certain gifts over in case of failure of these trusts. Among the powers conferred there are powers of conversion and of management but there is no direction to convert. Probate of this will was granted by the Supreme Court of New South Wales on 13th October 1949 to the executrix and executors who are domiciled and reside in that State. Probate of the will was resealed in Queensland by the surviving executors after the death of the executrix, namely on 13th February 1952. At the date of her death, although three large payments on account of duty chargeable by the State of New South Wales on property of the testator there dutiable had been paid in that State, the assessment of duty had not been completed and as it turned out further large payments remained to be paid. Commonwealth estate duty had not been paid or for that matter assessed. There were, too, other steps to be taken in the administration of the estate which was by no means fully administered. The residue of his estate had therefore not been ascertained. It was the claim of the appellant that accordingly at the time of her death Mrs. Coulson had no proprietary right or interest in the specific assets in Queensland or elsewhere which the testator's estate comprised but only a claim against his executors for the due administration of the estate so that the residue should be ascertained and held upon trust as to one-third thereof for her. This, he maintained, was a chose in action or chose in equity subsisting in New South Wales where her fellow executors and herself resided and where the administration of the estate proceeded, the place moreover under the laws of which they were constituted and the trust would be enforced. On the death intestate of Mrs. Coulson her only right of property passing to him as her administrator, so he claimed, was this New South Wales right or chose in action. Except for what she might obtain in the fulfilment of this right she possessed no property in Queensland and moreover it was not a right situated in Queensland but in New South Wales. Notwithstanding this contention the Commissioner (the respondent) issued a notice of assessment of succession duty. The notice was dated 20th April 1956 and was addressed to the appellant's solicitors in Brisbane. It followed substantially Form R in the Schedule to The Succession Duties and Probate Duties Regulations but it nowhere mentioned the appellant by name as the party assessed or otherwise. The "successor" was given as Coulson (that is her husband killed by the motor accident) and others and the relationship as husband and children, the assessable amount was given as R (i.e. realty) £16,224 5s. 4d., P (personalty) £13,358 2s. 1d. and the rate of duty as fifteen per cent. The duty amounted to £4,437 7s. 1d. The appellant paid this sum together with interest to the Commissioner and appealed to the Supreme Court by petition. The appeal was referred to the Full Court and that Court for reasons to which it will be necessary to refer later dismissed the petition. From the order of dismissal the present appeal was brought to this Court as of right.

[5]

At the same time as the foregoing proceedings with respect to succession duty were in train, parallel proceedings took place with respect to the duty payable under s. 55 of the Act in respect of every grant of probate or of letters of administration. It is true that letters of administration in respect of the intestate estate of the late Mrs. Coulson had not been applied for in Queensland. But by s. 2 of The Succession and Probate Duties Acts Declaratory and Amendment Act of 1935 Q. (26 Geo. V No. 27) it is declared that (to the extent of the property described in the section) the Commissioner may assess and recover duties "notwithstanding that probate or administration has not been granted in Queensland or if probate or administration of such property has been granted in any place outside Queensland without the reseal in Queensland of such probate or administration." Whether the respondent Commissioner purported to act under this or some other provision, he is said to have required the appellant to file an account of Mrs. Coulson's estate and, under protest and without prejudice to his contention that no succession or administration duty was payable on the death of Mrs. Coulson, the appellant filed an account of her estate. Doubtless this is the same account and same protest as has already been referred to. The respondent Commissioner gave notice to the appellant's solicitors of his assessment of administration duty. The notice followed Form 0 of the Regulations and stated that the Commissioner had assessed the administration duty payable in the estate of Mrs. Coulson at £607, proceeding to say, as if a grant of letters of administration had been applied for and made, that upon the receipt of the sum the grant would be duly stamped and returned to the Registrar of the Supreme Court. The notice then stated the value of the property upon which such sum had been assessed, but that is a matter with which this appeal is not concerned, subject to a particular item to be mentioned in due place. The appellant appealed by petition to the Supreme Court against the assessment to administration duty but the Full Court dismissed the appeal. As the amount involved in the case of administration duty is insufficient to enable him to appeal as of right the appellant applies for special leave to appeal. Special leave is not opposed and the case of administration duty was argued as an appeal.

[6]

The appeals present difficulties both of substance and of procedure. In the end they must be resolved by the application of the provisions of the Acts. But to apply the Acts, which are notoriously involved and obscure, it is necessary first to determine what under the law of Queensland were the beneficial rights, if any, of Mrs. Coulson in respect of the assets in Queensland forming part of the estate of her late husband. The legislature of Queensland did not follow the other Australian colonies in providing that upon death realty should vest in the personal representative and the rule that it passed directly to the devisee continued (see Kerr, Australian Lands Titles (1927), p. 457). By the enactment of The Public Curator Acts 1915 to 1957 Q., s. 30, all property, including land, not disposed of by will vests in the Public Curator until a grant of letters of administration: see ss. 12 and 14 of The Intestacy Act of 1877 Q. as amended. As probate of Livingston's will was not resealed until 13th February 1952, at the time of Mrs. Coulson's death on 8th July 1950 the devolution or vesting of his assets in Queensland was governed by the general law. Real estate vested in her and the two executors as devisees. Actually a transmission to them in that character was produced at the Real Property Office in Brisbane and entered upon the titles after her death. Under the law of Queensland this registration meant that she must be considered as one of the three proprietors of the legal estate in the land in question at the time of her death. The law of Queensland would also regard the chattels personal and chattels real as vesting in them as well as their testator's interest in the partnership. The beneficial interest would of course depend upon the provisions of the will. In these appeals we are concerned with the law of Queensland. In the courts of Queensland the law of New South Wales is not foreign law in the same sense as it was before federation. For there is s. 118 of the Commonwealth Constitution and there is the State and Territorial Laws and Records Recognition Act 1901-1950 Cth . In this Court where the law of all parts of the Commonwealth and its Territories is a matter of judicial notice the law of New South Wales is ascertained on that footing. But nevertheless it is the law of Queensland that governs the case. It is well to begin by seeing if any and what beneficial interest in the items of property in Queensland of her husband's estate existed under that law in Mrs. Coulson at the time of her death. The appellant denies that any legal or equitable interest in her husband's estate whether in Queensland or New South Wales then existed in her beneficially: her right was to have the assets applied in a due course of administration and until the administration was completed the residue of which the trustees were to stand seised and possessed upon the trusts of the will under which she was cestui que trust could not be ascertained. The locality of this right was New South Wales. It is hardly necessary to say that, for the appellant, the important thing is not whether such a right subsisted under the law of New South Wales with a locality in that State but whether under the law of Queensland Mrs. Coulson had no equitable interest in the property in Queensland forming part of the estate of Hugh Duncan Livingston deceased. In Lord Sudeley v. Attorney-General [1] , a decision that has been the source of much difficulty and misunderstanding, the question was the liability to the inclusion in the estate of a domiciled English woman for the purpose of English probate duty of the value of certain mortgages in New Zealand. She was not the mortgagee. But at the time of her death she was entitled under the testamentary dispositions of her late husband, who had died only fifteen months earlier, to a fourth share in his then unadministered estate. That estate included the mortgages in New Zealand. These doubtless are to be considered movables and not immovables for the purposes of our private international law: see per Cussen J. in In re Ralston [2] ; per Salmond J. in In re O'Neill [3] and McClelland v. Trustees Executors and Agency Co. Ltd. [4] and the paper in (1928) 2 A.L.J. 85 there referred to which was contributed by Sir Frank Kitto. In Lord Sudeley's Case [1] no point was made of the fact that the mortgages were movable though perhaps in considering that decision it is a matter that ought not to be left out of account. At all events the order made by the majority of the Court of Appeal [2] which the House of Lords affirmed, appears to have been expressed in accordance with the prayer of the information and declared that one-fourth part of the value of the mortgage securities in New Zealand forming part of the residuary personal estate of the husband should have been included in the value for the purpose of probate duty of the personal estate of the deceased [3] . Lord Herschell said that the fallacy of the argument in support of the appeal rested on the assumption that the deceased or her executors were entitled to any part of the New Zealand mortgages as an asset - she in her own right or they as her executors. His Lordship continued, "I do not think that they have any estate right or interest, legal or equitable, in these New Zealand mortgages so as to make them an asset of her estate." [4] . An important gloss was placed upon the language of Lord Herschell by Lord Russell of Killowen in Skinner v. Attorney-General [5] , where an unsuccessful attempt was made to apply the decision to the operation of a provision of a will of a testator by which he had charged an annuity bequeathed by the will upon an unascertained residue. It was attempted to establish that the charge did not attach to the individual or "specific" items of his estate but only to the undefined residue considered as an inseparable mass, that is to say, independently of its then present components. Lord Russell said that he emphasized the last ten words of Lord Herschell's sentence, viz. the words "so as to make them an asset of her estate", "which", his Lordship said, "show clearly that the interest which was being repudiated was a proprietary interest. The case is not in any way a decision that the widow or her executors had no interest in the mortgages " [6] . In the same case in the Court of Appeal Greene M.R. spoke of the line of authorities in which Lord Sudeley's Case [1] stands and said, "They were concerned with the local situation to be attributed to property for purposes of probate or probate duty," (scil. in England) "and the questions which arose were two (a) what was the property which the deceased owned at his death? (b) what, for the purposes of a grant of probate" (scil. in England) "was its local situation? The property in question being merely a right to have another estate duly administered, it was held that the local situation of the property was in the country of the forum of administration of that other estate." [1] . This explanation may perhaps be said to adopt a, or the, forum concursus and thence to import the lex loci concursus as supplying the entire governing law. Devolution and administration of assets are two distinct things. The latter must involve many matters of substantive right, to take an example the order or priority of payment of debts. But "the crucial difference between the two concepts is that administration from the point of view of the administrator is not beneficial but in the nature of a duty, while succession is essentially of benefit to the successor.": The Conflict of Laws (1st ed.) R. H. Graveson, at p. 288, q.v. It is devolution or succession that is the subject of the present question and devolution or succession as recognized by the forum situs, if not by the lex loci situs. No one need doubt that the forum concursus or lex loci concursus may treat a right to share in the ultimate distribution as a single right devolving under that law and subject to whatever tax may by that law be imposed on devolution. That is what is done by the actual decision in Lord Sudeley's Case [2] . But to do so does not imply a denial of the existence under the lex loci rei sitae of a beneficial right in the property and devolution of that right taxable under the law of that place. Lord Sudeley's Case [3] itself appears to provide an example. For according to the report of the argument [4] , counsel for the defendant executors said that the defendants had registered in New Zealand a claim to the mortgaged property and had paid a sum for probate duty there. But the contention that Mrs. Coulson had at her death no equitable interest in the property in Queensland forming part of her deceased husband's estate is put less upon the basis of the law of his domicil or her domicil, less on the lex loci concursus, than upon a positive doctrine attributed to the law, of law and of equity, which apparently is taken to be part of the law of Queensland. That would mean that according to the law of Queensland the items of property that have been enumerated forming part of the estate of Livingston deceased vested in his executors (whether as devisees or as executors) subject to their duties of administration but not beneficially and yet subject to no equitable estate or interest of any kind in a cestui que trust. It would mean that the beneficial interest is nowhere until the completion of their duties of administration. Moreover the theory seems to be that the forum to which those who would become interested in residue when ascertained must resort to enforce performance of such duties is the Supreme Court of New South Wales.

[8]

This diversity between the duties or functions of administration and the equitable interests of beneficiaries is no new thing. It appeared even in Farr v. Newman [1] which at the end of the eighteenth century established, not without the dissent of Buller J., that even at law the goods of the testator could not be taken in execution for the executor's own judgment debt. Here Buller J. contrasted the rule at law with that in Chancery which he described thus: "The Court of Chancery consider the fund as debtor; and therefore they pursue that; collect it all in their own hands, under the notion of taking an account; call all persons before them who have any demand on that fund; and distribute it amongst all, according to their priorities at law (if they have any); or if not, equally. But that Court has never said that, if the effects of a testator get bona fide and for a good consideration into the hands of a third person, they will take them from him." [2] . Needless to say equity has never deprived a third person taking the legal title bona fide and for value of any property. But the key to the matter lies in the last sentence of Buller J. For it impliedly recognizes that an equitable interest attaches to the assets, not the interest of creditors, but of a beneficiary. It was not long before this was made very clear in Chancery. In Hill v. Simpson [3] a bill by two persons entitled to general pecuniary legacies was filed against bankers to whom an executor had transferred assets to secure his personal debt and relief was decreed by Sir William Grant M.R. In McLeod v. Drummond [4] Lord Eldon referred to the decision of the Master of the Rolls and said: "I cannot conceive why in a case falling within the exception, a creditor and a specific legatee should be able to follow the assets; and not a pecuniary or residuary legatee. The case of a residuary legatee is stronger than that of a pecuniary legatee. It is said in Farr v. Newman [1] , that the residuary legatee is to take the money, when made up: but I say he has in a sense a lien upon the fund, as it is; and may come here for the specific fund. If it is wrong, as against a creditor, for the executor to apply the fund in payment of his own debt, why is it not equally wrong, both in Law and Equity, to allow a third person wilfully and fraudulently to take from the executor that money, which in his hands the residuary legatee can call for, as the specific property of the testator?" [5] . By the "exception" Lord Eldon means the exception to the rule enabling an executor to sell or pledge assets to a bona fide purchaser. The words with which the citation from Lord Eldon concludes make it clear that the residuary legatees' ultimate title to the specific property is the basis of the continuing equitable interest. What then did Lord Russell mean when he said that what Lord Herschell was repudiating was a proprietary interest? It is not easy to say unless the words mean an unqualified ownership or interest. It cannot mean that he was asserting a complete absence of any equitable interest. An equitable interest is not ownership; but it is proprietary. Its true nature was explained luminously by Maitland in the ninth, tenth and eleventh of his Lectures on Equity . In Australia we have the advantage of the able and cogent examination of the matter by the late Sir Frederick Jordan C.J. in McCaughey v. Commissioner of Stamp Duties [1] . At one point in his judgment his Honour said this and it is difficult to see how in principle there could be any other view: "The idea that beneficiaries in an unadministered or partially administered estate have no beneficial interest in the items which go to make up the estate is repugnant to elementary and fundamental principles of equity" [2] . However his Honour concluded with what is perhaps a calculated paradox which he attributed to the coercive effect of authority to which he surrendered. Perhaps the surrender was needless and the paradox is not an unavoidable consequence. Some years later this Court dealt with the difficulty in Smith v. Layh [3] . After quoting a passage from Lord Cave's judgment in the case of Dr. Barnado Homes National Incorporated Association [4] we said this: "But it is not the consequence that the residuary legatee or next-of-kin has no right of property in the totality of assets forming the residue of the intestate estate. The beneficial interest is not vested in the legal personal representative, subject to the rights of creditors. The right of the next-of-kin or residuary legatee to have the estate properly administered and to receive payment of the net balance gives them an equitable interest in the totality and therefore in the assets of which it is composed: cf. Horton v. Jones [5] . It is what equity calls property: a jus in personam ad rem " [6] . In the paper of Dr. Hanbury (1928) 44 L.Q.R., at p. 471, to which we there refer that learned writer remarks: "However much equitable rights begin to look like iura in rem they cannot belong to this category because they are always liable to be defeated by a bona fide purchaser for value of the legal estate." But it is none the less true that in virtue of her share in the residue of her first husband's estate Mrs. Coulson was entitled at her death to an equitable interest in the Queensland property forming part of his estate. The interest is not to be defined in the terms appropriate to legal estates or chattels real. But it is an equitable interest capable of description by reference to the rights which it gives to share in the residue after debts, death duties or other liabilities have been discharged or otherwise cleared. That equitable interest is in or in respect of land and other property situate in Queensland and as such it devolved on the death of Mrs. Coulson upon her next of kin and, if he survived her for any interval of time, her husband.

[11]

Section 4 of The Succession and Probate Duties Acts includes in its description of a "succession" every devolution by law of any beneficial interest in property upon the death of any person to any other person in possession or expectancy. The word "succession" is defined by s. 3 to denote any property chargeable with duty under the Acts. By s. 4 the dispositions and devolutions which the section describes shall be deemed to confer on the person entitled by reason of such disposition or devolution a "succession"; and the term "successor" shall denote the person so entitled; and the term "predecessor" shall denote the settlor, testator, obligor, ancestor or other person from whom the interest of the successor shall be derived. On the death of Mrs. Coulson the equitable interest to which she was entitled in the property in Queensland forming part of the estate of her late husband passed to or became vested in the Public Curator under s. 30 of The Public Curator Acts. But that seems to be immaterial, for the persons to whom the beneficial interest in that equitable interest passed were her next of kin as for brevity we may call them, that is her two sons and perhaps her husband. It may be taken that a beneficial devolution is the subject of the duty. It follows that together there was a devolution upon the two sons and perhaps the husband amounting to a "succession". Section 12 provides that there shall be levied and paid to the Crown in respect of every succession according to the value thereof at the time when the succession takes effect the duties that the section proceeds to prescribe. It seems clear enough having regard particularly to s. 43 that every successor is liable for duty, though curiously enough the statute nowhere says so directly and totidem verbis. There are however a number of references to the liability, of which it is enough to mention two. Section 20 provides that the duty imposed by the Act shall be paid at the time when the successor, or any person in his right or on his behalf, becomes entitled to his succession or to the receipt of the income and profits thereof. Secondly, s. 46 provides that "the following persons, besides the successor, shall be accountable to Her Majesty for the duty payable in respect of any succession"; then follows a statement of various capacities held by persons in whom the property or its management might be vested. If therefore it is correct that the next of kin are successors notwithstanding that the interest immediately became vested in the Public Curator, it only remained to assess the next of kin or one of them. The third paragraph of s. 47 seems to confer power upon the Commissioner to make such an assessment. The assessment is made by the section "subject to appeal as hereinafter provided". The provision evidently referred to by these words is s. 50 which enacts that any accountable party dissatisfied with the assessment of the Commissioner may appeal by the procedure there laid down, a condition being the payment of the duty. A statement of the grounds of appeal must be furnished and the appeal is by petition, the procedure followed in the present case. A serious difficulty is raised by the fact that s. 50 is expressed to give an appeal only to "any accountable party". Can he appeal on the ground that he is not accountable, as Hugh Duncan Livingston did in the present case? Philp J. after a full examination of the provisions of the statute reached the conclusion that an appeal on such a ground does not lie and in his judgment Wanstall J. and Stable A.J. agreed. In their view to resist assessment on the ground that the party assessed was not accountable some resort to other remedies was necessary. He might contest a summons under s. 48. Section 56A (2) at first sight may appear to create great difficulty in contesting liability except on appeal once an assessment has been made, but it is susceptible of a limited construction and probably should be restricted in its conclusive effect to the procedure of assessing and the amount and particulars of property and value. Yet par. (b) of s. 56A (2) (i) seems rather to imply that on appeal everything that is covered by the paragraph is open to attack. The question whether a party denying his accountability may appeal for the purpose of establishing that he is not accountable has apparently not been raised in Queensland before and there are examples of proceedings where an appeal has been used for such a purpose. On the other hand, the view adopted by Philp J. is that which was taken in England of s. 50, a provision which even bears the same number in the Succession Duty Act 1853 (16 and 17 Vict. c. 51). In Hanson on Death Duties, 8th ed. (1931) p. 559 there is a note to the section containing this statement: "The right of appeal conferred by the present section only applies to cases where there is a question as to the value of the succession or the details of the account; cases, in other words, where the liability to some duty is admitted, and the only question is as to the amount." It might not seem impossible to construe the expression in s. 50 "any accountable party dissatisfied with the assessment" as meaning "any party accountable according to the assessment who is dissatisfied" and one may be permitted to hope that such a construction accords with legislative policy. But in strictness the question does not arise in this case if the appellant is accountable and the foregoing reasons show that he is accountable. It is true, or at least so it would seem, that he was assessed because he had obtained letters of administration to his mother's estate from the Supreme Court of New South Wales. If so, the reason was misconceived. That would neither give a title to the equitable interest in Queensland nor expose him to assessment. He is accountable as one of the next of kin upon whom the equitable interest evolved under the law of Queensland.

[12]

As to probate and administration duty there is a separate difficulty. What has already been said shows that there devolved an equitable interest in property in Queensland and if application had been made to the Supreme Court of Queensland for a grant or reseal of letters of administration of Mrs. Coulson's estate no doubt the duty would have been assessable. The judgment of E. A. Douglas J. in Re Guest [1] was to the effect that the duty was only assessable when such an application was made. His Honour had referred to s. 11B which provides that any person who takes possession of or in any manner administers any real property of a less tenure than an estate of freehold or any personal property whatsoever in Queensland or any interest therein belonging to any person who dies (after the date specified for the commencement of the provision) shall be liable to a penalty unless within a given time he obtains a grant or reseal of probate or letters of administration. The learned judge took the view that a suit by the Crown to recover the duty might lie against such a person. Referring to this in his judgment which was delivered in July 1935 he said: "I have already indicated that under The Succession and Probate Duties Act, 1892 to 1931 , in a properly constituted action after the lapse of the necessary time, I think the petitioners would be liable to probate duty in respect of personal assets and real property of a less tenure than freehold situated in Queensland." The case was evidently regarded as revealing a defect in the legislation and in December of the same year the Parliament of Queensland passed The Succession and Probate Duties Acts Declaratory and Amendment Act 1935 . By s. 2 it was declared that the duties were payable, to put it shortly, independently of the grant or reseal of probate or letters of administration and the duties might be assessed and recovered accordingly. The operation of the section however is limited to "any real property of a less tenure than an estate of freehold or any personal property whatsoever in Queensland or any interest therein of a person who dies taken possession of or in any way administered" without grant or reseal of probate or letters of administration. This limitation appears in the judgment of E. A. Douglas J. in the passage already quoted and comes from s. 11B. It is not clear, however, why the limitation is made. The duty is imposed by s. 55 of the Principal Act and the Schedule upon all the property of the testator or intestate. The reason probably is to be found in the devolution of a descendible estate of freehold which if devised vested in the devisee, though as from 1878, if undisposed of it was distributed in the same manner as personal estate and since 1915 vested in the Public Curator: ss. 12 and 13 of The Intestacy Act 1877 and s. 36 of The Public Curator Act of 1915. The point however was not made in support of the appeal and on the whole it may be right to regard the anomalous equitable interest of Mrs. Coulson as within the provision.

[38]

Sudeley's Case [2] has been followed and applied in a large number of reported cases, and has doubtless been acted upon in very many other cases. In In re Smyth [4] a testator, resident and domiciled in England, gave real and personal property in Jamaica to trustees upon trust for certain persons for their lives, and after the death of all of them upon trust to sell and divide the proceeds between certain other persons. The trustees of the will were resident and domiciled in England and one of them proved the testator's will in England. One of the persons entitled in remainder died while persons entitled for life were still living. The question arose whether English probate duty was payable in respect of his interest under the testator's will. It was held by Romer J. that that interest was situate in England, and that probate duty was payable upon it. I will quote at some length from the judgment - partly because it disposes of the relevance of the argument that in some conceivable circumstances a suit might have been brought by Mrs. Coulson in a Queensland forum in respect of the testator's Queensland property. Romer J. said: "The right of the legatee as against the trustee was only to have the trusts of the will administered. Administered where? The testator was domiciled in England, his will was proved in England, his trustee was in England, and the money recoverable would in the ordinary and proper course be brought to England. The trustee could only be properly and in the ordinary course sued in the English Court by the legatee, who was in England. It was suggested as against the Crown that possibly under some circumstances an action might have been brought by the legatee to enforce his rights in Jamaica. I am bound to say that at present I do not see what action could have been properly brought there. But even admitting that under some conceivable circumstances or change of circumstances some action might have been brought there, the question is not in what place under extraordinary circumstances an action might be brought, but what place under existing circumstances was the natural and proper one in which the legatee should enforce his rights - in other words, what was the proper forum for deciding upon the legatee's claim; and the answer to this clearly is that the forum was English." [1] .

[42]

Apart from cases which are concerned with the local situation of such interests, there are many cases in which the exposition in Sudeley's Case [6] of the nature of such interests has been accepted without question. It was expressly accepted and acted upon by a House consisting of Viscount Finlay, Viscount Cave, Lord Atkinson and Lord Sumner in Barnardo's Homes v. Special Income Tax Commissioners [1] . It was treated as clear authority in Glenn v. Commissioner of Land Tax [2] per Griffith C.J. [3] , per Isaacs J. [4] . In In re Rowe [5] , Dixon A.J. (as he then was) said of a person in the position of Mrs. Coulson's next of kin [6] : "He is entitled to have the assets applied in due course of administration; but he is not entitled to a legal or equitable interest in any specific asset. His position is not dissimilar to that of a residuary legatee, of which, in Barnardo's Homes v. Special Income Tax Commissioners [1] , Viscount Cave said [7] - "When the personal estate of a testator has been fully administered by his executors and the net residue ascertained, the residuary legatee is entitled to have the residue as so ascertained, with any accrued income, transferred and paid to him; but until that time he has no property in any specific investment forming part of the estate or in the income from any such investment, and both corpus and income are the property of the executors and are applicable by them as a mixed fund for the purposes of administration. This was fully explained in Lord Sudeley v. Attorney-General [8] " ". In Watt's Case [9] Knox C.J. and Gavan Duffy J. said in a joint judgment: "The interest of the deceased under the settlement was not an interest in the specific property in which the trust funds were for the time being invested, but a right to call on the trustees of the settlement to account to him as a beneficiary under the settlement. The trustees were resident in New South Wales and not elsewhere, and the interest of the testator was a chose in action enforceable by action against the trustees. The Courts of New South Wales were the proper forum for the enforcement by the deceased or by his representatives of his claim as a beneficiary, and his interest under the settlement was, therefore, a New South Wales asset" [10] . See also Horton v. Jones [11] (where the interest in question was held to be an "interest" in land within the meaning of the Statute of Frauds ), Pagels v. MacDonald [12] , Robertson v. Commissioner of Land Tax [13] , MacKinnon v. Campbell [14] (a decision of Roper J.), Young v. Commissioner of Stamp Duties [15] , and Re Young [16] .

[44]

The two Archer-Shee Cases - Baker v. Archer-Shee [17] (to which I have already referred) and Archer-Shee v. Garland [18] - require special mention. They were income tax cases, and it is unnecessary to refer to the facts or the complex statutory provisions involved. In the earlier case the majority of their Lordships fully accepted Sudeley's Case [1] , but considered that it was not applicable because in the case before them the estate had been "fully administered" and a "definite and specific trust fund" constituted, to the income of which Lady Archer-Shee was entitled. Lord Sumner and Lord Blanesburgh dissented. In their opinion it could make no difference whether the estate was or was not, at the material time, "fully administered". In their judgments is to be found a very clear exposition of what was really decided by Sudeley's Case [1] , and I will quote Lord Sumner. His Lordship said: "Again the case of Lord Sudeley v. Attorney-General [1] is said by Sargant L.J. to be in its general reasoning precisely applicable. The points referred to there were, first, the local situation, for the purposes of English taxation, of an equitable right to have an estate administered, in which the testatrix was interested as a residuary legatee at the time of her death, and, second, the question, whether for such taxation her interest was to be deemed to be confined to a specified fraction of the residuary estate, corresponding to her share under her husband's will, or extended to the whole of that residuary estate. In applying this to the present case the learned Lord Justice says, that Lady Archer-Shee has not any specific right to any particular item of income, but, following Lord Herschell's reasoning, only an equitable right to have handed over to her the net income of the estate, subject to all proper deductions, which right of hers is a form of property situate in New York, in whose Courts it would have to be asserted. I think the reasoning of this judgment is correct. It is immaterial that in Lord Sudeley's Case [1] the estate of the husband of the testatrix had not yet been administered, whereas here, no doubt, this has been long ago accomplished." [2] . Cf. what was said by Lord Blanesburgh [3] . In an article in the Law Quarterly Review entitled A Menace to Equitable Principles ((1928) 44 L.Q.R. 468) Hanbury commended strongly the dissenting judgments as upholding "Maitland's position", which "could not be too strongly established": see in this connexion Maitland's refutation of Austin in his ninth lecture.

[47]

The Commissioner relied on the case of Skinner v. Attorney-General [1] . But that case does not appear to me to help him. The facts were simple. A died in 1923, domiciled in Northern Ireland, having by his will bequeathed to his wife an annuity charged on all his residuary estate. His wife died in 1936. At his death his estate consisted almost entirely of assets in Northern Ireland and the United States. Between the date of his death and the date of his wife's death his executors purchased a number of English securities, but the estate was not at the date of the wife's death fully administered. The Commissioner claimed estate duty from the wife's executors in respect of the English securities. The claim was made under ss. 1 and 2 (1) (b) of the Finance Act 1894. Section 1 provided that the duty should be payable on the value of "all property, real or personal, which passes on the death of" a person. If s. 1 had stood alone, one would have thought that it did not touch the case, but s. 2 (1) (b) provided that "Property passing on the death of the deceased shall be deemed to include property in which the deceased had an interest ceasing on the death of the deceased". It was held that the wife had, within the meaning of s. 2 (1) (b), an interest in the English assets of her husband's estate, and that interest ceased, of course, on her death, when the annuity ceased to be payable. That is all that Skinner's Case [1] decided. Referring to Sudeley's Case [2] , Lord Russell of Killowen said: "The whole point of the decision was that the widow did not own any part of the mortgages." (In the present case the widow did not own anything in Queensland.) "As Lord Herschell pointed out in his speech the whole fallacy of the argument of the widow's executors rested on the assumption that she or they were entitled to any part of the mortgages as an asset - she in her own right or they as executors. "I do not think", he said, "that they have any estate, right, or interest, legal or equitable, in these New Zealand mortgages, so as to make them an asset of her estate. " My Lords, I emphasize the last ten words of that sentence, which show clearly that the interest which was being repudiated was a proprietary interest" [1] .

[63]

The succession duty is imposed, primarily, by s. 12. It is to be levied and paid "in respect of every such succession as aforesaid". The word "succession" here refers not to the passing of property from one person to another on the death of the former, but to the property itself: s. 3. The duty is in respect of the property to which the Act refers. It is payable when a "successor" becomes entitled in possession to "his succession" or to the receipt of the rents and profits thereof: s. 20. There are two ways in which a person may become a "successor" and property a "succession": first, the making of a disposition by reason of which a person becomes beneficially entitled to any property or its income upon a death, and secondly, a devolution by law of a beneficial interest in property or its income, upon the death of a person, to any other person: s. 4. In the present case, no one became beneficially entitled on Mrs. Coulson's death to any property or income by virtue of her husband's will; but whatever beneficial interests in property Mrs. Coulson had at the time of her death devolved by the law of intestate succession, and they therefore became by her death a "succession" to which the person or persons upon whom they devolved must be considered the "successor". Before the commencement of the amending Act of 1895 (59 Vic. No. 28), s. 4 was to be construed as referring only to devolutions by virtue of Queensland law, that is to say the municipal law of Queensland. The devolution of immovables in Queensland was thus within the section, but the devolution of movables, even though they were in Queensland, was not within the section unless the deceased had died domiciled in Queensland, for if he had died domiciled elsewhere the Queensland rules of private international law would apply the lex domicilii as the law governing the devolution: Harding v. Commissioners of Stamps for Queensland [1] . By s. 2 of the 1895 Act, however, it is declared that succession duty is chargeable in respect of all property within Queensland, although the testator or intestate may not have had his domicile in Queensland. "Within Queensland" means, of course, (in the case of corporeal property) actually situate in Queensland, or (in the case of incorporeal property) regarded in law as situate in Queensland. By making the rule mobilia sequuntur personam irrelevant for the purposes of the Act, the amendment ensured that s. 4 should operate as if "devolution by law" had been defined to mean devolution either by the municipal law of Queensland or by the municipal law of another country as applied in Queensland by the Queensland rules of private international law.

[66]

Mrs. Coulson's rights as one of the residuary legatees under Livingston's will may be described in two ways, each of them correct. They may be described by saying that she was entitled to have the administration of the estate completed, and one-third of the residue, when ultimately ascertained, paid or transferred to her. They may also be described by saying that she was entitled at her death to have every individual asset which at that time was comprised in the estate dealt with in a due course of administration. Both descriptions recognize that she was entitled to have a process carried out; but while the one emphasizes the purpose of the process and its ultimate benefit to her, the other directs primary attention to the property presently available for the carrying out of the process. Which description is to be used on a given occasion is a question of appropriateness to the purpose in hand; but it is important always to remember that there is only the one set of rights that is being referred to. I venture to think that for the purpose of solving a concrete legal problem with respect to such a set of rights, more hindrance than help is likely to come from an attempt to classify them according to Austinian terminology as rights in personam or rights in rem. More than forty years ago those distinguished jurists Prof. A. W. Scott and Prof. Harlan F. Stone (as he then was) learnedly disputed as to whether the rights of a cestui que trust were in rem or in personam, the former being able to invoke such great names as Maitland and Holland, the latter Salmond and Pound: Columbia Law Review, Vol. XVII (1917) pp. 269, 467; but it may be doubted whether much illumination was provided for a case like the present. Dr. Hanbury strongly opposed the "realist" theory in his Essays in Equity (1934) pp. 16 et seq., 23 et seq. I must confess, however, that I incline to the view of Mr. R. W. Turner, who wrote in his book The Equity of Redemption (1931) p. 152: "It is a moot question whether the whole discussion raised by these arbitrary classifications borrowed from Roman law and distorted to fit in with new facts is not a mere academical tourney with no real bearing upon the practice of the law, and, being faulty in hypothesis and unsatisfactory in result, would be better abandoned altogether".

[67]

Since one way of describing Mrs. Coulson's interest as a residuary legatee is to say that she had a right in respect of each individual asset of the Livingston estate that that asset should be dealt with, and dealt with only, in a due course of administration so that she might receive her share in the ultimate distribution, it is in accordance with the ordinary terminology of English law, and with the terminology of the Act we have here to consider, to say that among the beneficial interests which devolved by law on Mrs. Coulson's death was a beneficial interest in the Queensland assets of Livingston's estate, and that that interest was property which belonged to her at her death. To maintain that a residuary legatee has no beneficial interest in the individual assets of the estate, or has no such interest in them as itself constitutes property, would be, I think, to deny to the word "interest" its accepted meaning in the law. The interests of the beneficiaries under a general residuary gift must absorb the whole beneficial interest in the assets not otherwise disposed of (subject of course to their diminution by the discharge of liabilities and other payments in the course of administration); for the legal personal representatives as such have no beneficial interest, those who would take on intestacy are excluded, and it is axiomatic that, with the one exception provided by the law of charities, the whole beneficial interest in property must reside in some individual or collection of individuals: Pearson v. Lane [1] ; Glenn v. Federal Commissioner of Land Tax [2] . Hence the law of resulting trusts. That a residuary beneficiary has a beneficial interest in each asset not disposed of otherwise than by the residuary gift is the proposition for which cases such as Cooper v. Cooper [1] ; Attorney-General v. Watson [2] ; Skinner v. Attorney-General [3] ; and Smith v. Layh [4] , are authority. A clear example of its application is found where land is among the assets included in a residuary disposition, and a question arises while the administration is still incomplete, and while the land remains in the estate, as to whether a residuary beneficiary has, as such, an interest in land. The answer is plainly, Yes: Horton v. Jones [5] .

[69]

But the existence of a beneficial interest is one thing, and the nature of it is another. If a question arises as to whether a particular asset "belongs" to the residuary legatee within the meaning of some statute or other instrument, the answer cannot be reached without consideration of the precise rights of which the residuary interest consists. Similarly, if the question is where should the interest be considered in law as locally situate, the rights which it comprehends must be clearly understood before an answer can be given. After all, the expression "beneficial interest" is a nomen generale, not to say generalissimum; and the label is not sufficiently informative to enable such questions as these to be answered. In Baker v. Archer-Shee [6] the difference of opinion which arose among the members of the House of Lords who sat on the case was simply upon the question whether the rights of a cestui que trust in respect of the income of a trust fund were such as to justify a description of that income as belonging specifically to her, and as for that reason falling within a particular statutory provision. That the cestui que trust had a beneficial interest in the income no one doubted; but the question could not be answered save by consideration of the rights of which the interest consisted. Again, in Barnardo's Homes v. Special Income Tax Commissioner [7] , the question whether, so long as a testator's estate is not fully administered, the income produced by its assets is income of the residuary beneficiaries was decided in the negative upon consideration of the rights which constituted the beneficiaries' interests in that income. It was because those rights were adjudged not to be sufficiently direct and exclusive that a negative answer to the question was returned. The point which the lastmentioned case emphasizes is that the rights of residuary beneficiaries while administration is incomplete stop short of entitling them to any of the assets in specie, or to any of the income in specie, or to any property or any part or share of property into which either the assets or their income may be converted. The beneficiaries are entitled only to receive, eventually, a share of whatever turns out to be left when the administration is complete; and that may not include any of the existing assets or their income, or anything representing either, for conceivably an asset may be sold and its proceeds used up in the process of administration, and the income may be similarly absorbed. Of course the beneficiaries' rights are rights with respect to, or "in", or ad each specific asset for the time being in the estate; but the important point to notice is that each such asset is liable, in the very working out of those rights themselves, to disappear from the estate. In other words, the nature of the beneficiaries' interests in the particular assets necessarily accords with the nature of their interests in the residue as a whole.

[72]

This is what I understand to be laid down in Lord Sudeley v. Attorney-General [1] . It is true that expressions used by some of their Lordships in the course of their ex tempore speeches in that case have been understood at times as meaning that residuary beneficiaries have no interest of any kind in the individual assets of an unadministered estate; and those who have so understood what was said have not unnaturally exhibited signs of shock at the apparent contradiction of the considered pronouncements of Lord Cairns and other great lawyers in Cooper v. Cooper [2] : see e.g. McCaughey v. Commissioner of Stamp Duties [3] . With others, incredulity at such seeming apostasy has led to interpretation; though not all have felt so badly about the need for that process as to join in the acid comment of Holmes L.J., that "Lord Cairns, in addition to great knowledge and experience, was such a master of language and logical exposition that he has perhaps an unfair advantage when his judgments are compared with those of lawyers of equal learning.": Tevlin v. Gilsenan [4] . Bearing in mind what has been said of Lord Sudeley v. Attorney-General [1] in cases decided since, I think that the judgments in that case should be understood as meaning that in considering the application of a statute which is concerned with "the estate and effects of the deceased" in England to the interest of a deceased residuary beneficiary, it is not to the point to refer to the locality of individual assets of the head estate. The beneficiary in his lifetime had no "proprietary" interest in those assets (to use the expression of Lord Russell of Killowen in Skinner v. Attorney-General [5] ) if by that is meant such an interest that he might have said of any of the assets "This is mine. Hand it over to me": Vanneck v. Benham [6] ; In re Cunliffe-Owen [7] ; and there is no logical or legal justification for subdividing the mass of his rights as residuary beneficiary so as to separate his rights with respect to each asset from his rights with respect to the others and attribute to each set of rights a separate local situation derived from the situation of the separate assets. You must, according to the law as laid down in Lord Sudeley v. Attorney-General [1] , attribute a local situation to the totality of rights, fixing on the place with which the totality is specially connected; and there is no need to go further in order to attribute their proper situation to the rights which exist as to the particular assets.

[76]

An analogy may be seen also in the case of a partner's interest in the partnership assets. That he has a beneficial interest, which the law will recognize and enforce, in every piece of property which belongs to the partnership is clearly established: In re Holland; Brettell v. Holland [4] ; Manley v. Sartori [5] ; In re Fuller's Contract [6] ; and none the less so because the nature of the interest is peculiar in that his share in the partnership, by virtue of which the interest in a given asset exists while the asset belongs to the partnership, consists not of a title to specific property but of a right to a proportion of the surplus after the realization of the assets and payment of the debts and liabilities of the partnership: In re Ritson, Ritson v. Ritson [7] ; Bakewell v. Deputy Federal Commissioner of Taxation [8] ; that is to say, not a "definite" share or interest in a particular asset, no "right to any part" of it, but an interest which "can be finally ascertained only when the liquidation has been completed, and consists of his share of the surplus": Rodriguez v. Speyer Brothers [9] . Yet, the local situation of the interest in the partnership as a whole being considered in law to be where the business is carried on, so also is the partner's interest in a partnership asset: In the Goods of Ewing [1] . In the leading cases of Laidlay v. Lord Advocate [2] ; Beaver v. Master in Equity [3] and Stamp Duties Commissioner v. Salting [4] , it occurred to no one to distinguish for the purposes of locality between the interest in the partnership and the interest in the assets; and indeed in Beaver v. Master in Equity [3] the emphasis given by the Privy Council to the fact that the business of the partnership in Melbourne was a distinct business from others which the partnership carried on in London and Adelaide indicates that the partner's interest in the Melbourne assets would not have been treated as situate there if there had been only a single business and that had been carried on in London. There is a case in the Supreme Court of Canada in which the contrary view was taken by a majority of the Court, but, with respect, I would prefer the dissenting judgment of Anglin J: Boyd v. Attorney-General for British Columbia [5] .

[81]

But in 1918 an amending Act (9 Geo. V No. 16) made an important change. By inserting additional words in the third paragraph of s. 47, it provided for a second case in which the Commissioner might make an assessment of succession duty on the footing of an account and estimate of his own, namely, the case where no account and estimate had been delivered. The words "subject to appeal as hereinafter provided" thus came to apply to assessments made where no account had been delivered; and an amendment made to the words in the fourth paragraph referring to appeal reinforce the conclusion that this was intended. The most obvious case in which no account and estimate would be delivered is the case where the persons who would be accountable for payment of the duty if it were payable deny liability in toto. Since 1918, therefore, there has been nothing in s. 50, except the expression "any accountable party", to limit the right of appeal to cases where an assessment had been made after an account submitted by persons accountable for the payment of duty. This was not because the meaning of any of the words of s. 50 had been changed, but because the words "appeal against such assessment" had acquired a more extended application. The referential word "such" was sufficient to give consequential effect to the enlargement of the power of assessment in s. 47; and the result was that the appeal that was spoken of came to include an appeal against an assessment which had been made notwithstanding that everyone who, according to the Commissioner, was accountable for payment of duty denied that any duty was payable. Was there, then, no necessary implication as to the expression "any accountable party"? To extend a right of appeal so that it will exist in a new class of cases seems necessarily to imply that the persons who are the proper appellants in a case of the new class may be appellants notwithstanding any limitation formerly arising from words by which competent appellants have been described. In my opinion s. 50 should be read, since the 1918 amendment, as if it began "any accountable party or party who would be accountable if the assessment were correct".

[82]

As regards administration (or probate) duty, again it must be conceded that as the Act stood originally there would have been much difficulty in maintaining that a right of appeal was conferred. But once more amending legislation seems to me to imply that s. 50 is to be read as if words extending its application had been expressly inserted. There is no difficulty about the word "accountable" as applied to administration duty. True, the word does not occur in the Act in relation to that duty, but it is not a technical word of succession duty law: it refers only to liability to make a payment, and a person liable for administration duty is quite aptly described as an accountable party. The difficulty which did exist, however, was that the expression "the assessment of the Commissioner" referred back, as I have mentioned, to s. 47, and had no application at all in respect of administration duty. But the 1918 amending Act altered this by inserting a new s. 47A in the following terms: "If, within two years after any assessment of succession or probate duty has been made or any such duty has been paid it is discovered that the account and estimate as originally delivered disclosed a less amount than the true value of such property at the time the succession took effect, or that for any reason too little duty has been paid, the Commissioner may take a further account and estimate and reassess the duty on the footing of such further account and estimate subject to appeal as hereinafter provided, and recover any further duty payable on such reassessment, together with the whole or any part of the expenses incident to the taking of such last-mentioned account and estimate.". In my opinion it is unsound to treat the references in this section to probate duty as inserted by mistake. The draftmanship is careless in the extreme, but the intention is too plain to be missed. Running the two duties together in the one provision, Parliament has indicated, in my opinion, that if the Commissioner in fact makes an assessment of probate duty (the omission to mention administration duty is of no significance, for the description obviously refers to the duty under s. 55 whatever it may be called), or such duty has been paid without assessment, and within two years thereafter it is discovered that for any reason too little duty has been paid, the Commissioner may take an account and estimate of his own and reassess the duty, but the reassessment is to be "subject to appeal as hereinafter provided". The only provision to which the words quoted can refer is s. 50. The implication is surely plain that s. 50 is to be read as applying to "probate" duty; and if that be so, any verbal alteration of s. 50 which may be necessary for its application to such duty must be treated as impliedly made.

[90]

There are to be found in various sections of the Act references to persons "accountable for the payment of duty", to persons "accountable for duty" who may be required by the Commissioner to "deliver an account", and to "every person who under the provisions of this Act delivers any account", and it seems to me that the word "accountable" is used in two senses - the first, liable to pay duty (e.g., s. 46); the second, liable to deliver an account (e.g., s. 49). Sometimes the duty to deliver an account and to pay duty are imposed upon the one person, but this is not always the case. Section 50, which gives "any accountable party dissatisfied with the assessment of the Commissioner" a right of appeal - and is the section under which these appeals were instituted - does, it seems to me, authorize an appeal by a person accountable in either of the senses in which the word is employed in the Act. The appellant here is the administrator of the estate of the intestate, to whom letters of administration were granted by the Supreme Court of New South Wales on 13th November, 1951. He did not apply for a grant of letters of administration in Queensland, but did as required by the Commissioner file an account of the estate of the intestate with the Commissioner, and subsequently he paid the succession and the administration duty assessed thereon. The appellant did these things under protest and "without prejudice to his contention that no succession or administration duty under The Succession and Probate Duties Acts was payable on the death of the said Jocelyn Hilda Coulson". He then instituted two appeals - one in relation to administration duty, the other in relation to succession duty. The Full Court of the Supreme Court of Queensland, before which the appeals came, dismissed them, deciding that they were incompetent. The Court decided that an appeal with respect to administration duty was altogether outside s. 50 and that, as regards succession duty, the section authorized an appeal only when accountability (in the sense of accountability for the payment of duty) is admitted and the details of the assessment are alone in dispute.

[91]

There is, of course, no doubt that an assessment of administration duty by the Commissioner is necessary because the duty is payable according to a scale upon the "net value of the property": and see ss. 47A and 56A (2) of the Principal Act, and s. 2 of The Succession and Probate Duties Acts Declaratory and Amendment Act of 1935. The Acts themselves do not in terms provide for any person making a return for the purpose of the assessment of administration duty, but having regard to their provisions as a whole, it is, I think, clear that a person in the position of the appellant should both make a return and pay administration and succession duty if the Acts apply. To infer an obligation upon an administrator to pay administration duty assessed with respect to the estate is not going very far, and as regards succession duty, s. 46 makes, besides the successor, "every trustee in whom any property, or the management of any property, subject to such duty, is vested" personally accountable for the duty payable in respect of any succession. The administrator here, therefore, is the person who, as required by the Commissioner, has delivered an account and has paid the duty assessed therein and may therefore properly be described as an accountable party, unless for the purposes of s. 50, notwithstanding the success of a party's appeal, his liability for some duty must remain. I do not regard it as necessary to read s. 50 as so restricted, but before elaborating this it is necessary to refer to a particular difficulty about administration duty, that is, that s. 50 stands as it did before the Act related to administration duty and, therefore, as it was enacted, s. 50 related only to appeals against assessments of succession duty. The section must, however, now be read in the context of the Act as it has been amended, and that context includes s. 47A which recognizes that s. 50 does relate to appeals against assessments of "probate duty", which clearly enough includes administration duty. I have therefore reached the conclusion that s. 50 does authorize appeals against assessments of probate and administration duty.

[95]

To go fully into all the matters argued in this case, and to discuss all the cases referred to would involve a consideration of the juristic nature of proprietary rights and equitable interests. I think I can avoid this. The noun "property" and the adjective "proprietary" are notoriously capable of much variety of explanation by writers on jurisprudence: but when used in statutes or judgments the meaning depends upon the context; and little is to be gained, I think, by theoretical analysis. As to the nature of equitable interests in our system of law, I think it enough to quote what Dr. Hanbury has said, reviewing Sir George Paton's, A Textbook of Jurisprudence 1946: "The vexed question of the nature of the right of a beneficiary is one that must exercise the mind of a jurist, though it is questionable how far the discussion is not purely academic, except in the realm of Private International Law" ( (1947) 63 L.Q.R. 115). This case is within the realm of private international law: and the nature of the interest of a beneficiary in trust property is fundamental to it - the particular question here being the nature of the interest of those entitled as next of kin to the estate of a deceased person while that estate is in course of administration. It is, I think, the inevitable result of our system of equity and of the impact of equitable remedies upon legal rights that the rights of a beneficiary under a trust can be regarded as a right to be asserted against the trustee who has the legal title to the trust property or as an interest in that property. This double aspect of the existence of equitable remedies is peculiar to our system. "The continental jurist" is puzzled by any reference to a right that partakes of the nature of rights in rem and rights in personam. He asks: "Who has the ownership? If it is given to the trustee, the beneficiary has a mere right in personam; if to the beneficiary then the trustee is a mere agent". That is how Professor Paton puts it in the work above referred to, 2nd edition (1951) p. 432. We were, of course, pressed with the decision in Lord Sudeley v. Attorney-General [1] . Remarks in the speeches of their Lordships in that case concerning the nature of the interest of a beneficiary in the assets of an estate in the course of administration have been much criticized, trenchantly so by Jordan C.J. in McCaughey v. Commissioner of Stamp Duties [2] . But those remarks must now be read in the explanatory light of what was said later in Skinner v. Attorney-General [3] , and in In re Cunliffe-Owen; Mountain v. Inland Revenue Commissioners [4] . No one would now say that Mrs. Tollemache had no interest in the New Zealand assets in question in Sudeley's Case [1] . True she could not have said, "they are mine: give them to me", for her husband's estate had not been fully administered. The New Zealand assets were still in his estate; and her share in that estate was an English asset in respect of which probate duty under English law was payable. But, as we now know, that does not mean that she had no interest in the items of property that were comprised in that English asset. A situation comparable with that in question here would have arisen if Sudeley's Case [1] had been concerned not with a liability of the English estate to English probate duty but with a liability under the law of New Zealand to duty upon property locally situate there. It is not without significance that in the original judgment in Sudeley's Case in the Queen's Bench [2] , Lord Russell of Killowen C.J. and Charles J. referred to the fact that the English executors could only possess themselves of the assets in New Zealand by the aid of the Court there, and that administration duty had been paid on the estimated value of the share of Frances L. Tollemache in New Zealand.

[98]

I have written this merely to emphasize my view that the matter must be judged from the point of view of Queensland law; the opposite situation from that under consideration in Sudeley's Case [1] . Having done so, I need say no more than that I concur in the conclusions of the Chief Justice and in the general principles he has stated on which his conclusions are based. There are, of course, some distinctions between succession duty and administration duty: in a sense they reflect the basic distinction that Dicey emphasizes between administration and succession. Westlake's description of the nature of succession duty, in the course of his explanation of the differences between it and probate duty, in his earlier editions e.g. 3rd ed. pp. 125, 126 gave rather too limited an effect to succession duty. In the sixth edition the same passage (s. 116) is restricted to succession duty when it is incident on settled property. Here we are concerned with duty on a succession under s. 4 of The Succession & Probate Duties Act, which is in the same terms as s. 2 of the English Act of 1852. And a "succession" as so described, it is always important to remember, is not an event: it is property, a proprietary interest (see per Rowlatt J. in Attorney-General v. Anderton [2] ). And, as a result of the amendment to the law made in 1895, succession duty is chargeable on all property within Queensland. Administration duty, on the other hand, is in the nature of a probate duty, as ordinarily understood but with its scope extended by the amending Act of 1935. It is levied in respect of property belonging to a deceased in Queensland. So that substantially the same question arises in respect of both duties. In my opinion, there was, in this case, a liability for both succession and administration duty to the extent that the Chief Justice has stated. That involves excluding the wool realization moneys. I have not considered whether the valuations of the property in respect of which the duties were levied were made on a proper basis. That was not really contested: and, in any event, as most members of the Court think the duties are not payable, I need not consider it. I would dismiss the appeals.

At a glance

Court

Decision date

Before

Source

Judgment (99 paragraphs)

Parties